0001023024-23-000005 | 10-K | XBRL Viewer

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Mar. 02, 2023	Jun. 30, 2022
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	001-31812
Entity Registrant Name	ANI PHARMACEUTICALS, INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	58-2301143
Entity Address, Address Line One	210 Main Street West
Entity Address, City or Town	Baudette
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	56623
City Area Code	218
Local Phone Number	634-3500
Title of 12(b) Security	Common Stock
Trading Symbol	ANIP
Security Exchange Name	NASDAQ
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 372.9
Auditor Name	EisnerAmper LLP
Auditor Firm ID	274
Auditor Location	Philadelphia, Pennsylvania
Entity Central Index Key	0001023024
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,493,224
Class C Special Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		10,864

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current Assets
Cash and cash equivalents	$ 48,228	$ 100,300
Current restricted cash	5,006
Accounts receivable, net of $161,052 and $105,260 of adjustments for chargebacks and other allowances at December 31, 2022 and 2021, respectively	165,438	128,526
Inventories, net	105,355	81,693
Prepaid income taxes	3,827	3,667
Assets held for sale	8,020
Prepaid expenses and other current assets	8,387	7,589
Total Current Assets	344,261	321,775
Property and equipment	75,958	75,627
Accumulated depreciation	(32,712)	(22,956)
Property and equipment, net	43,246	52,671
Non-Current restricted cash		5,001
Deferred tax assets, net of deferred tax liabilities and valuation allowance	81,363	67,936
Intangible assets, net	251,635	294,122
Goodwill	28,221	27,888
Derivatives and other non-current assets	11,361	2,205
Total Assets	760,087	771,598
Current Liabilities
Current debt, net of deferred financing costs	850	850
Accounts payable	29,305	22,967
Accrued royalties	9,307	6,225
Accrued compensation and related expenses	10,312	8,522
Accrued government rebates	10,872	5,492
Returned goods reserve	33,399	35,831
Accrued expenses and other	5,394	7,650
Total Current Liabilities	99,439	87,537
Non-current Liabilities
Non-current debt, net of deferred financing costs and current component	285,669	286,520
Non-current contingent consideration	35,058	31,000
Derivatives and other non-current liabilities	1,381	7,801
Total Liabilities	421,547	412,858
Commitments and Contingencies (Note 13)
Mezzanine Equity
Convertible Preferred Stock, Series A, $0.0001 par value, 1,666,667 shares authorized; 25,000 shares issued and outstanding at December 31, 2022 and December 31, 2021	24,850	24,850
Stockholders' Equity
Common Stock, $0.0001 par value, 33,333,334 shares authorized; 17,643,497 shares issued and 17,494,466 outstanding at December 31, 2022; 16,912,401 shares issued and 16,829,739 shares outstanding at December 31, 2021	1	1
Class C Special Stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively
Preferred Stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively
Treasury stock, 149,031 shares of common stock, at cost, at December 31, 2022 and 82,662 shares of common stock, at cost, at December 31, 2021	(5,094)	(3,135)
Additional paid-in capital	403,901	387,844
Accumulated deficit	(97,286)	(47,765)
Accumulated other comprehensive income/(loss), net of tax	12,168	(3,055)
Total Stockholders' Equity	313,690	333,890
Total Liabilities, Mezzanine Equity, and Stockholders' Equity	$ 760,087	$ 771,598

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Adjustments for chargebacks and other allowances	$ 161,052	$ 105,260
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	1,666,667	1,666,667
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Treasury Stock, Common, Shares	149,031	82,662
Convertible Preferred Stock
Convertible Preferred Stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible Preferred Stock, Shares Authorized	1,666,667	1,666,667
Convertible Preferred Stock, Shares Issued	25,000	25,000
Convertible Preferred Stock, Shares Outstanding	25,000	25,000
Common Stock
Common Stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Authorized Shares	33,333,334	33,333,334
Common Stock, Issued Shares	17,643,497	16,912,401
Common Stock, Outstanding Shares	17,494,466	16,829,739
Class C Special Stock
Common Stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Authorized Shares	781,281	781,281
Common Stock, Issued Shares	10,864	10,864
Common Stock, Outstanding Shares	10,864	10,864

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Operations
Net Revenues	$ 316,385	$ 216,136	$ 208,475
Operating Expenses
Cost of sales (excluding depreciation and amortization)	138,785	100,610	87,157
Research and development	22,318	11,369	16,001
Selling, general, and administrative	124,044	84,294	64,986
Depreciation and amortization	56,972	47,252	44,638
Contingent consideration fair value adjustment	3,758	500
Legal settlement expense		8,750
Purified Cortrophin Gel pre-launch charges		780	11,263
Restructuring activities	5,679
Intangible asset impairment charge	112	2,374	446
Total Operating Expenses	351,668	255,929	224,491
Operating Loss	(35,283)	(39,793)	(16,016)
Other Expense, net
Interest expense, net	(28,052)	(11,922)	(9,452)
Other income/(expense), net	670	(4,343)	(494)
Loss Before Benefit for Income Taxes	(62,665)	(56,058)	(25,962)
Benefit for income taxes	14,769	13,455	3,414
Net Loss	(47,896)	(42,603)	(22,548)
Dividends on Series A Convertible Preferred Stock	(1,625)	(190)
Net Loss Available to Common Shareholders	$ (49,521)	$ (42,793)	$ (22,548)
Basic and Diluted Loss Per Share:
Basic Loss Per Share	$ (3.05)	$ (3.40)	$ (1.88)
Diluted Loss Per Share	$ (3.05)	$ (3.40)	$ (1.88)
Basic Weighted-Average Shares Outstanding	16,260	12,596	11,964
Diluted Weighted-Average Shares Outstanding	16,260	12,596	11,964

Consolidated Statements of Comprehensive (Loss)/Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Comprehensive (Loss)/Income
Net loss	$ (47,896)	$ (42,603)	$ (22,548)
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustment	(112)	12
Gains/(losses) on interest rate swap, net of tax	15,335	8,370	(6,566)
Total other comprehensive income/(loss), net of tax	15,223	8,382	(6,566)
Total comprehensive loss, net of tax	$ (32,673)	$ (34,221)	$ (29,114)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Class C Special Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive (Loss)/Gain, Net of Tax	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Deficit	Cumulative Effect, Period of Adoption, Adjustment	Total
Balance at Dec. 31, 2019	$ 1		$ 200,800	$ (723)	$ (4,871)	$ (8)	$ 17,584	$ (8)
Beginning Balance, Common (in shares) at Dec. 31, 2019	12,105,000
Beginning Balance, Treasury (in shares) at Dec. 31, 2019				15,000
Beginning balance, permanent and temporary equity at Dec. 31, 2019									$ 212,791
Increase (decrease) in Stockholders' Equity
Stock-based Compensation Expense			12,936						12,936
Treasury Stock Purchases for Restricted Stock Vests				$ (1,523)					(1,523)
Treasury Stock Purchases for Restricted Stock Vests (in shares)				61,000
Issuance of Common Shares upon Stock Option and ESPP Exercise			618						618
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)	21,000
Issuance of Restricted Stock Awards (in shares)	304,000
Other Comprehensive Income (Loss)					(6,566)				(6,566)
Net Loss							(22,548)		(22,548)
Balance at Dec. 31, 2020	$ 1		214,354	$ (2,246)	(11,437)		(4,972)
Ending Balance, Common (in shares) at Dec. 31, 2020	12,430,000
Ending Balance, Treasury (in shares) at Dec. 31, 2020				76,000
Ending balance, permanent and temporary equity at Dec. 31, 2020									195,700
Increase (decrease) in Stockholders' Equity
Stock-based Compensation Expense			10,489						10,489
Treasury Stock Purchases for Restricted Stock Vests				$ (889)					(889)
Treasury Stock Purchases for Restricted Stock Vests (in shares)				28,000
Issuance of Common Shares upon Stock Option and ESPP Exercise			2,069						2,069
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)	56,000
Issuance of Restricted Stock Awards (in shares)	541,000
Restricted Stock Awards Forfeitures			(1)						(1)
Restricted Stock Awards Forfeitures (in shares)	(81,000)			(21,000)
Issuance of Common Stock for Novitium Acquisition			91,199						91,199
Issuance of Common Stock for Novitium Acquisition (in shares)	2,467,000
Issuance of Common Stock in Public Offering			69,734						69,734
Issuance of Common Stock in Public Offering (in shares)	1,500,000
Dividends on Convertible Preferred Stock							(190)		(190)
Issuance of Series A Convertible Preferred Stock from Mezzanine Equity									24,850
Other Comprehensive Income (Loss)					8,382				8,382
Net Loss							(42,603)		(42,603)
Balance at Dec. 31, 2021	$ 1		387,844	$ (3,135)	(3,055)		(47,765)		$ 333,890
Ending Balance, Common (in shares) at Dec. 31, 2021	16,913,000	11,000
Ending Balance, Treasury (in shares) at Dec. 31, 2021				83,000					82,662
Ending balance, permanent and temporary equity at Dec. 31, 2021									$ 358,740
Increase (decrease) in Stockholders' Equity
Stock-based Compensation Expense			14,599						14,599
Treasury Stock Purchases for Restricted Stock Vests				$ (1,959)					(1,959)
Treasury Stock Purchases for Restricted Stock Vests (in shares)				66,000
Issuance of Common Shares upon Stock Option and ESPP Exercise			1,458						1,458
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)	52,000
Issuance of Restricted Stock Awards (in shares)	748,000
Restricted Stock Awards Forfeitures (in shares)	(69,000)
Dividends on Convertible Preferred Stock							(1,625)		(1,625)
Other Comprehensive Income (Loss)					15,223				15,223
Net Loss							(47,896)		(47,896)
Balance at Dec. 31, 2022	$ 1		$ 403,901	$ (5,094)	$ 12,168		$ (97,286)		$ 313,690
Ending Balance, Common (in shares) at Dec. 31, 2022	17,644,000	11,000
Ending Balance, Treasury (in shares) at Dec. 31, 2022				149,000					149,031
Ending balance, permanent and temporary equity at Dec. 31, 2022									$ 338,540

Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity - Mezzanine - USD ($) $ in Thousands	Convertible Preferred Stock	Total
Balance at Dec. 31, 2019	$ 0
Balance (in shares) at Dec. 31, 2019	0
Balance at Dec. 31, 2020	$ 0
Balance (in shares) at Dec. 31, 2020	0
Increase (decrease) in temporary equity
Issuance of Series A Convertible Preferred Stock from Mezzanine Equity	$ 24,850	$ 24,850
Issuance of Series A Convertible Preferred Stock from Mezzanine Equity (in shares)	25,000
Balance at Dec. 31, 2021	$ 24,850	24,850
Balance (in shares) at Dec. 31, 2021	25,000
Balance at Dec. 31, 2022	$ 24,850	$ 24,850
Balance (in shares) at Dec. 31, 2022	25,000

- Definition

Carrying amount, attributable to parent, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

+ References + Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash Flows From Operating Activities
Net loss	$ (47,896)	$ (42,603)	$ (22,548)
Adjustments to reconcile net loss to net cash and cash equivalents (used in)/provided by operating activities:
Stock-based compensation	14,599	10,489	12,936
Deferred taxes	(15,253)	(16,754)	(13,205)
Depreciation and amortization	59,653	47,252	44,638
Acquired in-process research and development ("IPR&D")	1,151		3,753
Non-cash interest	3,961	2,512	1,876
Contingent consideration fair value adjustment	4,058	500
Loss on extinguishment of debt		1,458
Asset impairment charges	574	2,374	445
Gain on sale of ANDAs	(750)	(1,822)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net	(36,912)	(5,548)	(23,664)
Inventories, net	(23,626)	3,224	(2,759)
Prepaid expenses and other current assets	(798)	127	(1,866)
Accounts payable	5,038	10,166	(2,294)
Accrued royalties	3,082	(267)	1,323
Current income taxes payable, net	(160)	(7,573)	4,982
Accrued government rebates	5,380	(3,078)	(1,075)
Returned goods reserve	(2,399)	6,503	10,369
Accrued expenses, accrued compensation, and other	(905)	(3,638)	2,356
Net Cash and Cash Equivalents (Used in)/Provided by Operating Activities	(31,203)	3,322	15,267
Cash Flows From Investing Activities
Acquisition of Novitium Pharma LLC, net of cash acquired	(33)	(84,494)
Acquisition of product rights, IPR&D, and other related assets	(7,579)	(21,081)	(62,187)
Acquisition of property and equipment, net	(8,876)	(2,557)	(6,135)
Proceeds from the sale of long-lived assets	750	2,649
Net Cash and Cash Equivalents Used in Investing Activities	(15,738)	(105,483)	(68,322)
Cash Flows From Financing Activities
Payments on Term Loan and Delayed Draw Term Loan agreements		(10,862)
Payments on borrowings under credit agreements	(3,000)		(8,034)
Payments on Revolver agreement			(7,500)
Borrowings under Prior Revolver agreement		24,000	15,000
Repayment of Prior Credit Facility		(200,148)
Borrowings under the Credit Facility		300,000
Proceeds from issuance of convertible preferred stock		25,000
Series A convertible preferred stock dividends paid	(1,625)	(190)
Proceeds from issuance of common stock in public offering		75,000
Cash paid for costs of share issuances		(5,416)
Proceeds from stock option exercises and ESPP purchases	1,458	2,069	618
Payments of debt issuance costs		(13,968)
Treasury stock purchases for restricted stock vests	(1,959)	(890)	(1,523)
Net Cash and Cash Equivalents (Used in)/Provided by Financing Activities	(5,126)	194,595	(1,439)
Net Change in Cash and Cash Equivalents	(52,067)	92,434	(54,494)
Cash, cash equivalents, and restricted cash, beginning of period	105,301	12,867	67,361
Cash, cash equivalents, and restricted cash, end of period	53,234	105,301	12,867
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	48,228	100,300	7,864
Restricted cash	5,006	5,001	5,003
Total cash, cash equivalents, and restricted cash	53,234	105,301	12,867
Supplemental disclosure for cash flow information:
Cash paid for interest, net of amounts capitalized	21,477	9,705	6,931
Cash paid for income taxes	288	10,371	4,984
Supplemental non-cash investing and financing activities:
Fair value of contingent consideration in a business combination		30,500
Fair value of equity issued as consideration in a business combination		91,199
Acquisition of product rights included in accounts payable	1,000		391
Property and equipment purchased and included in accounts payable	$ 452	$ 152	$ 172

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is a diversified bio-pharmaceutical company serving patients in need by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals, including for diseases with high unmet medical need. Our team is focused on delivering growth by building a successful Purified Cortrophin Gel franchise, strengthening our generics business with enhanced development capability, innovation in established brands and leveraging our manufacturing capabilities. Our four pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota, one is located in East Windsor, New Jersey, and one is located in Oakville, Ontario, are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. On June 2, 2022, we announced that we intend to cease operations at our Oakville, Ontario, Canada manufacturing plant by first quarter 2023. This action is part of ongoing initiatives to capture operational synergies following our acquisition of Novitium Pharma LLC (“Novitium”) in November 2021. We have transitioned the majority of products manufactured or packaged in Oakville to one of our three U.S.-based manufacturing sites and are on track to cease operations by the end of the first quarter 2023. We are seeking to find potential buyers for the Oakville site.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency

We have subsidiaries located in Canada and India. The Canada-based subsidiary conducts its transactions in U.S. dollars and Canadian dollars, but its functional currency is the U.S. dollar. The Indian-based subsidiary generally conducts its transactions in Indian rupees, which is also its functional currency. The results of any non-U.S. dollar transactions and balances are remeasured in U.S. dollars at the applicable exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net income. Our gain or loss on transactions denominated in foreign currencies and the translation impact of local currencies to U.S. dollars was immaterial for the years ended December 31, 2022, 2021, and 2020. Unless otherwise noted, all references to “$” or “dollar” refer to the U.S. dollar.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the consolidated financial statements, estimates are used for, but not limited to, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, income tax provision or benefit, deferred taxes and valuation allowance, stock-based compensation, revenue recognition, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, including contingent consideration in acquisitions, fair value of long-lived assets, determination of right-of-use assets and lease liabilities, allowance for credit losses, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness.

We are subject to risks and uncertainties as a result of the novel coronavirus (“COVID-19”) pandemic. We are unable to predict the impact that the COVID-19 pandemic will continue to have on our future business, financial condition, and results of operations due to numerous uncertainties. These uncertainties include the occurrence of recurring outbreaks and their severity and the duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. We remain unable to predict the future impact on our estimates and assumptions. There was no material impact to these estimates or assumptions in our consolidated financial statements as of and for the years ended December 31, 2022 and 2021. Actual results could differ from those estimates, which may change our estimates in future periods. We continue to closely monitor the impact of the COVID-19 pandemic on our business.

Leases

At the inception of a contract we determine if the arrangement is, or contains, a lease. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Rent expense is recognized on a straight-line basis over the lease term.

We have made certain accounting policy elections whereby we (i) do not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combine lease and non-lease elements of our operating leases. Operating lease ROU assets are included in other non-current assets and operating lease liabilities are included in accrued expenses and other and derivatives and other non-current liabilities in our consolidated balance sheets. As of December 31, 2022, we did not have any finance leases.

Comprehensive Income/(Loss)

Comprehensive (loss)/income, which is reported in the statement of comprehensive (loss)/income, consists of net (loss)/income, changes in fair value of our interest rate swap, and other comprehensive (loss)/income, net of tax, which consists of foreign currency translation.

Credit Concentration

Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and other pharmaceutical companies.

During the years ended December 31, 2022 and 2021 we had three customers that accounted for 10% or more of net revenues. As of December 31, 2022, accounts receivable from these customers totaled 82% of accounts receivable, net.

The three customers represent the total percentage of net revenues as follows:



	Years Ended December 31,
	2022		2021		2020
Customer 1	26	%	29	%	31	%
Customer 2	18	%	23	%	24	%
Customer 3	15	%	16	%	19	%

Vendor Concentration

We source the raw materials for products, including active pharmaceutical ingredients (“API”), from both domestic and international suppliers. Generally, only a single source of API is qualified for use in each product due to the costs and time required to validate a second source of supply. As a result, we are dependent upon our current vendors to supply reliably the API required for on-going product manufacturing. During the year ended December 31, 2022, we purchased approximately 19% of our inventory from one supplier. As of December 31, 2022, our amount payable to this supplier was $10.9 million. During the year ended December 31, 2021, no single vendor

represented at least 10% of inventory purchases. During the year ended December 31, 2020, we purchased approximately 10% of our inventory from one supplier.

Revenue Recognition

We recognize revenue using the following steps:

●

Identification of the contract, or contracts, with a customer;

●

Identification of the performance obligations in the contract;

●

Determination of the transaction price, including the identification and estimation of variable consideration;

●

Allocation of the transaction price to the performance obligations in the contract; and

●

Recognition of revenue when we satisfy a performance obligation.

We derive our revenues primarily from sales of generic and branded pharmaceutical products. Revenue is recognized when our obligations under the terms of our contracts with customers are satisfied, which generally occurs when control of the products we sell is transferred to the customer. We estimate variable consideration after considering applicable information that is reasonably available. We generally do not have incremental costs to obtain contracts that would otherwise not have been incurred. We do not adjust revenue for the promised amount of consideration for the effects of a significant financing component because our customers generally pay us within 100 days.

All revenue recognized in our consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue:



Products and Services	Years Ended December 31,
(in thousands)	2022		2021		2020
Sales of generic pharmaceutical products	$	210,121	$	143,571	$	147,257
Sales of established brand pharmaceutical products		39,463		47,561		47,960
Sales of rare disease pharmaceutical products		41,686		—		—
Sales of contract manufactured products		16,106		10,042		9,221
Royalties from licensing agreements		5,367		11,795		1,396
Product development services		2,949		1,310		1,858
Other		693		1,857		783
Total net revenues	$	316,385	$	216,136	$	208,475



Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2022		2021		2020
Performance obligations transferred at a point in time	$	313,436	$	214,826	$	206,617
Performance obligations transferred over time		2,949		1,310		1,858
Total	$	316,385	$	216,136	$	208,475

During the year ended December 31, 2022, we did not incur, and therefore did not defer, any material incremental costs to fulfill contracts. We recognized a decrease of $2.2 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2022, consisting primarily of revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales. As of December 31, 2022, we did not have any contract assets related to revenue recognized based on percentage of completion but not yet billed. We did not have deferred revenue at December 31, 2022. We had less than $0.1 million

of deferred revenue at December 31, 2021. For the years ended December 31, 2022 and 2021, we recognized less than $0.1 million of revenue that was included in deferred revenue as of December 31, 2021 and 2020.

Revenue from Sales of Generic and Branded Pharmaceutical Products

Product sales consists of sales of our generic and branded pharmaceutical products, including rare disease pharmaceutical products. Our sole performance obligation in our contracts is to provide pharmaceutical products to customers. Our products are sold at pre-determined standalone selling prices and our performance obligation is considered to be satisfied when control of the product is transferred to the customer. Control is generally transferred to the customer upon delivery of the product to the customer, as our pharmaceutical products are generally sold on an FOB destination basis and because inventory risk and risk of ownership passes to the customer upon delivery. Payment terms for these sales are generally less than 100 days.

Revenue from Distribution Agreements

From time to time, we enter into marketing and distribution agreements with third parties in which we sell products under Abbreviated New Drug Applications (“ANDAs”) or New Drug Applications (“NDAs”) owned or licensed by these third parties. These products are sold under our own label. We have assessed and determined that we control the products sold under these marketing and distribution agreements and therefore are the principal for sales under each of these marketing and distribution agreements. As a result, we recognize revenue on a gross basis when control has passed to the customer and we have satisfied our performance obligation. Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products. These profit-sharing percentages are recognized in cost of sales in our consolidated statements of operations and are accrued in accrued royalties in our consolidated balance sheets until payment has occurred.

Sales of our pharmaceutical products are subject to variable consideration due to chargebacks, government rebates, returns, administrative and other rebates, and cash discounts. Estimates for these elements of variable consideration require significant judgment.

Chargebacks

Chargebacks, primarily from wholesalers, result from arrangements we have with indirect customers establishing prices for products which the indirect customer purchases through a wholesaler. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide a chargeback credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler’s invoice price, typically Wholesale Acquisition Cost (“WAC”).

Chargeback credits are calculated as follows:

Prior period chargebacks claimed by wholesalers are analyzed to determine the actual average selling price (“ASP”) for each product. This calculation is performed by product by wholesaler. ASPs can be affected by several factors such as:

●

A change in customer mix

●

A change in negotiated terms with customers

●

A change in the volume of off-contract purchases

●

Changes in WAC

As necessary, we adjust ASPs based on anticipated changes in the factors above.

The difference between ASP and WAC is recorded as a reduction in both gross revenues in our consolidated statements of operations and accounts receivable in the consolidated balance sheets, at the time we recognize revenue from the product sale.

To evaluate the adequacy of our chargeback accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the chargeback amount, the difference between ASP and WAC, to arrive at total

expected future chargebacks, which is then compared to the chargeback accruals. We continually monitor chargeback activity and adjust ASPs when we believe that actual selling prices will differ from current ASPs.

Government Rebates

Our government rebates reserve consists of estimated payments due to governmental agencies for purchases made by third parties under various governmental programs. The two largest government programs that impact our net revenue and our government rebates reserve are federal and state Medicaid rebate programs and Medicare.

We participate in certain qualifying federal and state Medicaid rebate programs whereby discounts and rebates are provided to participating programs after the final dispensing of the product by a pharmacy to a Medicaid plan participant. Medicaid rebates are typically billed up to 120 days after the product is shipped. Medicaid rebate amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis. Our Medicaid reserves are based on expected claims from state Medicaid programs. Estimates for expected claims are driven by patient usage, sales mix, calculated AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate. As a result of the delay between selling the products and rebate billing, our Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to plan participants.

Many of our products are also covered under Medicare. We, like all pharmaceutical companies, must provide a discount for any products sold under NDAs to Medicare Part D participants. This applies to all products sold under NDAs, regardless of whether the products are marketed as branded or generic. Our estimates for these discounts are based on historical experience with Medicare rebates for our products. While such experience has allowed for reasonable estimations in the past, history may not always be an accurate indicator of future rebates. Medicare rebates are typically billed up to 120 days after the product is shipped. As a result of the delay between selling the products and rebate billing, our Medicare rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D participants.

To evaluate the adequacy of our government rebate reserves, we review the reserves on a quarterly basis against actual claims data to ensure the liability is fairly stated. We continually monitor our government rebate reserve and adjust our estimates if we believe that actual government rebates may differ from our established accruals. Accruals for government rebates are recorded as a reduction to gross revenues in our consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets.

Returns

We maintain a return policy that allows customers to return product within a specified period prior to and subsequent to the expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration date. Our product returns are settled through the issuance of a credit to the customer. Our estimate for returns is based upon historical experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of future returns. We continually monitor our estimates for returns and make adjustments when we believe that actual product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in our consolidated statements of operations and as an increase to the return goods reserve in the consolidated balance sheets.

Administrative Fees and Other Rebates

Administrative fees or rebates are offered to wholesalers, group purchasing organizations, and indirect customers. We accrue for fees and rebates, by product by wholesaler, at the time of sale based on contracted rates and ASPs.

To evaluate the adequacy of our administrative fee accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the ASPs to arrive at total expected future sales, which is then multiplied by contracted rates. The result is then compared to the administrative fee accruals. We continually monitor administrative fee activity and adjust our accruals when we believe that actual administrative fees will differ from the accruals. Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in our consolidated statements of operations and accounts receivable in the consolidated balance sheets.

Prompt Payment Discounts

We often grant sales discounts for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding. We assume, based on past experience, that all available discounts will be taken. Accruals for prompt payment discounts are recorded as a reduction in both gross revenues in our consolidated statements of operations and accounts receivable in the consolidated balance sheets.

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2022, 2021, and 2020:


	Accruals for Chargebacks, Returns, and Other Allowances
							Administrative		Prompt
			Government				Fees and Other		Payment
(in thousands)	Chargebacks		Rebates		Returns		Rebates		Discounts
Balance at December 31, 2020 (1)	$	88,746	$	7,826	$	27,155	$	8,906	$	3,839
Accruals/Adjustments		492,374		15,308		24,081		35,225		15,633
Credits Taken Against Reserve		(487,054)		(17,642)		(15,405)		(31,031)		(14,830)
Balance at December 31, 2021 (1)	$	94,066	$	5,492	$	35,831	$	13,100	$	4,642
Accruals/Adjustments		642,409		20,657		23,252		42,044		21,302
Credits Taken Against Reserve		(587,913)		(15,277)		(25,684)		(45,702)		(19,456)
Balance at December 31, 2022 (1)	$	148,562	$	10,872	$	33,399	$	9,442	$	6,488

(1)Chargebacks are included as an offset to accounts receivable, net of chargebacks and other allowances in the consolidated balance sheets. Administrative Fees and Other Rebates and Prompt Payment Discounts are included as a reduction to accounts receivable, net of chargebacks and other allowances or accrued expenses and other in the consolidated balance sheets. Returns are included in returned goods reserve in the consolidated balance sheets. Government Rebates are included in accrued government rebates in the consolidated balance sheets.

Contract Manufacturing Product Sales Revenue

Contract manufacturing arrangements consist of agreements in which we manufacture a pharmaceutical product on behalf of a third party. Our performance obligation is to manufacture and provide pharmaceutical products to customers, typically pharmaceutical companies. The contract manufactured products are sold at pre-determined standalone selling prices and our performance obligations are considered to be satisfied when control of the product is transferred to the customer. Control is transferred to the customer when the product leaves our dock to be shipped to the customer, as our contract manufactured pharmaceutical products are sold on an FOB shipping point basis and the inventory risk and risk of ownership passes to the customer at that time. Payment terms for these sales are generally fewer than two months. We estimate returns based on historical experience. Historically, we have not had material returns for contract manufactured products.

As of December 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations for all open contract manufacturing customer contracts was $4.3 million, which consists of firm orders for contract manufactured products. We will recognize revenue for these performance obligations as they are satisfied, which is anticipated within six months.

Royalties from Licensing Agreements

From time to time, we enter into transition agreements with the sellers of products we acquire, under which we license to the seller the right to sell the acquired products. Therefore, we recognize the revenue associated with sales of the underlying products as royalties. Because these royalties are sales-based, we recognize the revenue when the underlying sales occur, based on sales and gross profit information received from the sellers. Upon full transition of the products and upon launching the products under our own labels, we recognize revenue for the products as sales of generic or branded pharmaceutical products, as described above. From time to time, we enter into supply and distribution agreements with contract manufacturing customers, under which we license to the contract manufacturing customer the right to sell our products, and we are entitled to a royalty on sales made by the contract manufacturing customer under these arrangements. Therefore, we recognize the revenue associated with sales of the underlying products as royalties. Because these royalties are sales-based, we recognize the revenue when the underlying sales occur, based on sales and gross profit information received from the contract manufacturing customers.

Pursuant to a 2012 Tripartite Agreement (the “Tripartite Agreement”) between the Company, The Regents of the University of California (“The Regents”), and Cabaret Biotech Ltd., an Israeli corporation (“Cabaret”) (as assignee of Dr. Zelig Eshhar’s rights under the Tripartite Agreement), and subsequent amendments thereto and assignments thereof, we were entitled to receive a percentage of the milestone and sales royalty payments paid to Cabaret by Kite Pharma, Inc. (“Kite”), a subsidiary of Gilead Sciences, Inc., under a license agreement. Under such license agreement, Kite licensed from Dr. Eshhar and Cabaret the patent rights covered by the Tripartite Agreement and agreed to make certain payments to Cabaret based on, among other things, Kite’s sales of Yescarta®. Under the Tripartite Agreement, portions of these payments were to be distributed to The Regents and to us.

Historically, we recorded royalty income related to Yescarta® on an accrual basis utilizing our best estimate of royalties earned based upon information available in the public domain, our understanding of the various agreements governing the royalty, and other information received from time to time from the relevant parties. Generally, cash was received directly from Cabaret once a year. The agreements governing this royalty were subject to multiple actions in multiple jurisdictions, including litigation between Cabaret and Kite, and separately, ANI and Cabaret. In the first quarter of 2021, we became aware that the litigation between Cabaret and Kite was dismissed. In April 2021, Cabaret and the Company settled all amounts due for amounts actually received by Cabaret or Eshhar for the licensing or use of the patent rights governed by the Kite license agreement. As a result, we recognized $11.2 million as royalties from licensing agreements in our net revenues during the three month period ended March 31, 2021. In addition, during the three month period ended March 31, 2021, we agreed to reimburse Cabaret $0.4 million, which has been recorded as other expense, net related to certain legal expenditures incurred. We received final payment from Cabaret in May 2021. Based upon the events that led to the dismissal of the litigation between Cabaret and Kite, we do not expect to receive any future royalty income related to the Kite license agreement. In conjunction with payment of amounts due to us, all outstanding litigation between the Company and Cabaret was dismissed.

Product Development Services Revenue

We provide product development services to customers, which are performed over time. These are services primarily performed at our facility in East Windsor, New Jersey. As of December 31, 2022, we have ceased all manufacturing and packaging and clinical operations at our Oakville, Ontario facility. We have transitioned the product development services at the facility to one of our three U.S.-based manufacturing sites.

The duration of these development projects can be up to three years. Deposits received from these customers are recorded as deferred revenue until revenue is recognized. For contracts with no deposits and for the remainder of contracts with deposits, we invoice customers as our performance obligations are satisfied. We recognize revenue on a percentage of completion basis, which results in contract assets on our balance sheet and that revenue is recognized over time. As of December 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations for all open product development services contracts was immaterial.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. All interest bearing and non-interest bearing accounts 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. We consider this to be a normal business risk.

In April 2016, we purchased the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC for $60.0 million in cash and milestone payments based on future gross profits from sales of products under the NDA. Additionally, we transferred $5.0 million to an escrow account as security for future milestone payments. This escrow account balance is included in restricted cash in our consolidated balance sheet as of December 31, 2022.

Accounts Receivable

We extend credit to customers on an unsecured basis. We measure expected credit losses on our financial assets at amortized cost, including trade and unbilled receivables, on a collective basis, based on their similar risk characteristics. Expected credits losses are based on historical credit loss experience, review of the current aging or status of accounts receivable and current and forward-looking views from an economic and industry perspective. We determine trade receivables to be delinquent when greater than 30 days past due. Receivables are written off when it is determined that amounts are uncollectible. Our allowance for credit losses was immaterial as of December 31, 2022 and 2021.

Inventories

Inventories consist of raw materials, packaging materials, work-in-progress, and finished goods. Inventories are stated at the lower of standard cost or net realizable value. We periodically review and adjust standard costs, which generally approximate weighted average cost.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is recorded on a straight-line basis over estimated useful lives as follows:


Buildings and improvements	20	-	40	years
Machinery, furniture, and equipment	1	-	10	years

Construction in progress consists of multiple projects, primarily related to new equipment to expand our manufacturing capability as our product lines grow. Construction in progress includes the cost of construction and other direct costs attributable to the construction, along with capitalized interest. Depreciation is not recorded on construction in progress until such time as the assets are placed in service.

We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. No impairment loss related to property and equipment was recognized during the years ended December 31, 2022, 2021, and 2020. Assets held for disposal are reportable at the lower of the carrying amount or fair value, less costs to sell. No assets were held for disposal as of December 31, 2022 and 2021.

Intangible Assets

Definite-lived intangible assets consist of acquired ANDAs for previously commercialized and marketed drug products, acquired approved ANDAs for generic products yet to be commercialized, an acquired development package for a generic drug product, a license, supply and distribution agreement for a generic drug product, acquired

product rights for generic products, acquired NDAs and product rights for branded products, acquired marketing and distribution rights, acquired customer relationships, and a non-compete agreement. They are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets.

The definite-lived ANDAs, NDAs and product rights, marketing and distribution rights, customer relationships, and non-compete agreement are stated at cost, net of amortization, and generally amortized over their remaining estimated useful lives, ranging from seven to 10 years, based on the straight-line method. In the case of certain NDA and product rights, we use an accelerated amortization method to better match the anticipated economic benefits expected to be provided. Management reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in a manner similar to that for property and equipment. During the year ended December 31, 2022, we recognized a full impairment of a definite-lived ANDA asset with a remaining carrying value of $0.1 million. During the year ended December 31, 2021, we recognized an impairment charge of $2.4 million related to a definite-lived ANDA intangible asset. During the year ended December 31, 2020, we recognized an impairment charge of $0.4 million relating to a marketing and distribution right asset. No events or circumstances arose in 2022, 2021, or 2020 that indicated that the carrying value of any of our other definite-lived intangible assets may not be recoverable.

Our indefinite-lived intangible assets other than goodwill include in-process research and development (“IPR&D”) projects. IPR&D intangible assets represent the fair value of technology acquired in a business combination for which the technology projects are incomplete but have substance. When an IPR&D project is completed (generally upon receipt of regulatory approval), the asset is then accounted for as a definite-lived intangible asset. We test for impairment of indefinite-lived intangible assets at least annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying amount of the asset might not be recoverable. Judgment is used in determining when these events and circumstances arise. If we determine that the carrying value of the assets may not be recoverable, judgment and estimates are used to assess the fair value of the assets and to determine the amount of any impairment loss. No events or circumstances arose in 2022 that indicated that the carrying value of any of our other indefinite-lived intangible assets may not be recoverable.

Goodwill

Goodwill relates to the 2013 merger with BioSante Pharmaceuticals, Inc. and the acquisitions of WellSpring and Novitium, and represents the excess of the total purchase consideration over the fair value of acquired assets and assumed liabilities, using the purchase method of accounting. Goodwill is not amortized, but is subject to periodic review for impairment. Goodwill is reviewed for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying amount of the goodwill might not be recoverable. We have determined that goodwill resides in one reporting unit, Generics, Established Brands, and Other.

Before employing detailed impairment testing methodologies, we first evaluate the likelihood of impairment by considering qualitative factors relevant to our reporting unit. When performing the qualitative assessment, we evaluate events and circumstances that would affect the significant inputs used to determine the fair value of the goodwill. Events and circumstances evaluated include macroeconomic conditions that could affect us, industry and market considerations for the generic pharmaceutical industry that could affect us, cost factors that could affect our performance, our financial performance (including share price), and consideration of any company-specific events that could negatively affect us, our business, or the fair value of our business. If we determine that it is more likely than not that goodwill is impaired, we will then apply detailed testing methodologies. Otherwise, we will conclude that no impairment has occurred.

Detailed impairment testing involves comparing the fair value of our Generics, Established Brands, and Other reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of ANI. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit were to exceed its fair value, we would recognize an impairment charge for the amount by which the carrying amount exceeded the reporting unit’s fair value. The loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Based on our evaluations, described in the preceding paragraph, it was more likely than not that the fair value of our Generics, Established Brands, and Other reporting unit is greater than its carrying value as of October 31, 2022 and 2021, and

therefore no quantitative testing for impairment was required. No impairment loss related to goodwill was recognized in the years ended December 31, 2022, 2021, and 2020.

Collaborative Arrangements

At times, we have entered into arrangements with various commercial partners to further business opportunities. In collaborative arrangements such as these, when we are actively involved and exposed to the risks and rewards of the activities and are determined to be the principal participant in the collaboration, we classify third party costs incurred and revenues in our consolidated statements of operations on a gross basis. Otherwise, third party revenues and costs generated by collaborative arrangements are presented on a net basis. Payments between us and the other participants are recorded and classified based on the nature of the payments.

Royalties

We have entered profit-sharing arrangements with third parties in which we sell products under ANDAs or NDAs owned or licensed by these third parties. Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products. These profit-sharing percentages are recorded in cost of sales in our consolidated statements of operations when the associated revenue is recognized and are recorded in accrued royalties in our consolidated balance sheets when the associated revenue is recognized and until payment has occurred.

Research and Development Expenses

Research and development costs are expensed as incurred and primarily consist of expenses relating to product development. Research and development costs totaled $22.3 million, $11.4 million, and $16.0 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Stock-Based Compensation

We have a stock-based compensation plan that includes stock options and restricted stock, which are awarded in exchange for employee and non-employee director services. From time to time, we may make awards through an inducement grant outside of our plan to induce prospective employees to accept employment with us. These grants are made pursuant to inducement grants outside of our shareholder approved equity plan as permitted under the Nasdaq Stock Market listing rules. Stock-based compensation cost for stock options is determined at the grant date using an option pricing model and stock-based compensation cost for restricted stock is based on the closing market price of the stock at the grant date. The value of the award is recognized as expense on a straight-line basis over the employee’s requisite service period and classified where the underlying salaries are classified. We also account for forfeitures as they occur. We recognize excess tax benefits or tax deficiencies as a component of our current period provision for income taxes.

In addition, in July 2016, we commenced administration of our Employee Stock Purchase Plan (“ESPP”). We recognize the estimated fair value of stock-based compensation awards and classify the expense where the underlying salaries are classified.

We incurred $14.3 million, $10.4 million, and $12.8 million of non-cash, stock-based compensation cost for the years ended December 31, 2022, 2021, and 2020, respectively, and $313 thousand, $123 thousand, and $180 thousand of the 2022, 2021, and 2020 expense related to the ESPP, respectively. In 2020, we recognized $3.4 million of stock compensation expense related to the modification of awards of our former President and Chief Executive Officer, pursuant to his termination without good cause.

Valuation of stock awards requires us to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the future volatility of our stock price and dividend yields. Changes in these assumptions can affect the fair value estimate.

Income Taxes

We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted.

The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. We have provided a valuation allowance against certain of our state net operating loss (“NOL”) carryforwards that are not expected to be used during the carryforward periods. As of December 31, 2022, our valuation allowance is $0.4 million and relates to state NOL carryforwards.

We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We have not identified any uncertain income tax positions that could have a material impact on the consolidated financial statements.

We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense; we did not have any material amounts accrued as of December 31, 2022, 2021, and 2020. We are subject to taxation in various U.S. jurisdictions, Canada, and India, and all of our income tax returns remain subject to examination by tax authorities due to the availability of NOL carryforwards.

We consider potential tax effects resulting from discontinued operations and for gains and losses in other comprehensive income and record intra-period tax allocations, when those effects are deemed material. We previously entered into an interest rate swap agreement (Note 5) that we have designated as a cash flow hedge designed to manage exposure to changes in LIBOR-based interest rate underlying our variable rate debt. Due to the effective nature of the hedge, the initial fair value of the hedge and subsequent changes in the fair value of the hedge are recognized in accumulated other comprehensive loss, net of tax in the consolidated balance sheets. Income taxes are allocated to the hedge component of accumulated other comprehensive income based on appropriate intra-period tax allocations when those effects are deemed material.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings (loss) per share by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our ESPP, unvested restricted stock awards under the treasury stock method, and convertible preferred stock using the if-converted method. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share.

Our unvested restricted shares and convertible preferred stock shares contain non-forfeitable rights to dividends, and therefore are considered to be participating securities; in periods of net income, the calculation of basic and diluted earnings (loss) per share excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares and the common shares assumed converted from the preferred shares and excludes the impact of those shares from the denominator.

Earnings per share for the years ended December 31, 2022, 2021, and 2020 are calculated for basic and diluted earnings (loss) per share as follows:


	Basic						Diluted
(in thousands, except per share amounts)	Years Ended December 31,						Years Ended December 31,
	2022		2021		2020		2022		2021		2020
Net loss	$	(47,896)	$	(42,603)	$	(22,548)	$	(47,896)	$	(42,603)	$	(22,548)
Net income allocated to participating securities		—		—		—		—		—		—
Dividends on Series A convertible preferred stock		(1,625)		(190)		—		(1,625)		(190)		—
Net loss available to common shareholders	$	(49,521)	$	(42,793)	$	(22,548)	$	(49,521)	$	(42,793)	$	(22,548)
Basic Weighted-Average Shares Outstanding		16,260		12,596		11,964		16,260		12,596		11,964
Dilutive effect of stock options and ESPP								—		—		—
Diluted Weighted-Average Shares Outstanding								16,260		12,596		11,964

Loss per share	$	(3.05)	$	(3.40)	$	(1.88)	$	(3.05)	$	(3.40)	$	(1.88)

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share, were 2.6 million, 1.7 million, and 1.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. For the years ended December 31, 2022, 2021 and 2020, all potentially dilutive shares were anti-dilutive and excluded from the calculation of diluted loss per share because we recognized a net loss.

Hedge Accounting

At times we use derivative financial instruments to hedge our exposure to interest rate risks. All derivative financial instruments are recognized as either assets or liabilities at fair value on the consolidated balance sheet and are classified as current or non-current based on the scheduled maturity of the instrument.

When we enter into a hedge arrangement and intend to apply hedge accounting, we formally document the hedge relationship and designate the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. When we determine that a derivative financial instrument qualifies as a cash flow hedge and is effective, the changes in fair value of the instrument are recorded in accumulated other comprehensive (loss)/income, net of tax in our consolidated balance sheets and will be reclassified to earnings when the hedged item affects earnings.

Contingent Consideration

The terms of the acquisition agreement between ANI and Novitium Pharma LLC include the potential payment of future consideration that is contingent upon the achievement of certain regulatory and financial performance milestones. At acquisition date, we recorded this contingent consideration at fair value based on the additional consideration expected to be transferred, which is based on the estimate of probability-weighted future cash flows as discounted to present value. Significant inputs used in the measurement of the fair value include discount rates, probabilities of achievement of regulatory-based milestones and payments, and projected revenues and gross profits. The discount rates are derived using accepted valuation methodologies. The probability of achievement of regulatory milestones is based on historical and projected success rates. The projected revenues and gross profits are based on our internal forecasts and long-term plans. We remeasure the fair value of the contingent consideration each reporting period using Level 3 inputs, as discussed further below. Changes in fair value, which incorporate changes in assumptions and the passage of time, are recognized as an operating expense in our consolidated statement of operations. As payments are not expected to be made shortly after the acquisition, any future payment of contingent consideration will be reported as a financing cash flow for amounts paid up to the acquisition-date fair value of the consideration, and as an operating cash outflow for any amounts in excess of the acquisition-date fair value in our consolidated statement of cash flows.

Fair Value of Financial Instruments

Our consolidated balance sheets include various financial instruments (primarily cash and cash equivalents, prepaid expenses, accounts receivable, accounts payable, accrued expenses, and other current liabilities) that are carried at cost and that approximate fair value. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

●

Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

●

Level 2—Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.

●

Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

See Note 9 for additional information regarding fair value.

Restructuring Activities

We define restructuring activities to include costs directly associated with exit or disposal activities. Such costs include cash employee contractual severance and other termination benefits, one-time employee termination severance and benefits, contract termination charges, impairment and acceleration of depreciation associated with long-lived assets, and other exit or disposal costs. In general, we record involuntary employee- related exit and disposal costs when there is a substantive plan for employee severance and related payments are probable and estimable. For one-time termination benefits, including those with a service requirement, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Expense related to one-time termination benefits with a service requirement is recorded over time, as the service is completed. Contract termination fees and penalties, and other exit and disposal costs are generally recorded as incurred. Restructuring activities are recognized as an operating expense in our consolidated statement of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In December 2022, the Financial Accounting Standards Board issued ASU 2022-06, which extended the sunset date of the reference rate reform in ASU 848 from December 31, 2022, to December 31, 2024. We have not adopted the guidance and are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements.

We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our consolidated statements of operations, comprehensive income, balance sheets, or cash flows.

BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2022

BUSINESS COMBINATION

BUSINESS COMBINATION

2. BUSINESS COMBINATION

Summary

On November 19, 2021, we completed our previously announced acquisition of all of the interests of Novitium pursuant to the terms of the Agreement and Plan of Merger, dated as of March 8, 2021, for cash consideration, 2,466,654 restricted shares of our common stock valued at $91.2 million based on our closing stock price of $43.54 on the date of closing and discounted for lack of marketability due to restrictions on shares, and up to $46.5 million in additional contingent consideration. Additionally, we agreed to pay certain debts of Novitium in the amount of

$8.5 million, which we deemed to be paid in consummation of the transaction closing, and not assumed liabilities, and thus were included as additional cash consideration. This acquisition was accounted for as a business combination. The contingent consideration is based on the achievement of certain milestones, including milestones on gross profit of Novitium portfolio products over a 24-month period, regulatory filings completed during this 24-month period, and a percentage of net profits on certain products that are launched in the future. As of the acquisition date, the contingent consideration had a fair value of $30.8 million. The fair value of the contingent consideration was $35.1 million and $31.0 million as of December 31, 2022 and 2021, respectively. Refer to Note 9 for changes in contingent consideration and changes in fair value. Total consideration including cash, restricted shares and contingent consideration was valued at $206.5 million.

Purchase consideration consisted of the following:


	(in thousands)
Cash consideration	$	88,109
Repayment of Novitium debts		8,493
Fair value of restricted shares		91,199
Fair value of contingent consideration		30,800
Gross consideration	$	218,601
Cash acquired		12,076
Net consideration	$	206,525

The cash consideration was funded in part by borrowings under our new credit facility (Note 4) and through issuance of PIPE convertible preferred stock shares (Note 10). We acquired Novitium due to its proven track record of being a research and development growth engine capable of fueling sustainable growth, to expand our research and development pipeline via niche opportunities, to enhance our contract development and manufacturing organization (“CDMO”) business and U.S. based manufacturing capacity, and to diversify our revenue base.

The following presents the final allocation of the purchase price to the assets acquired and liabilities assumed on November 19, 2021:


	(in thousands)
Total Purchase Consideration	$	218,601
Cash and cash equivalents		12,076
Accounts receivable		27,185
Inventories		14,460
Prepaid expenses and other current assets		1,891
Property and equipment		14,331
Intangible assets		139,200
Goodwill		24,641
Other non-current assets		1,413
Total assets acquired		235,197
Accounts payable		1,560
Accrued expense and other current liabilities		6,035
Accrued compensation and other related expenses		4,909
Accrued government rebates		744
Returned goods reserve		2,202
Other non-current liabilities		1,146
Total liabilities assumed		16,596
Net assets acquired	$	218,601

The net assets were recorded at their estimated fair value. In valuing acquired assets and liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates. In connection with the acquisition, we recognized $46.9 million of indefinite-lived

in-process research and development intangible assets, $67.4 million of acquired ANDA intangible assets, and $24.9 million of customer relationship intangible assets.

Goodwill is considered an indefinite-lived asset and relates primarily to intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. Goodwill established as a result of the acquisition is tax deductible in the U.S.

Novitium operations generated $90.3 million and $7.7 million of revenue during the years ended December 31, 2022 and 2021, respectively.

Pro Forma Consolidated Financial Information (unaudited)

The following unaudited pro forma consolidated financial information summarizes the results of operations for the periods indicated as if the Novitium acquisition had been completed as of January 1, 2020.


	Years Ended December 31,
(in thousands)	2021		2020
Net revenues	$	272,888	$	260,951
Net loss	$	(31,740)	$	(48,814)

Transaction Costs

In conjunction with the acquisition, we incurred approximately $9.4 million in transaction costs, all of which were expensed in 2021 as selling, general, and administrative expense in the consolidated statement of operations.

Restricted Shares

The Novitium acquisition consideration included 2,466,654 restricted shares, which were valued at $91.2 million. These shares contain restrictions on their transfer for periods from three to 24 months following the completion of the acquisition. A Finnerty model was used to value the restricted shares. It includes inputs of not readily observable market data, which are Level 3 inputs. These unobservable inputs include ANI stock volatility with a range of 65% to 71%, and the discounted lack of marketability with a range of 7.5% to 21.5% depending on the length of restriction.

RESTRUCTURING

12 Months Ended

Dec. 31, 2022

RESTRUCTURING

RESTRUCTURING

3. RESTRUCTURING

On June 2, 2022, we announced that we intend to cease operations at our Oakville, Ontario, Canada manufacturing plant by the first quarter of 2023. This action is part of ongoing initiatives to capture operational synergies following our acquisition of Novitium in November 2021. We have transitioned the majority of products manufactured or packaged in Oakville to one of our three U.S.-based manufacturing sites and are on track to cease operations by the end of the first quarter 2023. We are seeking to find potential buyers for the Oakville site, though there can be no assurance as to when or if that will occur or the amount of any net proceeds that may be received.

For the year ended December 31, 2022, restructuring activities resulted in expenses of $5.7 million. This included $2.1 million of severance and other employee benefit costs and $3.1 million of asset-related impairment and accelerated depreciation costs, for the year ended December 31, 2022, respectively. There were also $0.4 million of other costs year to date. As of December 31, 2022, $1.4 million of the severance and other employee benefits are unpaid and accrued. These costs are recorded as restructuring activities, an operating item, in the accompanying consolidated statements of operations. Certain of the severance and other employee benefit costs contain a service requirement, and as such, are being accrued over time as they are earned. We expect to incur additional charges of approximately $0.3 million in severance costs, $1.2 million in asset-related accelerated depreciation and $0.2 million to $0.4 million in other charges over the next three months. These costs are part of the Generics, Established Brands, and Other segment.

In conjunction with the planned exit of our Canadian facility, we have determined that the land and building at our Oakville, Ontario, Canada plant will be sold together over the transition period and meet the criteria to be classified as held for sale as of December 31, 2022. The land and building have a net carrying value of $8.0 million, which is presented as assets held for sale on the accompanying consolidated balance sheets. These assets are part of the Generics, Established Brands, and Other segment.

INDEBTEDNESS

12 Months Ended

Dec. 31, 2022

INDEBTEDNESS

INDEBTEDNESS

4. INDEBTEDNESS

Credit Facility

On November 19, 2021, the Company, as borrower, entered into a credit agreement (the “Credit Agreement”) with Truist Bank and other lenders, which provides for credit facilities consisting of (i) a senior secured term loan facility in an aggregate principal amount of $300.0 million (the “Term Facility”) and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $40.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “Revolving Facility,” and together with the Term Facility, the “Credit Facility”).

The Term Facility proceeds were used to finance the cash portion of the consideration under the merger agreement between ANI and Novitium, repay our existing credit facility, and pay fees, costs and expenses incurred in connection with the merger. Proceeds of the Revolving Facility are expected to be used, subject to certain limitations, for working capital and other general corporate purposes.

The Term Facility matures in November 2027 and the Revolving Facility in November 2026. Each permits both base rate borrowings (“ABR Loans”) and Eurodollar rate borrowings (“Eurodollar Loans”), plus a spread of (a) 5.00% above the base rate in the case of ABR Loans under the Term Facility and 6.00% above the LIBOR Rate (or alternate benchmark rate as defined in the Credit Agreement) in the case of LIBOR loans under the Term Facility and (b) 3.75% above the base rate in the case of ABR Loans under the Revolving Facility and 4.75% above the LIBOR Rate (as defined in the Credit Facility) in the case of loans under the Revolving Facility. The interest rate under the Term Facility was 10.39% at December 31, 2022. The Credit Facility has a subjective acceleration clause in case of a material adverse effect. The Term Facility includes a repayment schedule, pursuant to which $750 thousand of the loan will be paid in quarterly installments during the twelve months ended December 31, 2023. As of December 31, 2022, $3.0 million of the loan is recorded as current borrowings in the consolidated balance sheets. As of December 31, 2022, we have not drawn on the Revolving Facility and $40.0 million remained available for borrowing.

We incurred $14.0 million in deferred debt issuance costs associated with the Credit Facility. Costs allocated to the Term Facility are classified as a direct reduction to the current and non-current portion of the borrowings, depending on their nature. Costs allocated to the Revolving Facility are classified as other current and other non-current assets, depending on their nature. We incur a commitment fee of 0.5% per annum on any unused portion of the Revolving Facility.

In connection with entry into the Credit Facility, on November 19, 2021, we terminated our existing Amended and Restated Credit Agreement, dated as of December 27, 2018 (the “Prior Credit Agreement”), among the Company, as borrower, and Citizens Bank with other lenders.

The Credit Facility is secured by a lien on substantially all of ANI Pharmaceuticals, Inc.’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets. The Credit Facility is subject to customary financial and nonfinancial covenants.

The carrying value of the current and non-current components of the Term Facility as of December 31, 2022 and 2021 are:


	Current
	December 31,		December 31,
(in thousands)	2022		2021
Current borrowing on debt	$	3,000	$	3,000
Deferred financing costs		(2,150)		(2,150)
Current debt, net of deferred financing costs	$	850	$	850


	Non-Current
	December 31,		December 31,
(in thousands)	2022		2021
Non-current borrowing on debt	$	294,000	$	297,000
Deferred financing costs		(8,331)		(10,480)
Non-current debt, net of deferred financing costs and current component	$	285,669	$	286,520

As of December 31, 2022, we had a $297.0 million balance on the Term Facility. Of the $0.9 million of unamortized deferred debt issuance costs allocated to the Revolving Facility, $0.6 million is included in other non-current assets in the consolidated balance sheets, and $0.3 million is included in prepaid expenses and other current assets in the consolidated balance sheets.

The contractual maturity of our Term Facility is as follows for the years ending December 31:


(in thousands)	Term Facility
2023	$	3,000
2024		3,000
2025		3,000
2026		3,000
2027		3,000
2028 and thereafter		282,000
Total	$	297,000

The following table sets forth the components of total interest expense related to the Term Facility and the Term Loan, DDTL, and Revolver under our Prior Credit Agreement recognized in our consolidated statements of operations for the year ended December 31:



		Years Ended December 31,
(in thousands)	2022		2021		2020
Contractual coupon	$	26,150	$	11,129	$	8,847
Amortization of finance fees		2,363		914		720
Capitalized interest		(95)		(98)		(88)
	$	28,418	$	11,945	$	9,479

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Subparagraph (h)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

12 Months Ended

Dec. 31, 2022

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

5. DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

In April 2020, we entered into an interest rate swap with Citizens Bank, N.A. to manage our exposure to changes in LIBOR-based interest rates (or alternate benchmark rate as defined in the Credit Agreement) underlying total borrowings under term facilities related to our Prior Credit Agreement. The interest rate swap matures in December 2026. Concurrent with the termination of the Prior Credit Agreement and entry into the Credit Agreement with Truist Bank, the interest rate swap with a notional value of $168.6 million at origin on November 19, 2021 was novated and Truist Bank is the new counterparty. The swap is used to manage changes in LIBOR-based interest rates underlying a portion of the borrowing under the Term Facility. The interest rate swap provides an effective

fixed interest rate of 2.26% and has been designated as an effective cash flow hedge and therefore qualifies for hedge accounting. The notional amount of the interest rate swap was $151.5 million and $165.8 million as of December 31, 2022 and 2021, respectively, and decreases quarterly by approximately $4.0 million until December 2023, after which it remains static until maturity in December 2026. As of December 31, 2022, the fair value of the interest rate swap asset was recorded in other non-current assets in the consolidated balance sheets was $8.8 million. As of December 31, 2022, $12.2 million was recorded in accumulated other comprehensive loss, net of tax in the consolidated balance sheets.

During the year ended December 31, 2022, the change in fair value of the interest rate swaps was a gain of $14.3 million. During the year ended December 31, 2022, gains on the interest rate swap of $15.2 million were recorded in accumulated other comprehensive loss, net of tax in our consolidated statements of comprehensive (loss)/income. Differences between the hedged LIBOR rate and the fixed rate are recorded as interest expense in the same period that the related interest is recorded for the Term Facility based on the LIBOR rate. In the year ended December 31, 2022 and 2021, $2.3 million and $4.8 million, respectively, of interest expense was recognized in relation to the interest rate swaps. Included in these amounts for the years ended December 31, 2022 and 2021 are reclassifications out of accumulated other comprehensive income/loss of $2.8 million and $3.5 million in expense, respectively, related to terminated and de-designated cash flow hedges.

INVENTORIES

12 Months Ended

Dec. 31, 2022

INVENTORIES

INVENTORIES

6. INVENTORIES

Inventories consist of the following as of December 31:


	December 31,		December 31,
(in thousands)	2022		2021
Raw materials	$	70,497	$	51,350
Packaging materials		7,760		5,475
Work-in-progress		1,889		652
Finished goods		35,487		31,969
		115,633		89,446
Reserve for excess/obsolete inventories		(10,278)		(7,753)
Inventories, net	$	105,355	$	81,693

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2022

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

7. PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of December 31:


	December 31,		December 31,
(in thousands)	2022(1)		2021(1)
Land	$	1,549	$	5,947
Buildings		16,659		19,970
Machinery, furniture, and equipment		53,146		46,769
Construction in progress		4,604		2,941
		75,958		75,627
Less: accumulated depreciation		(32,712)		(22,956)
Property and equipment, net	$	43,246	$	52,671

⁽¹⁾Amounts as of December 31, 2022 exclude the land and building at our Canada facility, which are classified as held for sale as of December 31, 2022. These assets have a carrying value of $8.0 million.

Depreciation expense for the years ended December 31, 2022, 2021, and 2020 totaled $7.4 million, $5.5 million, and $4.8 million, respectively. During the years ended December 31, 2022, 2021, and 2020 there was $0.1 million of interest capitalized into construction in progress.

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill

As a result of our 2013 merger with BioSante Pharmaceuticals, Inc. (“BioSante”), we recorded goodwill of $1.8 million. As a result of our acquisition of WellSpring Pharma Services Inc., we recorded additional goodwill of $1.7 million in 2018. From our acquisition of Novitium in 2021, we recorded goodwill of $24.6 million. We have two operating segments, which are the same as our two reporting units, Generics, Established Brands, and Other reporting unit and the Rare Disease reporting unit. All of the goodwill is recorded in our Generics, Established Brands, and Other reporting unit.

For the goodwill impairment analyses performed at October 31, 2022 and 2021, we performed qualitative assessments to determine whether it was more likely than not that our goodwill asset was impaired in order to determine the necessity of performing a quantitative impairment test, under which management would calculate the asset’s fair value. When performing the qualitative assessments, we evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the goodwill. Based on our assessments of the aforementioned factors, it was determined that it was more likely than not that the fair value of our one reporting unit is greater than its carrying amount as of October 31, 2022 and 2021, and therefore no quantitative testing for impairment was required.

In addition to the qualitative impairment analysis performed at October 31, 2022, there were no events or changes in circumstances that would have reduced the fair value of our reporting unit below its carrying value from October 31, 2022 to December 31, 2022. No impairment loss was recognized during the years ended December 31, 2022, 2021, and 2020, and the balance of goodwill was $28.2 million and $27.9 million as of December 31, 2022 and 2021, respectively.

Intangible Assets

The components of net definite-lived intangible assets and net indefinite-lived intangible assets other than goodwill are as follows:


	December 31, 2022				December 31, 2021				Weighted Average
	Gross Carrying		Accumulated		Gross Carrying		Accumulated		Amortization
(in thousands)	Amount		Amortization		Amount		Amortization		Period
Definite-Lived Intangible Assets:
Acquired ANDA intangible assets	$	195,862	$	(75,606)	$	168,536	$	(54,079)	8.3	years
NDAs and product rights		242,372		(162,188)		242,372		(138,835)	9.9	years
Marketing and distribution rights		17,157		(13,309)		17,157		(12,347)	5.5	years
Non-compete agreement		624		(602)		624		(513)	7.0	years
Customer relationships		24,900		(4,150)		24,900		(593)	7.0	years
Indefinite-Lived Intangible Assets:
In process research and development		26,575		—		46,900		—	Indefinite
Total Intangible Assets, net	$	507,490	$	(255,855)	$	500,489	$	(206,367)	8.9	years

During 2022, $20.3 million was reclassified from IPR&D to ANDA intangible assets upon completion of projects and launch of related products. We also added $7.2 million in ANDA intangible assets related to the July 21, 2022 transaction with Oakrum Pharma, LLC (Note 9). These assets will be amortized over a seven-year useful life.

Indefinite-Lived Intangible Assets impairment analysis was performed as of October 31, 2022. We performed qualitative assessments to determine whether it was more likely than not that the assets were impaired in order to determine the necessity of performing a quantitative impairment test, under which management would calculate the asset’s fair value. When performing the qualitative assessments, we evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the assets. Based on our assessments of the aforementioned factors, it was determined that it was more likely than not that the fair value of assets are greater than their carrying amount as of October 31, 2022, and therefore no quantitative testing for impairment was

required. In addition to the qualitative impairment analysis performed, there were no events or changes in circumstances that would have reduced the fair value of assets below their carrying value from October 31, 2022 to December 31, 2022. During the year ended December 31, 2022, we recognized a full impairment of a definite-lived ANDA asset with a remaining carrying value of $0.1 million.

Amortization expense was $49.5 million, $41.8 million, and $39.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. Refer to Note 9 for more details on acquired definite-lived and indefinite-lived intangible assets.

Expected future amortization expense is as follows for the years ending December 31:


(in thousands)
2023	$	51,792
2024		50,996
2025		48,893
2026		35,574
2027		26,663
2028 and thereafter		37,717
Total	$	251,635

Expected amortization expense is an estimate. Actual amounts of amortization expense may differ due to timing of regulatory approvals related to IPR&D assets, additional intangible assets acquired, impairment of intangible assets, and other events.

FAIR VALUE DISCLOSURES

12 Months Ended

Dec. 31, 2022

FAIR VALUE DISCLOSURES

FAIR VALUE DISCLOSURES

9. FAIR VALUE DISCLOSURES

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities) approximate their carrying values because of their short-term nature. The Term Facility bears an interest rate that fluctuates with the changes in LIBOR and, because the variable interest rates approximate market borrowing rates available to us, we believe the carrying values of these borrowings approximated their fair values at December 31, 2022 and 2021.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Contingent Value Rights

Our contingent value rights (“CVRs”), which were granted coincident with our merger with BioSante Pharmaceuticals, Inc. and expire in June 2023, are considered to be contingent consideration and are classified as liabilities. As such, the CVRs were recorded as purchase consideration at their estimated fair value, using Level 3 inputs, and are marked to market each reporting period until settlement. The fair value of CVRs is estimated using the present value of management’s projection of the expected payments pursuant to the terms of the CVR agreement, which is the primary unobservable input. If our projection or expected payments were to increase substantially, the value of the CVRs could increase as a result. The present value of the liability was calculated using a discount rate of 15%. We determined that the fair value of the CVRs was immaterial as of December 31, 2022 and 2021. We also determined that the changes in such fair value were immaterial for the years ended December 31, 2022, 2021, and 2020.

Interest Rate Swap

The fair value of our interest rate swap is estimated based on the present value of projected future cash flows using the LIBOR forward rate curve. In 2023, we expect that this will be replaced by a forward rate curve for an alternate benchmark rate as defined in the Credit Agreement. The model used to value the interest rate swap includes inputs of readily observable market data, a Level 2 input. As described in detail in Note 5, the fair value of the interest rate swap was a $8.8 million asset at December 31, 2022.

Contingent Consideration

In connection with the acquisition of Novitium, we may pay up to $46.5 million in additional consideration related to the achievement of certain milestones, including milestones on gross profit of Novitium portfolio products over a 24-month period, regulatory filings completed during this 24-month period, and a percentage of net profits on certain products that are launched in the future.

The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs. As of the November 19, 2021 acquisition date, the contingent consideration had a fair value of $30.8 million. The fair value of the contingent consideration was $35.1 million and $31.0 million as of December 31, 2022 and 2021, respectively, and is reflected as a non-current accrued contingent consideration liability in the consolidated balance sheet.

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:


Payment Type	Valuation Technique	Unobservable Input	Assumptions
Profit-based milestone payments	Probability-weighted discounted cash flow	Discount rate	13.0%
		Projected fiscal year of payment	2024-2029


Product development-based milestone payments	Probability-weighted discounted cash flow	Discount rate	8.8%
		Probability of payment	95.0%
		Projected fiscal year of payment	2024

The following table presents the changes in contingent consideration balances classified as Level 3 balances for the year ended December 31, 2022 and 2021:


	Years Ended December 31,
(in thousands)	2022		2021
Beginning balance	$	31,000	$	—
Initial valuation		—		30,800
Measurement period adjustment		300		—
Change in fair value		3,758		200
Ending balance	$	35,058	$	31,000

The following table presents our financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2022 and December 31, 2021, by level within the fair value hierarchy:


(in thousands)	Fair Value at
Description	December 31, 2022		Level 1		Level 2		Level 3
Assets
Interest rate swap	$	8,759	$	—	$	8,759	$	—
Liabilities
Contingent consideration	$	35,058	$	—	$	—	$	35,058
CVRs	$	—	$	—	$	—	$	—


	Fair Value at
Description	December 31, 2021		Level 1		Level 2		Level 3
Liabilities
Contingent consideration	$	31,000	$	—	$	—	$	31,000
Interest rate swaps	$	6,790	$	—	$	6,790	$	—
CVRs	$	—	$	—	$	—	$	—

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We have no financial assets and liabilities that are measured at fair value on a non-recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

We have no non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We measure our long-lived assets, including property and equipment, ROU assets, intangible assets, and goodwill, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended December 31, 2022, we recognized an impairment charge of $0.1 million related to a definite-lived ANDA intangible asset. During the year ended December 31, 2021, we recognized an impairment charge of $2.4 million related to a definite-lived ANDA intangible asset. There were no other fair value impairments recognized in the years ended December 31, 2022 and 2021.

Acquired Non-Financial Assets Measured at Fair Value

On July 21, 2022, we acquired four ANDAs from Oakrum Pharma, LLC for total consideration of $8.0 million plus an immaterial amount for the purchase of finished goods inventory. The transaction was funded from cash on hand. We accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition. The product portfolio included one commercial product, one approved product with a launch completed in September and two filed products, with approval pending. We recognized $7.2 million as acquired ANDA intangible assets and $1.2 million as research and development expense because certain of the generic products have significant remaining work required in order to be commercialized and the products do not have an alternative future use. The payment was allocated to the acquired intangible assets and in-process research and development based on relative fair value, which was determined using Level 3 unobservable inputs. We used the present value of the estimated cash flows related to the products, using a discount rate of 13% to determine the fair value of the acquired intangible assets and in-process research and development. The inventory acquired was immaterial. Contingent liabilities are accrued when they are both estimable and probable. We accrued $0.2 million in contingent payments due to a third party upon the launch of a product completed in September. This was accrued and recorded in the fair value of acquired intangible assets as it was probable at the acquisition date and has been paid in December 2022. The ANDA’s will be amortized in full over its useful life of seven years and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2022, and therefore no impairment loss was recognized for the year ended December 31, 2022.

In April 2021, we acquired three NDAs and an ANDA and certain related inventories from Sandoz, Inc. for total consideration of $20.7 million. We also incurred and paid $0.4 million in transaction costs directly related to the acquisition. The acquisition was funded via borrowings under our Revolver. We accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition. We recognized $11.4 million as acquired intangible assets and $9.7 million of inventory at fair value, including $0.6 million of API, $1.0 million of sample inventory, and $8.1 million in finished goods inventory. In order to determine the fair value of the intangible assets, we used the present value of the estimated cash flows related to the product rights using a discount rate of 10%, which are level 3 unobservable inputs. The fair value of the inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin, which are level 3 unobservable inputs. The intangible assets are being amortized in full over a useful life of seven years and are tested for impairment when events or circumstances indicate that the carrying value of the asset may

not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2022 and therefore no impairment loss was recognized for the years ended December 31, 2021 and 2022.

In July 2020, we acquired an ANDA and certain related inventories from a private company for total consideration of $4.3 million. We also incurred and paid $0.1 million in transaction costs directly related to the acquisition. We accounted for this transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition. We recognized $3.0 million as an acquired ANDA intangible asset and $1.4 million in inventory at fair value. The fair value of the inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin, which are level 3 unobservable inputs. The ANDA was being amortized in full over its useful life of seven years. During the fourth quarter 2021, we recognized a full impairment of the remaining $2.4 million carrying value of the asset, as it was determined that the asset would not generate future cash flows.

In January 2020, we completed the acquisition of the U.S. portfolio of 23 generic products and API and finished goods related to certain of those products from Amerigen Pharmaceuticals, Ltd. (“Amerigen”) for a purchase consideration of $56.8 million and up to $25.0 million in contingent payments over the subsequent four years from the acquisition. The product portfolio at the time of the acquisition included ten commercial products, three approved products with launches pending, four filed products and four in-development products as well as a license to commercialize two approved products. Payments were made using cash on hand and through borrowings of $15.0 million under our Revolver. We also incurred and paid $0.7 million in transaction costs directly related to the acquisition. We accounted for the transaction as an asset acquisition and capitalized the transaction costs directly related to the acquisition. We recognized $38.5 million as acquired ANDA intangible assets and $6.7 million as acquired marketing and distribution rights related to the licensed products, which are being amortized over their useful lives of seven years. We also recognized $3.8 million of the purchase price as research and development expense because certain of the generic products have significant remaining work required in order to be commercialized and the products do not have an alternative future use. The payment was allocated to the two asset categories and in-process research and development based on relative fair value, which was determined using Level 3 unobservable inputs. To determine the fair value of the acquired intangible assets and in-process research and development, we used the present value of the estimated cash flows related to the products, using a discount rate of 8%. We also recognized $8.4 million in inventory at fair value, including $1.7 million of API and $6.7 million of finished goods. The fair value of the inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin, which are level 3 unobservable inputs. Contingent liabilities will be accrued when they are both estimable and probable. The intangible assets will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2022 and therefore no impairment loss was recognized for the years ended December 31, 2020, 2021, and 2022.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

MEZZANINE AND STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2022

MEZZANINE AND STOCKHOLDERS' EQUITY

MEZZANINE AND STOCKHOLDERS' EQUITY

10. MEZZANINE AND STOCKHOLDERS’ EQUITY

Stockholders’ Equity

Authorized shares

We are authorized to issue up to 33.3 million shares of common stock with a par value of $0.0001 per share, 0.8 million shares of class C special stock with a par value of $0.0001 per share, and 1.7 million shares of undesignated preferred stock with a par value of $0.0001 per share at December 31, 2022 and 2021.

There were 17.6 million and 17.5 million shares of common stock issued and outstanding as of December 31, 2022, respectively, and 16.9 million and 16.8 million shares of common stock issued and outstanding as of December 31, 2021, respectively. During 2021, we issued 1.5 million shares related to a public offering of our common stock and 2.5 million shares as consideration for our acquisition of Novitium.

There were 11 thousand shares of class C special stock issued and outstanding as of December 31, 2022 and 2021. Each share of class C special stock entitles its holder to one vote per share. Each share of class C special stock

is exchangeable, at the option of the holder, for one share of our common stock, at an exchange price of $90.00 per share, subject to adjustment upon certain capitalization events. Holders of class C special stock are not entitled to receive dividends or to participate in the distribution of our assets if we were to liquidate, dissolve, or wind-up the company. The holders of class C special stock have no cumulative voting, preemptive, subscription, redemption, or sinking fund rights.

Mezzanine Equity

PIPE Shares

Concurrently with the execution of the Merger Agreement, and as financing for a portion of the acquisition, on March 8, 2021, we entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the “PIPE Investor”), pursuant to which we agreed to issue and sell to the PIPE Investor, and the PIPE Investor agreed to purchase, 25,000 shares of our Series A Convertible Preferred Stock (the “PIPE Shares”), for a purchase price of $1,000 per share and an aggregate purchase price of $25.0 million. This agreement closed and the 25,000 PIPE Shares were sold and issued for $25.0 million on November 19, 2021. The PIPE Shares are classified as mezzanine equity because the shares are mandatorily redeemable for cash upon a change in control, an event that is not solely in our control. We incurred $0.2 million in issuance costs associated with the transaction.

The PIPE Shares accrue dividends at 6.50% per year on a cumulative basis, payable in cash or in-kind, and will also participate, on a pro-rata basis, in any dividends that may be declared with respect to our common stock. The PIPE Shares are convertible into our common shares at the conversion price of $41.47 (i) beginning two years after their issuance date, at the election of ANI (in which case the PIPE Investor must convert all of the PIPE Shares), if the volume-weighted average price of our common stock for any 20 trading days out of 30 consecutive trading days exceeds 170% of the conversion price, and (ii) at any time after issuance, at the election of the PIPE Investor. As of December 31, 2022, the PIPE shares are currently convertible into a maximum of 602,901 shares of our common stock.

In case of a liquidation event, the holder of the PIPE Shares will be entitled to receive, in preference to holders of our common stock, the greater of (i) the PIPE Shares’ purchase price plus any accrued and unpaid dividends thereon and (ii) the amount the holder of the PIPE Shares would have received in the liquidation event if it had converted its PIPE Shares into our common stock. The PIPE Shares will have voting rights, voting as one series with our common stock, on as-converted basis, and will have separate voting rights on any (i) amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate”) that adversely amends and relates solely to the terms of the PIPE Shares and (ii) issuance of additional Series A convertible preferred stock. In case of a change of control of ANI, the PIPE Shares will be redeemed at the greater of (i) the PIPE Shares’ purchase price plus any accrued and unpaid dividends thereon and (ii) the change of control transaction consideration that the holder of the PIPE Shares would have received if it had converted into our common stock.

There were 25,000 shares of Series A convertible preferred stock outstanding as of December 31, 2022 and 2021.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

Employee Stock Purchase Plan

In July 2016, we commenced administration of the ANI Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan. The Board of Directors and shareholders approved a maximum of 0.2 million shares of common stock, which were reserved and made available for issuance under the ESPP. Under the ESPP, participants can purchase shares of our stock at a 15% discount. We issued 29 thousand, 14 thousand, and 13 thousand shares in the years ended December 31, 2022, 2021, and 2020, respectively.

The following table summarizes ESPP expense incurred under the 2016 Employee Stock Purchase Plan and included in our consolidated statements of operations:


(in thousands)	Years Ended December 31,
	2022		2021		2020
Cost of sales	$	50	$	15	$	21
Research and development		41		21		36
Selling, general, and administrative		222		87		123
	$	313	$	123	$	180

Stock Incentive Plan

Equity-based service awards are granted under the ANI Pharmaceuticals, Inc. Amended and Restated 2022 Stock Incentive Plan (the “2022 Plan”), which was approved by our stockholders at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) held on April 27, 2022. Prior to this approval, we had been granting equity-based incentive awards under our Sixth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”), which was renamed and was amended and restated to become the 2022 Plan. This amendment and restatement, among other things, increased the number of shares reserved for issuance thereunder by 1,150,000 shares. As of December 31, 2022, 1.1 million shares of our common stock were available for issuance under the 2022 Plan.

From time to time, we may grant stock options to employees through an inducement grant outside of our 2022 Plan to induce prospective employees to accept employment with us (the “Inducement Grants”). The options are granted at an exercise price equal to the fair market value of a share of our common stock on the respective grant date and are generally exercisable in four equal annual installments beginning on the first anniversary of the respective grant date. The grants are made pursuant to inducement grants outside of our stockholder approved equity plan as permitted under the Nasdaq Stock Market listing rules.

We measure the cost of equity-based service awards based on the grant-date fair value of the award. The cost is recognized ratably over the period during which an employee is required to provide service in exchange for the award or the requisite service period. We recognize stock-based compensation expense ratably over the vesting periods of the awards.

The following table summarizes stock-based compensation expense incurred under the Stock Incentive Plans and Inducement Grant and included in our consolidated statements of operations:


(in thousands)	Years Ended December 31,
	2022		2021		2020
Cost of sales	$	482	$	5	$	115
Research and development		710		543		561
Selling, general, and administrative		13,094		9,818		12,080
	$	14,286	$	10,366	$	12,756

We recognized income tax benefits of $1.7 million, $1.0 million, and $1.6 million for stock-based compensation-related tax deductions in our 2022, 2021, and 2020 consolidated statements of operations,

Stock Options

Outstanding stock options granted to employees and consultants generally vest over a period of four years and have 10-year contractual terms. Outstanding stock options granted to non-employee directors generally vest over a period of one to four years and have 10-year contractual terms. Upon exercise of an option, we issue new shares of our common stock or issue shares from treasury stock.

For 2022, 2021, and 2020, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:


	Years Ended December 31,
	2022	2021	2020
Expected option life (years)	5.50 - 6.25	5.50 - 6.25	5.50 - 6.25
Risk-free interest rate	1.71% - 2.83%	0.68% - 1.39%	0.31% - 1.63%
Expected stock price volatility	48.4% - 50.0%	48.2% - 49.5%	49.2% - 51.2%
Dividend yield	—	—	—

We use the simplified method to estimate the expected option life of options. The risk-free interest rate used is the yield on a U.S. Treasury note as of the grant date with a maturity equal to the estimated life of the option. We calculated an estimated volatility rate based on our historical stock price. We have not issued a cash dividend on our common shares in the past nor do we have any current plans to do so in the future; therefore, an expected dividend yield of zero was used.

A summary of stock option activity under the 2022 Plan and Inducement Grants during the years ended December 31, 2022, 2021, and 2020 is presented below:


				Weighted		Weighted
				Average		Average
		Weighted		Grant-		Remaining
(in thousands, except per share and	Option	Average		date		Term	Aggregate
remaining term data)	Shares	Exercise Price		Fair Value		(years)	Intrinsic Value
Outstanding December 31, 2019	757	$	54.21			7.2	$	6,761
Granted	231		30.29	$	14.39
Exercised	(8)		36.81					216
Forfeited	(44)		54.54
Expired	—		—
Outstanding December 31, 2020	936	$	48.44			7.1	$	372
Granted	168		33.09	$	15.71
Exercised	(42)		40.25					552
Forfeited	(19)		59.84
Expired	(55)		55.59
Outstanding at December 31, 2021	988	$	45.56			6.6	$	6,786
Granted	36		34.52	$	16.82
Exercised	(23)		30.03					153
Forfeited	(47)		36.91
Expired	(47)		55.07
Outstanding at December 31, 2022	907	$	45.47			5.6	$	3,868
Exercisable at December 31, 2022	686	$	49.31			4.9	$	2,003

As of December 31, 2022, there was $3.2 million of total unrecognized compensation cost related to non-vested stock options granted under the 2022 Plan and Inducement Grant. The cost is expected to be recognized over a weighted-average period of 2.0 years. During the year ended December 31, 2022, we received $0.7 million in cash from the exercise of stock options and recorded less than $0.1 million tax provision related to these exercises. During the year ended December 31, 2021, we received $1.7 million in cash from the exercise of stock options and recorded a $0.1 million tax provision related to these exercises. During the year ended December 31, 2020, we received $0.3 million in cash from the exercise of stock options and recorded a $43 thousand tax provision related to these exercises.

Restricted Stock Awards

Restricted stock awards (“RSAs”) granted to employees generally vest over a period of four years. RSAs granted to non-officer directors generally vest over a period of one year.

Shares of our common stock delivered to employees and directors will be unrestricted upon vesting. During the vesting period, the recipient of the restricted stock has full voting rights as a stockholder and would receive dividends, if declared, even though the restricted stock remains subject to transfer restrictions and will generally be forfeited upon termination of the officer prior to vesting. The fair value of each RSA is based on the market value of our stock on the date of grant.

A summary of RSA activity under the Plan during the years ended December 31, 2022, 2021, and 2020 is presented below:


		Weighted
		Average Grant		Weighted Average
(in thousands, except per share and		Date Fair		Remaining Term
remaining term data)	Shares	Value		(years)
Unvested at December 31, 2019	192	$	61.46	2.6
Granted	305		44.42
Vested	(127)		58.88
Forfeited	(18)		51.53
Unvested at December 31, 2020	352	$	48.14	2.7
Granted	541		33.02
Vested	(125)		48.32
Forfeited	(61)		48.16
Unvested at December 31, 2021	707	$	36.52	2.8
Granted	748		32.76
Vested	(245)		36.99
Forfeited	(69)		38.08
Unvested at December 31, 2022	1,141	$	33.86	2.6

As of December 31, 2022, there was $31.2 million of total unrecognized compensation cost related to non-vested RSAs granted under the Plan, which is expected to be recognized over a weighted-average period of 2.6 years.

INCOME TAXES

12 Months Ended

Dec. 31, 2022

INCOME TAXES

INCOME TAXES

12. INCOME TAXES

On August 6, 2018, ANI Pharmaceuticals Canada Inc. (“ANI Canada”) acquired all the issued and outstanding equity interests of WellSpring in a non-taxable transaction. Following the consummation of the transaction, WellSpring was merged into ANI Canada. For U.S. Federal and state income tax purposes, ANI Canada is not part of ANI’s consolidated group; rather, ANI Canada is subject to income taxes only in Canada and solely based on its stand-alone operations. The foreign current and foreign deferred provisions (benefits) below represent our tax provision (benefit) from the Canadian, Indian, and Israeli taxing jurisdictions.

We are required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the projected future taxable income and tax planning strategies in making this assessment.

As of December 31, 2022 and 2021, our consolidated valuation allowance was $0.4 million, related solely to deferred tax assets for net operating loss carryforwards in certain U.S. state jurisdictions.

Our total provision for income taxes consists of the following for the years ended December 31, 2022, 2021, and 2020:


(in thousands)	2022		2021		2020
Current income tax provision:
Federal	$	152	$	1,296	$	9,232
State		249		1,320		559
Foreign		66		691		—
Total		467		3,307		9,791
Deferred income tax benefit
Federal		(13,382)		(12,163)		(14,125)
State		(1,722)		(5,122)		744
Foreign		(128)		336		345
Total		(15,232)		(16,949)		(13,036)
Change in valuation allowance		(4)		187		(169)
Total benefit for income taxes	$	(14,769)	$	(13,455)	$	(3,414)

The difference between our expected income tax provision from applying U.S. Federal statutory tax rates to the pre-tax income and actual income tax provision relates primarily to the effect of the following:


	As of December 31,
	2022		2021		2020
US Federal statutory rate	21.0	%	21.0	%	21.0	%
State taxes, net of Federal benefit	3.2	%	3.3	%	1.9	%
Foreign taxes	0.1	%	(1.0)	%	(0.1)	%
Change in valuation allowance	—	%	(0.3)	%	0.7	%
Stock-based compensation	(1.4)	%	(1.7)	%	(2.5)	%
Non-deductible costs	(0.5)	%	(0.8)	%	(3.5)	%
Change in state apportionment factors, state and foreign rates	(0.1)	%	5.5	%	(7.3)	%
Research and experimentation and charitable credits	1.4	%	0.9	%	0.9	%
Transfer pricing and other	(0.1)	%	(2.9)	%	2.0	%
Effective income tax rate	23.6	%	24.0	%	13.1	%

Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Our deferred income tax assets and liabilities consisted of the following:


	As of December 31,
(in thousands)	2022		2021
Deferred tax assets:
Accruals and advances	$	9,233	$	10,149
Stock-based compensation		6,041		5,108
Accruals for chargebacks and returns		15,344		18,371
Inventory		5,292		5,983
Intangible asset		33,431		23,470
Net operating loss carryforwards		5,994		6,038
Other		16,548		8,758
Total deferred tax assets	$	91,883	$	77,877
Deferred tax liabilities:
Depreciation	$	(5,776)	$	(6,601)
Intangible assets		—		(11)
Other		(4,298)		(2,879)
Total deferred tax liabilities	$	(10,074)	$	(9,491)
Valuation allowance		(446)		(450)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$	81,363	$	67,936

As of December 31, 2022, we had U.S. federal net operating loss carryforwards of approximately $22.6 million, all of which arose as a result of the 2013 merger with BioSante Pharmaceuticals, Inc. and from our taxable loss in 2021 and 2022. Our net operating loss carryforwards related to our 2013 merger, if not used, expire in annual increments through 2033 and are limited on an annual basis as prescribed by Section 382 of the U.S. Internal Revenue Code; our current annual limitation is approximately $0.8 million per year. Our net operating losses that arose in 2021 and 2022 do not expire and are not limited by Section 382. Additionally, as of December 31, 2022, we have total net operating losses in Canada of $1.7 million that expire through 2038.

We are subject to income taxes in numerous jurisdictions in the U.S., Canada, and India. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. We establish liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These liabilities are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit. The provision for income taxes includes the impact of changes to the liability that is considered appropriate. We identified no material uncertain income tax positions as of December 31, 2022 and 2021.

We are subject to income tax audits in all jurisdictions for which we file tax returns. Tax audits by their nature are often complex and can require several years to complete. All of our income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

Operating Leases

All our existing leases as of December 31, 2022 are classified as operating leases. As of December 31, 2022, we have 13 material operating leases for facilities and office equipment with remaining terms expiring from 2025 through 2027 and a weighted average remaining lease term of 2.6 years. Many of our existing leases have fair value renewal options, none of which are considered certain of being exercised or included in the minimum lease term. Discount rates used in the calculation of our lease liability ranged between 3.99% and 8.95%.

Rent expense for the years ended December 31, 2022 and 2021 consisted of the following:


	Year Ended December 31,
(in thousands)	2022		2021
Operating lease costs	$	701	$	240
Variable lease costs		236		48
Total lease costs	$	937	$	288

A maturity analysis of our operating leases follows:


(in thousands)
Future payments:
2023	$	798
2024		868
2025		470
2026		89
2027		34
Total	$	2,259

Discount		(194)
Lease liability		2,065
Current lease liability, included in accrued expenses and other in the consolidated balance sheets		(684)
Non-current lease liability, included in derivatives and other non-current liabilities in the consolidated balance sheets	$	1,381

Vendor Purchase Minimums

We have a supply agreement with one vendor that includes purchase minimums. Pursuant to this agreement, we will be required to purchase a total of $0.1 million of API from this vendor during the year ended December 31, 2023.

Government Regulation

Our products and facilities are subject to regulation by a number of federal and state governmental agencies, such as the Drug Enforcement Administration (“DEA”), the Food and Drug Administration (“FDA”), the Centers for Medicare and Medicaid Services (“CMS”), Health Canada, the Central Drugs Standard Control Organization (“CDSCO”), The Narcotics Control Bureau (“NCB”), and India’s Ministry of Health and Family Welfare (“MoHFW”). The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of our products. The DEA, Health Canada, and NCB maintain oversight over our products that are considered controlled substances.

Unapproved Products

Two of our products, Esterified Estrogen with Methyltestosterone (“EEMT”) and Opium Tincture, are marketed without approved NDAs or ANDAs. During the years ended December 31, 2022, 2021, and 2020, net revenues for these products totaled $14.2 million, $16.2 million, and $16.9 million, respectively.

The FDA's policy with respect to the continued marketing of unapproved products appears in the FDA's September 2011 Compliance Policy Guide Sec. 440.100 titled “Marketed New Drugs without Approved NDAs or ANDAs.” Under this policy, the FDA has stated that it will follow a risk-based approach with regard to enforcement against marketing of unapproved products. The FDA evaluates whether to initiate enforcement action on a case-by-case basis, but gives higher priority to enforcement action against products in certain categories, such as those with potential safety risks or that lack evidence of effectiveness.

We continue to believe that, so long as we comply with applicable manufacturing standards, the FDA will continue to operate on a risk-based approach and will not take action against us. However, we can offer no assurance that the FDA will continue to follow this approach or that it will not take a contrary position with any individual product or group of products. If the FDA were to move away from the risk-based approach to enforcement against marketing of unapproved products, we may be required to seek FDA approval for these products or withdraw such products from the market. If we decide to withdraw the products from the market, our net revenues for generic pharmaceutical products would decline materially, and if we decide to seek FDA approval, we would face increased expenses and might need to suspend sales of the products until such approval was obtained, and there are no assurances that we would receive such approval.

In addition, one group of products that we manufacture on behalf of a contract customer is marketed by that customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our contract manufacturing revenues for the group of unapproved products for the years ended December 31, 2022, 2021, and 2020 were $2.6 million, $2.4 million, and $2.8 million, respectively.

Legal proceedings

We are involved, and from time to time may become involved, in various disputes, governmental and/or regulatory inquiries, investigations, government reimbursement related actions and litigation. These matters are complex and subject to significant uncertainties. Due to the inherent unpredictability of legal matters, including litigation, governmental and regulatory matters, particularly where the damages sought are substantial or indeterminate or when the proceedings, investigations or inquiries are in the early stages, we cannot accurately predict the outcome, or the effects of the legal proceedings described below. While we believe that we have valid claims and/or defenses in the litigation and other matters described below, litigation is inherently unpredictable, and the outcome of the proceedings could result in losses, including substantial damages, fines, civil or criminal penalties and injunctive or administrative remedies. We intend to vigorously prosecute and/or defend these matters, as appropriate; however, from time to time, we may settle or otherwise resolve these matters on terms and conditions that we believe are in our best interests. Resolution of any or all claims, investigations, and legal proceedings, individually or in the aggregate, could have a material adverse effect on our results of operations and/or cash flows in any given accounting period or on our overall financial condition.

Some of these matters with which we are involved are described below and in our 2021 Form 10-K, and unless otherwise disclosed, we are unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses. We record accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

From time to time, we are also involved in other pending proceedings for which, in our opinion based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to our results, and therefore remain undisclosed. If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in our opinion, become material, we will disclose such matters.

Furthermore, like many pharmaceutical manufacturers, we are periodically exposed to product liability claims. The prevalence of these claims could limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results. Recent trends in the product liability and director and officer insurance markets is to exclude matters related to certain classes of drugs. Our policies have been subject to such exclusions which place further potential risk of financial loss on us.

Legal fees for litigation-related matters are expensed as incurred and included in the condensed consolidated statements of operations under the selling, general, and administrative expense line item.

Commercial Litigation

In November of 2017, we were served with a complaint filed by Arbor Pharmaceuticals, LLC, in the United States District Court for the District of Minnesota. The complaint alleged false advertising and unfair competition in violation of Section 43(a) of the Lanham Act, Section 1125(a) of Title 15 of the United States Code, and Minnesota State law, under the premise that we sold an unapproved Erythromycin Ethylsuccinate (“EES”) product during the period between September 27, 2016 and November 2, 2018. The complaint sought a trial by jury and monetary damages (inclusive of actual and consequential damages, treble damages, disgorgement of ANI profits, and legal fees) of an unspecified amount. Discovery in this action closed on March 31, 2019 and trial was scheduled to commence on August 25, 2021. On August 3, 2021, the Company entered into a Settlement Agreement with Arbor Pharmaceuticals, LLC to resolve all claims related to Civil Action 17-4910, Arbor Pharmaceuticals, LLC (“Arbor”) v. ANI Pharmaceuticals, Inc., which was pending trial in the United States District Court for the District of Minnesota. Under the terms of the agreement, ANI paid Arbor $8.4 million and Arbor dismissed the action with prejudice. Neither party admitted wrongdoing in reaching this settlement. The Company paid the settlement from cash on the balance sheet

On December 3, 2020, class action complaints were filed against the Company on behalf of putative classes of direct and indirect purchasers of the drug Bystolic. On December 23, 2020, six individual purchasers of Bystolic, CVS, Rite Aid, Walgreen, Kroger, Albertsons, and H-E-B, filed complaints against the Company. On March 15, 2021, the plaintiffs in these actions filed amended complaints. All amended complaints are substantively identical. The plaintiffs in these actions allege that, beginning in 2012, Forest Laboratories, the manufacturer of Bystolic, entered into anticompetitive agreements when settling patent litigation related to Bystolic with seven potential manufacturers of a generic version of Bystolic: Hetero, Torrent, Alkem/Indchemie, Glenmark, Amerigen, Watson, and various of their corporate parents, successors, subsidiaries, and affiliates. ANI itself was not a party to patent litigation with Forest concerning Bystolic and did not settle patent litigation with Forest. The plaintiffs named the Company as a defendant based on the Company’s January 8, 2020 Asset Purchase Agreement with Amerigen. The complaints alleged that the 2013 patent litigation settlement agreement between Forest and Amerigen violated federal and state antitrust laws and state consumer protection laws by delaying the market entry of generic versions of Bystolic. Plaintiffs alleged they paid higher prices as a result of delayed generic competition. Plaintiffs sought damages, trebled or otherwise multiplied under applicable law, injunctive relief, litigation costs and attorneys’ fees. The complaints did not specify the amount of damages sought from the Company or other defendants and the Company at this early stage of the litigation cannot reasonably estimate the potential damages that the plaintiffs will seek. The cases have been consolidated in the United States District Court for the Southern District of New York as In re Bystolic Antitrust Litigation, Case No. 20-cv-005735 (LJL). On April 23, 2021, the Company and other defendants filed motions to dismiss the amended complaints. On January 24, 2022, the court dismissed all claims brought by the plaintiffs without prejudice. The court granted the plaintiffs until February 22, 2022 to file amended complaints, which were filed in federal court in the Southern District of New York, on that date. The newly amended complaints contain substantially similar claims. On April 19, 2022, the Company and other defendants filed motions to dismiss the newly amended complaints. On May 23, 2022, the plaintiffs filed oppositions to the motions to dismiss and, on June 24, 2022, the Company and other defendants filed replies to those oppositions. On February 21, 2023, the Company and the defendants’ motions to dismiss all actions were granted with prejudice. Plaintiffs have thirty days to file an appeal.

On March 24, 2021, Azurity Pharmaceuticals, Inc. (“Azurity”) filed a complaint in the United States District Court for the District of Minnesota against ANI Pharmaceuticals, Inc., asserting that ANI’s vancomycin hydrochloride oral solution drug product infringes U.S. Patent No. 10,688,046. The complaint sought injunctive relief, damages, including lost profits and/or royalty, treble damages, and attorneys’ fee and costs. On February 15, 2022, the Company entered into a settlement agreement with Azurity to resolve all claims related to this action. Under the terms of the agreement, Azurity granted ANI a non-exclusive, non-transferable, non-sublicensable, royalty-bearing license under its Patents to sell ANI product in the United States and dismissed the action with prejudice. In exchange, we paid Azurity $1.9 million of royalties from past sales and we will pay Azurity a royalty equal to 20% of gross margin of sales of the ANI product for a contractually defined term. We paid the settlement from cash on hand and the $1.9 million charge was recorded as cost of sales (excluding depreciation and amortization) on the consolidated statement of operations for the year ended December 31, 2021.

On April 1, 2021, United Therapeutics Corp. and Supernus Pharmaceuticals, Inc. (“UTC/Supernus”) filed a complaint in the United States District Court for the District of Delaware against ANI Pharmaceuticals, Inc., asserting that ANI’s proposed Treprostinil extended release drug product, which is subject to ANI’s Abbreviated New Drug Application No. 215667, infringes U.S. Patent Nos. 7,417,070, 7,544,713, 8,252,839, 8,349,892, 8,410,169, 8,747,897, 9,050,311, 9,278,901, 9,393,203, 9,422,223, 9,593,066 and 9,604,901 (“the Asserted Patents”). The complaint seeks injunctive relief, attorneys' fee and costs. ANI filed its answer and counterclaims on May 28, 2021, denying UTC/Supernus’ allegations and seeking declaratory judgment that ANI has not infringed any valid and enforceable claim of the Asserted Patents, that the Asserted Patents are invalid, and an award of attorneys’ fees and costs. On May 26, 2022, the parties’ respective claims and counterclaims were dismissed pursuant to a confidential settlement agreement.

On October 3, 2022, Azurity Pharmaceuticals, Inc. filed a complaint in the United States District Court for the District of New Jersey against ANI’s wholly owned subsidiary, Novitium Pharma, LLC, asserting that Novitium’s manufacture, use, sale, importation and/or offer to sell Bionpharma Inc.’s (“Bionpharma”) enalapril maleate oral solution drug product (the “Product”) infringes U.S. Patents No. 11,040,023 and 11,141,405. The complaint seeks injunctive relief, and an award of Azurity’s costs and expenses. On October 12, 2022, Bionpharma filed a motion in United States District Court for the District of New Jersey to intervene on Novitium’s behalf in the litigation and on October 14, 2022, Novitium and Bionpharma filed a joint motion to transfer venue to the District of Delaware, which motion to transfer was granted on January 23, 2023. Bionpharma has agreed to indemnify Novitium under the terms of its manufacturing and supply agreement for any damages, costs and expenses relating to actual or alleged infringement of intellectual property rights or sale of the Product by Bionpharma. ANI and Novitium dispute any liability in this matter.

Ranitidine Related Litigation

State of New Mexico Litigation. In July 2020, ANI and Novitium were served with a complaint brought in the First Judicial Court, County of Santa Fe, State of New Mexico by the Office of the Attorney General of the State of New Mexico against manufacturers and sellers of ranitidine products. The complaint asserts a public nuisance claim and a negligence claim against the generic ranitidine manufacturer defendants, including ANI and Novitium. The public nuisance claim asserts that the widespread sale of ranitidine products in the state created a public nuisance that requires a state-wide medical monitoring program of New Mexico residents for the development of colorectal cancer, stomach cancer, gastrointestinal disorders and liver disease. As damages, New Mexico asks that the defendants fund this medical monitoring program. The negligence claims assert that the defendants were negligent in selling the product, essentially alleging that it was unreasonable to have the product on the market. With respect to that claim, New Mexico asserts that it paid for ranitidine products through state-funded insurance and health-care programs. On December 15, 2020, the case was removed to federal court and transferred to the In re Zantac multidistrict litigation (“MDL”) pending in the United States District Court for the Southern District of Florida. New Mexico moved for remand to state court. The MDL court granted the remand motion on February 25, 2021. On April 16, 2021, New Mexico filed an amended complaint in the New Mexico First Judicial District Court in Santa Fe County. It did not name ANI in the amended complaint, effectively voluntarily dismissing ANI from the action. Novitium is named as a Defendant in the amended complaint. According to Novitium’s records, Novitium did not ship any ranitidine product to New Mexico, and received no funds from any state funded health care plan or Medicaid. The Defendants filed a motion to dismiss the claims asserted in the New Mexico litigation based primarily on preemption. The motion was denied in August 2021. A motion for reconsideration was denied on September 22, 2022. The case is currently in discovery.

Federal Court Personal Injury Litigation. In June 2020, ANI was served with a personal injury complaint in the case of Koepsel v. Boehringer Ingelheim Pharmaceuticals, et al., MDL No. 20-MD-2924, Case No. 9:20-cv-80882-RLR, filed in the United States District Court for Southern District of Florida, in which the plaintiff alleges that he developed kidney cancer in 2018 as a result of taking over the counter medication containing ranitidine. The Koepsel action was filed within the existing MDL concerning ranitidine-containing drugs pending in the Southern District of Florida before Judge Robin L. Rosenberg, In re Zantac MDL, 20 MDL 2924. A Master Personal Injury Complaint (“MPIC”) in that MDL that was filed on June 22, 2020 also named ANI and Novitium as defendants. ANI was dismissed from the Koepsel case on August 21, 2020 and was dismissed from the MPIC on September 8, 2020. On December 31, 2020, after ANI was dismissed, the district court dismissed the MPIC claims against generic

manufacturer defendants partially with prejudice and partially with leave to replead. The failure to warn and design defect claims were dismissed with prejudice on preemption grounds. An Amended Master Personal Injury Complaint was filed on February 8, 2021, which did not name ANI but did name Novitium. By opinion dated July 8, 2021, the district court dismissed all claims against the generic manufacturer defendants with prejudice on preemption grounds. That decision is on appeal to the Eleventh Circuit Court of Appeals. In addition, by opinion and order dated December 6, 2022, the district court granted the brand manufacturer defendants’ Daubert motion to exclude the plaintiffs’ expert testimony on general causation for the “designated cancers” that the plaintiffs’ leadership team claimed to be caused by ranitidine. The district court also granted the brand manufacturer defendants’ motion for summary judgment because the plaintiffs had failed to produce admissible primary evidence of general causation.

ANI and Novitium were named in other individual personal injury complaints filed in MDL 20 MD 2924 in which plaintiffs allege that they developed cancer after taking prescription and over the counter medication containing ranitidine. ANI was served with complaints in five of those additional cases: Cooper v. Boehringer Ingelheim Pharmaceuticals, et al., MDL No. 20-MD-2924, Case No. 9:20-cv-81130-RLR (served September 30, 2020), Lineberry v. Amneal Pharmaceuticals, LLC, et al., MDL No. 20-MD-2924, Case No. 9:20-cv-81079-RLR (served August 20, 2020), Lovette v. Amneal Pharmaceuticals, LLC, et al., MDL No. 20-MD-2924, Case No. 9:20-cv-81040-RLR (served August 26, 2020), Hightower v. Pfizer, et al, MDL No. 20-MD-2924, Case No. 9-20-cv-82214-RLR (served December 16, 2020) and Bird v. Boehringer Ingelheim Pharmaceuticals, et al., MDL No. 20-MD-2924, Case No. 9-20-cv-80837-RLR (served December 30, 2020). ANI informed counsel for the plaintiffs that ANI did not sell an over the counter ranitidine product and sold a generic prescription ranitidine product for a limited two-month period of time, from July 2019 to September 2019. ANI’s product was voluntarily recalled in January 2020. Each of the plaintiffs in the five pending cases alleges a cancer diagnosis prior to the time that ANI sold ranitidine, and we have informally sought dismissal from these cases on that basis. ANI was voluntarily dismissed from the Cooper, Lineberry and Lovette actions on November 20, 2020, from the Bird action on March 15, 2021, and from the Hightower action on March 29, 2021.

Prior to the district court’s July 8, 2021 preemption decision, Novitium had been named in 158 short form complaints filed by claimants in the MDL. Those complaints were effectively dismissed with prejudice with the MPIC on July 8, 2021. Counsel for the plaintiffs have been notified that Novitium did not sell an over the counter ranitidine product and sold a generic prescription ranitidine product for a limited period of time, from December 2018 until September 2019. Novitium’s product was voluntarily recalled in October 2019. Out of the 158 short form complaints, approximately 114 plaintiffs either were diagnosed with cancer before Novitium began manufacturing the product, only took over the counter ranitidine, or took ranitidine before Novitium began manufacturing it. Two of those 114 plaintiffs dismissed Novitium from their short form complaints. In light of the Court’s dismissal of all claims with prejudice, Novitium has not pursued dismissal of the short form complaints against it at this time. Following the district court’s Daubert decision, plaintiffs began filing additional short form complaints in the MDL. Novitium currently is named as a defendant in more than 200 short form complaints.

State Court Personal Injury Litigation

Illinois. On February 3, 2022, a complaint was filed in Cook County, Illinois, naming Novitium as a defendant. The complaint incorrectly identifies Novitium as a “repackager.” The case is styled Ross v. Boehringer Ingelheim Pharmaceuticals, Inc., et. al. The complaint asserts claims of strict liability/failure to warn, strict liability/design defect, negligent failure to warn, negligent product design, general negligence, negligent misrepresentation, breach of express and implied warranties, and unjust enrichment. The plaintiff alleges that he was diagnosed with prostate cancer in 2017, before Novitium began selling generic ranitidine products, and that he took over the counter ranitidine that he purchased at Walgreens from 2008 to 2019. At this point, the allegations show that the plaintiff’s alleged cancer injury could not have come from a Novitium product. The generic manufacturer defendants filed a motion to dismiss on preemption grounds. That motion is pending.

In August 2022, the Keller Postman law firm commenced six multi-plaintiff actions in Illinois state court naming generic ranitidine manufacturers, including ANI and/or Novitium, as defendants. Those cases are: (1) Jodee Gillespie v. Walgreen Co., et. al., Circuit Court of the Third Judicial Circuit, Madison County, Illinois, Case No. 2022LA001007 (naming both Novitium and ANI); (2) John Jackson v. Walgreen Co., et. al., Circuit Court of the

Third Judicial Circuit, Madison County, Illinois, Case No. 2022LA001012 (naming Novitium); (3) Ayesha Salahuddin v. Walgreen Co., et. al., Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois, Case No. 22LA0709 (naming Novitium); (4) Lashanda McGruder v. Walgreen Co., et. al., Circuit Court of the Third Judicial Circuit, Madison County, Illinois, Case No. 22LA0710 (naming both Novitium and ANI); (5) Richard Devriendt v. Walgreen Co., et. al., Circuit Court of Cook County, Illinois, Case No. 2022L007429 (naming Novitium); (6) Anthony Stigger v. Walgreen Co., et. al., Circuit Court of Cook County, Illinois, Case No. 2022L007396 (naming both Novitium and ANI). The complaints allege causes of action for failure to warn, design defect, general negligence, loss of consortium and wrongful death. Pursuant to an Order of the Illinois Supreme Court dated October 25, 2022, the pending ranitidine personal injury actions in Illinois have been consolidated in Cook County for coordinated pre-trial proceedings. Those pre-trial proceedings are pending in the Circuit Court of Cook County before Judge Daniel A. Trevino. On January 12, 2023, Judge Trevino directed the plaintiffs to dismiss the multi-plaintiff actions and refile each individual plaintiff action under a separate case number. The Keller Postman firm has communicated that it is complying with that directive. At a status conference held on February 16, 2023, the court required that the plaintiffs re-file within 60 days. The court also authorized use of a master complaint, which is due within 21 days. The Keller Postman attorneys requested authority to bypass formal service of process for the refiled single-plaintiff actions, and serve the new complaints by email on outside counsel. Judge Trevino authorized email service. As of February 21, 2023, ANI and Novitium had not yet been served with any of the single-plaintiff complaints.

California. In August and September 2022, the Keller Postman law firm commenced seven multi-plaintiff actions in California state court, Alameda County, naming generic ranitidine manufacturers, including ANI and/or Novitium, as defendants. Those cases are: (1) Carlos Ascencio v. ANI Pharmaceuticals, et. al., Superior Court of California, County of Alameda, Case. No. 22CV016230 (naming both Novitium and ANI); (2) Andre Lebeau v. Actavis Mid Atlantic, LLC et. al., Superior Court of California, County of Alameda, Case No. 22CV016448 (naming Novitium); (3) Roque Torres v. ANI Pharmaceuticals, Inc., et. al., Superior Court of California, County of Alameda, Case No. 22CV016338 (naming both Novitium and ANI); (4) Deborah Hinds v. ANI Pharmaceuticals, Inc., et. al., Superior Court of California, County of Alameda, Case No. 22CV016123 (naming both Novitium and ANI); (5) Mark Cruz v. ANI Pharmaceuticals, Inc., et. al., Superior Court of California, County of Alameda, Case No. 22CV016338 (naming both Novitium and ANI); (6) Bent Olsen v. ANI Pharmaceuticals, Inc., et. al., Superior Court of California, County of Alameda, Case No. 22CV016402 (naming both Novitium and ANI); (7) John Norman v. Actavis Mid Atlantic, LLC, et. al., Superior Court of California, County of Alameda, Case No. 22CV018334 (naming Novitium). The complaints allege causes of action for failure to warn, design defect, general negligence, loss of consortium and wrongful death. By stipulation and order dated December 28, 2022, the cases were transferred to an existing civil case coordination docket for pretrial proceedings (JCCP) pending before Judge Evelio Grillo in Alameda County. By order dated January 19, 2023, Judge Grillo ordered that counsel for the plaintiffs must dismiss the individual plaintiffs (other than the first-named plaintiff) from each of the multi-plaintiff complaints and that each of the dismissed plaintiffs must re-file their claims in a single plaintiff complaint. As of February 21, 2023, ANI and Novitium had not yet been served with any of these single-plaintiff complaints. As of February 21, 2023, the Company is aware of three single-plaintiff cases in which Novitium is named as a defendant: David Duncan v. GSK Holdings, No. T23-507; Charmaine Sili v. GSK Holdings, No. T23-355; and Charles Crippen v. Boehringer, No. T23-349.

Pennsylvania. In September 2022, two single-plaintiff complaints were filed in Pennsylvania state court, Philadelphia County, naming Novitium as a defendant: (1) William Titus v. Glaxo SmithKline LLC, et. al., Court of Common Pleas, Philadelphia County, Pennsylvania, Case No. 220902548; and (2) Jodi Woodard v. Ajanta Pharma USA, Inc., et. al., Court of Common Pleas, Philadelphia County, Pennsylvania, Case No. 220902329. These complaints allege causes of action for negligence, failure to warn, negligent storage and transportation, breach of express and implied warranties, negligent misrepresentation, and fraud. On February 16, 2023, the Pennsylvania plaintiffs filed a consolidated long-form complaint against the generic defendants, Plaintiffs v. Actavis, et. al. Civil Action No. 1364. The long-form complaint names Novitium as a defendant. The long form complaint asserts causes of action for negligence, failure to warn, negligent storage and transportation, breach of express warranties, breach of implied warranties, negligent misrepresentation, fraud, strict products liability, wrongful death and survivor

actions, and loss of consortium. The complaint includes a prayer for punitive damages. The court has not yet set a deadline for responsive pleadings.

ANI and Novitium dispute any liability in these matters.

Other Industry Related Matters

On or about September 20, 2017, the Company and certain of its employees were served with search warrants and/or grand jury subpoenas to produce documents and possibly testify relating to a federal investigation of the

generic pharmaceutical industry. We have been cooperating and intend to continue cooperating with the investigation. However, no assurance can be given as to the timing or outcome of the investigation.

PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES

12 Months Ended

Dec. 31, 2022

PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES

PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES

14. PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES

In January 2016, we acquired the right, title and interest in the NDAs for Cortrophin Gel and Cortrophin-Zinc. Subsequently, we assembled a Cortrophin Gel re-commercialization team of scientists, executed a long-term supply agreement with a supplier of pig pituitary glands, our primary raw material for corticotrophin API, executed a long-term supply agreement with an API manufacturer, with whom we have advanced the manufacture of corticotropin API via manufacture of commercial-scale batches, and executed a long-term commercial supply agreement with a current good manufacturing practice (“cGMP”) aseptic fill contract manufacturer.

Prior to the third quarter 2019, all purchases of material, including pig pituitary glands and API, related to the re-commercialization efforts were consumed in research and development activities and recognized as research and development expense in the period in which they were incurred. In the third quarter of 2019, we began purchasing materials that are intended to be used commercially in anticipation of FDA approval of Cortrophin Gel and the resultant product launch. The FDA granted approval of the sNDA of this product on October 29, 2021. Prior to FDA approval, under U.S. GAAP, we were prohibited from capitalizing these pre-launch purchases of materials as inventory, and accordingly, they were charged to expense in the period in which they were incurred. Subsequent to approval, these purchases are recorded as inventory at net realizable value. During the years ended December 31, 2021 and 2020, we recognized $0.8 million and $11.3, million, respectively, of charges for the purchase of materials. We also incurred other charges directly related to the Cortrophin pre-launch commercialization efforts, including, but not limited to, sales and marketing and consulting expenses. During the year ended December 31, 2021, we incurred $14.0 million of these charges, which are included on the consolidated statements of operations as a selling, general, and administrative expense. There were no comparable expenses in 2020.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

15. RELATED PARTY TRANSACTIONS

On March 8, 2021, we entered into an Equity Commitment and Investment Agreement with the PIPE Investor, pursuant to which we agreed to issue and sell 25,000 shares of our PIPE Shares for a purchase price of $1,000 per share and an aggregate purchase price of $25.0 million. This agreement closed and the shares were sold and issued for $25.0 million on November 19, 2021. The Chairman of our board of directors is an operating partner of Ampersand Capital Partners, an affiliate of the PIPE Investor.

In August 2020, we appointed Jeanne Thoma as a director of the Company. Ms. Thoma is the former Chief Executive Officer of SPI Pharmaceuticals, Inc. (“SPI”), who retired in October 2020. SPI supplies ingredients to the Company. We made payments totaling approximately $352,000 in the year ended 2020, to SPI, related to the purchase of ingredients.

In connection with our acquisition of Novitium, we entered into employment agreements with the two executives and founders of Novitium, Muthusamy Shanmugam and Chad Gassert. Both serve as executive officers of the Company and Mr. Shanmugam was also appointed to the board of directors. Mr. Shanmugam holds a minority interest in Scitus Pharma Services (“Scitus”), which provides clinical research services to Novitium, majority

interest in SS Pharma LLC (“SS Pharma”), which acquires and supplies API to Novitium, a minority interest in Nuray Chemical Private Limited (“Nuray”), which manufactures and supplies API to Novitium, and a majority interest in Esjay Pharma LLC (“Esjay”), which provided research and development and facilities consulting services through September 30, 2022. Mr. Gassert holds a minority interest in Scitus.

A summary of our payments to related parties is presented below:


	Years Ended December 31,
	2022		2021(1)		2020
Scitus Pharma Services	$	2,074,773	$	—	$	—
SS Pharma LLC		3,668,542		—		—
Esjay Pharma LLC		101,468		24,989		—
Nuray Chemical Private Limited		1,110,158		364,620		—
	$	6,954,941	$	389,609	$	—

⁽¹⁾Includes payments during the period from November 19, 2021 to December 31, 2021, subsequent to our acquisition of Novitium.

As of December 31, 2022, the outstanding balances due to Scitus and SS Pharma were $45 thousand and $170 thousand, respectively. There was no outstanding balance due to Nuray at December 31, 2022.

SEGMENT REPORTING

12 Months Ended

Dec. 31, 2022

SEGMENT REPORTING

SEGMENT REPORTING

16. SEGMENT REPORTING

An operating segment is defined as a component of an entity that engages in business activities from which it may recognize revenues and incur expense, its operating results are regularly reviewed by the entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and its discrete financial information is available. Prior to 2022, based on this definition, we had concluded that we had one operating segment. Prior period segment disclosures have been recast for the new segment presentation. Effective in the first quarter of 2022 and prospectively, in conjunction with the principal completion of our buildout of infrastructure in the areas of commercialization of rare disease therapies and the launch of Cortrophin Gel, we determined that we have two operating segments as follows:

●

Generics, Established Brands, and Other – Consists of operations related to the development, manufacturing, and marketing of generic and established brand pharmaceuticals, including those sold through traditional channels, contract manufactured products, product development services, royalties, and other.

●

Rare Disease – Consists of operations related to the development, manufacturing and marketing of pharmaceuticals used in the treatment of patients with rare conditions. The rare disease segment currently consists of operations related to Cortrophin Gel.

Our CODM evaluates our two operating segments based on revenues and earnings before interest, income taxes, depreciation, and amortization (“EBITDA”), exclusive of corporate expenses and other expenses not directly allocated or attributable to an operating segment. These expenses include, but are not limited to, certain management, legal, accounting, human resources, insurance, and information technology expenses.

We do not manage assets of the Company by operating segment and our CODM does not review asset information by operating segment. Accordingly, we do not present total assets by operating segment.

Financial information by reportable segment, including historical information that has been retroactively re-cast to reflect our two operating segments, is as follows:


	Year Ended December 31,
(in thousands)	2022		2021		2020
Net Revenues
Generics, Established Brands, and Other	$	274,698	$	216,136	$	208,475

Rare Disease		41,687		—		—
Total net revenues	$	316,385	$	216,136	$	208,475

Segment earnings/(loss) before interest, taxes, depreciation and amortization (“EBITDA”) and reconciliation to (loss)/income before income taxes
Generics, Established Brands, and Other		78,958		63,418		78,790
Rare Disease		(18,348)		(18,571)		(15,620)
Depreciation and amortization		(56,973)		(47,252)		(44,638)
Corporate and other unallocated expenses⁽¹⁾		(38,920)		(37,388)		(34,548)
Total operating loss	$	(35,283)	$	(39,793)	$	(16,016)

Interest expense, net		(28,052)		(11,922)		(9,452)
Other income/(expense), net		670		(4,343)		(494)
Loss before benefit for income taxes		(62,665)		(56,058)		(25,962)

(1)

Includes expenses not directly allocated or attributable to a reporting segment, including certain management, legal, accounting, human resources, insurance, and information technology expenses, and are included in selling, general, and administrative expenses in our consolidated statement of operations.

Geographic Information

Our operations are located in the United States, Canada, and India. The majority of the assets of the Company are located in the United States.

The following table depicts the Company’s revenue by geographic operations during the following periods:


(in thousands)	Years Ended December 31,
Location of Operations	2022		2021		2020
United States	$	312,427	$	211,893	$	202,881
Canada		3,958		4,243		5,594
Total Revenue	$	316,385	$	216,136	$	208,475

The following table depicts the Company’s property and equipment, net according to geographic location as of:


(in thousands)	December 31, 2022		December 31, 2021
United States	$	40,343	$	38,564
Canada⁽¹⁾		1,856		13,831
India		1,047		276
Total property and equipment, net	$	43,246	$	52,671

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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+ Details

. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2022

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency

Use of Estimates

Leases

Leases

Comprehensive Income/(Loss)

Concentration Risk

Credit Concentration

Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and other pharmaceutical companies.

The three customers represent the total percentage of net revenues as follows:



	Years Ended December 31,
	2022		2021		2020
Customer 1	26	%	29	%	31	%
Customer 2	18	%	23	%	24	%
Customer 3	15	%	16	%	19	%

Vendor Concentration

represented at least 10% of inventory purchases. During the year ended December 31, 2020, we purchased approximately 10% of our inventory from one supplier.

Revenue Recognition

We recognize revenue using the following steps:

●

Identification of the contract, or contracts, with a customer;

●

Identification of the performance obligations in the contract;

●

Determination of the transaction price, including the identification and estimation of variable consideration;

●

Allocation of the transaction price to the performance obligations in the contract; and

●

Recognition of revenue when we satisfy a performance obligation.

All revenue recognized in our consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue:



Products and Services	Years Ended December 31,
(in thousands)	2022		2021		2020
Sales of generic pharmaceutical products	$	210,121	$	143,571	$	147,257
Sales of established brand pharmaceutical products		39,463		47,561		47,960
Sales of rare disease pharmaceutical products		41,686		—		—
Sales of contract manufactured products		16,106		10,042		9,221
Royalties from licensing agreements		5,367		11,795		1,396
Product development services		2,949		1,310		1,858
Other		693		1,857		783
Total net revenues	$	316,385	$	216,136	$	208,475



Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2022		2021		2020
Performance obligations transferred at a point in time	$	313,436	$	214,826	$	206,617
Performance obligations transferred over time		2,949		1,310		1,858
Total	$	316,385	$	216,136	$	208,475

Revenue from Sales of Generic and Branded Pharmaceutical Products

Revenue from Distribution Agreements

Chargebacks

Chargeback credits are calculated as follows:

●

A change in customer mix

●

A change in negotiated terms with customers

●

A change in the volume of off-contract purchases

●

Changes in WAC

As necessary, we adjust ASPs based on anticipated changes in the factors above.

Government Rebates

Returns

Administrative Fees and Other Rebates

Prompt Payment Discounts

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2022, 2021, and 2020:


	Accruals for Chargebacks, Returns, and Other Allowances
							Administrative		Prompt
			Government				Fees and Other		Payment
(in thousands)	Chargebacks		Rebates		Returns		Rebates		Discounts
Balance at December 31, 2020 (1)	$	88,746	$	7,826	$	27,155	$	8,906	$	3,839
Accruals/Adjustments		492,374		15,308		24,081		35,225		15,633
Credits Taken Against Reserve		(487,054)		(17,642)		(15,405)		(31,031)		(14,830)
Balance at December 31, 2021 (1)	$	94,066	$	5,492	$	35,831	$	13,100	$	4,642
Accruals/Adjustments		642,409		20,657		23,252		42,044		21,302
Credits Taken Against Reserve		(587,913)		(15,277)		(25,684)		(45,702)		(19,456)
Balance at December 31, 2022 (1)	$	148,562	$	10,872	$	33,399	$	9,442	$	6,488

Contract Manufacturing Product Sales Revenue

Royalties from Licensing Agreements

Product Development Services Revenue

Cash, Cash Equivalents, and Restricted Cash

Accounts Receivable

Inventories

Property and Equipment


Buildings and improvements	20	-	40	years
Machinery, furniture, and equipment	1	-	10	years

Intangible Assets

Goodwill

therefore no quantitative testing for impairment was required. No impairment loss related to goodwill was recognized in the years ended December 31, 2022, 2021, and 2020.

Collaborative Arrangements

Royalties

Research and Development Expenses

Stock-Based Compensation

Income Taxes

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

Earnings per share for the years ended December 31, 2022, 2021, and 2020 are calculated for basic and diluted earnings (loss) per share as follows:


	Basic						Diluted
(in thousands, except per share amounts)	Years Ended December 31,						Years Ended December 31,
	2022		2021		2020		2022		2021		2020
Net loss	$	(47,896)	$	(42,603)	$	(22,548)	$	(47,896)	$	(42,603)	$	(22,548)
Net income allocated to participating securities		—		—		—		—		—		—
Dividends on Series A convertible preferred stock		(1,625)		(190)		—		(1,625)		(190)		—
Net loss available to common shareholders	$	(49,521)	$	(42,793)	$	(22,548)	$	(49,521)	$	(42,793)	$	(22,548)
Basic Weighted-Average Shares Outstanding		16,260		12,596		11,964		16,260		12,596		11,964
Dilutive effect of stock options and ESPP								—		—		—
Diluted Weighted-Average Shares Outstanding								16,260		12,596		11,964

Loss per share	$	(3.05)	$	(3.40)	$	(1.88)	$	(3.05)	$	(3.40)	$	(1.88)

Hedge Accounting

Contingent Consideration

Contingent Consideration

Fair Value of Financial Instruments

●

Level 2—Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.

●

Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

See Note 9 for additional information regarding fair value.

Restructuring Activities

Restructuring Activities

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of customer concentration



	Years Ended December 31,
	2022		2021		2020
Customer 1	26	%	29	%	31	%
Customer 2	18	%	23	%	24	%
Customer 3	15	%	16	%	19	%

Schedule of disaggregation of revenue and revenue recognized



Products and Services	Years Ended December 31,
(in thousands)	2022		2021		2020
Sales of generic pharmaceutical products	$	210,121	$	143,571	$	147,257
Sales of established brand pharmaceutical products		39,463		47,561		47,960
Sales of rare disease pharmaceutical products		41,686		—		—
Sales of contract manufactured products		16,106		10,042		9,221
Royalties from licensing agreements		5,367		11,795		1,396
Product development services		2,949		1,310		1,858
Other		693		1,857		783
Total net revenues	$	316,385	$	216,136	$	208,475



Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2022		2021		2020
Performance obligations transferred at a point in time	$	313,436	$	214,826	$	206,617
Performance obligations transferred over time		2,949		1,310		1,858
Total	$	316,385	$	216,136	$	208,475

Schedule of accruals and allowances

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2022, 2021, and 2020:


	Accruals for Chargebacks, Returns, and Other Allowances
							Administrative		Prompt
			Government				Fees and Other		Payment
(in thousands)	Chargebacks		Rebates		Returns		Rebates		Discounts
Balance at December 31, 2020 (1)	$	88,746	$	7,826	$	27,155	$	8,906	$	3,839
Accruals/Adjustments		492,374		15,308		24,081		35,225		15,633
Credits Taken Against Reserve		(487,054)		(17,642)		(15,405)		(31,031)		(14,830)
Balance at December 31, 2021 (1)	$	94,066	$	5,492	$	35,831	$	13,100	$	4,642
Accruals/Adjustments		642,409		20,657		23,252		42,044		21,302
Credits Taken Against Reserve		(587,913)		(15,277)		(25,684)		(45,702)		(19,456)
Balance at December 31, 2022 (1)	$	148,562	$	10,872	$	33,399	$	9,442	$	6,488

Schedule of property, plant and equipment useful lives


Buildings and improvements	20	-	40	years
Machinery, furniture, and equipment	1	-	10	years

Schedule of earnings per share, basic and diluted

Earnings per share for the years ended December 31, 2022, 2021, and 2020 are calculated for basic and diluted earnings (loss) per share as follows:


	Basic						Diluted
(in thousands, except per share amounts)	Years Ended December 31,						Years Ended December 31,
	2022		2021		2020		2022		2021		2020
Net loss	$	(47,896)	$	(42,603)	$	(22,548)	$	(47,896)	$	(42,603)	$	(22,548)
Net income allocated to participating securities		—		—		—		—		—		—
Dividends on Series A convertible preferred stock		(1,625)		(190)		—		(1,625)		(190)		—
Net loss available to common shareholders	$	(49,521)	$	(42,793)	$	(22,548)	$	(49,521)	$	(42,793)	$	(22,548)
Basic Weighted-Average Shares Outstanding		16,260		12,596		11,964		16,260		12,596		11,964
Dilutive effect of stock options and ESPP								—		—		—
Diluted Weighted-Average Shares Outstanding								16,260		12,596		11,964

Loss per share	$	(3.05)	$	(3.40)	$	(1.88)	$	(3.05)	$	(3.40)	$	(1.88)

BUSINESS COMBINATION (Tables)

12 Months Ended

Dec. 31, 2022

BUSINESS COMBINATION

Schedule of purchase consideration


	(in thousands)
Cash consideration	$	88,109
Repayment of Novitium debts		8,493
Fair value of restricted shares		91,199
Fair value of contingent consideration		30,800
Gross consideration	$	218,601
Cash acquired		12,076
Net consideration	$	206,525

Schedule of purchase price allocation


	(in thousands)
Total Purchase Consideration	$	218,601
Cash and cash equivalents		12,076
Accounts receivable		27,185
Inventories		14,460
Prepaid expenses and other current assets		1,891
Property and equipment		14,331
Intangible assets		139,200
Goodwill		24,641
Other non-current assets		1,413
Total assets acquired		235,197
Accounts payable		1,560
Accrued expense and other current liabilities		6,035
Accrued compensation and other related expenses		4,909
Accrued government rebates		744
Returned goods reserve		2,202
Other non-current liabilities		1,146
Total liabilities assumed		16,596
Net assets acquired	$	218,601

Schedule of proforma information


	Years Ended December 31,
(in thousands)	2021		2020
Net revenues	$	272,888	$	260,951
Net loss	$	(31,740)	$	(48,814)

INDEBTEDNESS (Tables)

12 Months Ended

Dec. 31, 2022

INDEBTEDNESS

Schedule of carrying value of the current and non-current components of the term loan

The carrying value of the current and non-current components of the Term Facility as of December 31, 2022 and 2021 are:


	Current
	December 31,		December 31,
(in thousands)	2022		2021
Current borrowing on debt	$	3,000	$	3,000
Deferred financing costs		(2,150)		(2,150)
Current debt, net of deferred financing costs	$	850	$	850


	Non-Current
	December 31,		December 31,
(in thousands)	2022		2021
Non-current borrowing on debt	$	294,000	$	297,000
Deferred financing costs		(8,331)		(10,480)
Non-current debt, net of deferred financing costs and current component	$	285,669	$	286,520

Schedule of contractual maturity of term loan and DDTL

The contractual maturity of our Term Facility is as follows for the years ending December 31:


(in thousands)	Term Facility
2023	$	3,000
2024		3,000
2025		3,000
2026		3,000
2027		3,000
2028 and thereafter		282,000
Total	$	297,000

Schedule of components of total interest expense related to the notes and term loan



		Years Ended December 31,
(in thousands)	2022		2021		2020
Contractual coupon	$	26,150	$	11,129	$	8,847
Amortization of finance fees		2,363		914		720
Capitalized interest		(95)		(98)		(88)
	$	28,418	$	11,945	$	9,479

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2022

INVENTORIES

Schedule of Inventories

Inventories consist of the following as of December 31:


	December 31,		December 31,
(in thousands)	2022		2021
Raw materials	$	70,497	$	51,350
Packaging materials		7,760		5,475
Work-in-progress		1,889		652
Finished goods		35,487		31,969
		115,633		89,446
Reserve for excess/obsolete inventories		(10,278)		(7,753)
Inventories, net	$	105,355	$	81,693

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2022

PROPERTY AND EQUIPMENT

Schedule of property and equipment


	December 31,		December 31,
(in thousands)	2022(1)		2021(1)
Land	$	1,549	$	5,947
Buildings		16,659		19,970
Machinery, furniture, and equipment		53,146		46,769
Construction in progress		4,604		2,941
		75,958		75,627
Less: accumulated depreciation		(32,712)		(22,956)
Property and equipment, net	$	43,246	$	52,671

FAIR VALUE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2022

FAIR VALUE DISCLOSURES

Schedule of recurring Level 3 fair value measurements of contingent consideration

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:


Payment Type	Valuation Technique	Unobservable Input	Assumptions
Profit-based milestone payments	Probability-weighted discounted cash flow	Discount rate	13.0%
		Projected fiscal year of payment	2024-2029


Product development-based milestone payments	Probability-weighted discounted cash flow	Discount rate	8.8%
		Probability of payment	95.0%
		Projected fiscal year of payment	2024

Schedule of changes in contingent consideration


	Years Ended December 31,
(in thousands)	2022		2021
Beginning balance	$	31,000	$	—
Initial valuation		—		30,800
Measurement period adjustment		300		—
Change in fair value		3,758		200
Ending balance	$	35,058	$	31,000

Schedule of financial assets and liabilities accounted for at fair value on a recurring basis


(in thousands)	Fair Value at
Description	December 31, 2022		Level 1		Level 2		Level 3
Assets
Interest rate swap	$	8,759	$	—	$	8,759	$	—
Liabilities
Contingent consideration	$	35,058	$	—	$	—	$	35,058
CVRs	$	—	$	—	$	—	$	—


	Fair Value at
Description	December 31, 2021		Level 1		Level 2		Level 3
Liabilities
Contingent consideration	$	31,000	$	—	$	—	$	31,000
Interest rate swaps	$	6,790	$	—	$	6,790	$	—
CVRs	$	—	$	—	$	—	$	—

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

GOODWILL AND INTANGIBLE ASSETS

Schedule of components of intangible assets

The components of net definite-lived intangible assets and net indefinite-lived intangible assets other than goodwill are as follows:


	December 31, 2022				December 31, 2021				Weighted Average
	Gross Carrying		Accumulated		Gross Carrying		Accumulated		Amortization
(in thousands)	Amount		Amortization		Amount		Amortization		Period
Definite-Lived Intangible Assets:
Acquired ANDA intangible assets	$	195,862	$	(75,606)	$	168,536	$	(54,079)	8.3	years
NDAs and product rights		242,372		(162,188)		242,372		(138,835)	9.9	years
Marketing and distribution rights		17,157		(13,309)		17,157		(12,347)	5.5	years
Non-compete agreement		624		(602)		624		(513)	7.0	years
Customer relationships		24,900		(4,150)		24,900		(593)	7.0	years
Indefinite-Lived Intangible Assets:
In process research and development		26,575		—		46,900		—	Indefinite
Total Intangible Assets, net	$	507,490	$	(255,855)	$	500,489	$	(206,367)	8.9	years

Schedule of expected future amortization expense

Expected future amortization expense is as follows for the years ending December 31:


(in thousands)
2023	$	51,792
2024		50,996
2025		48,893
2026		35,574
2027		26,663
2028 and thereafter		37,717
Total	$	251,635

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

For 2022, 2021, and 2020, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:


	Years Ended December 31,
	2022	2021	2020
Expected option life (years)	5.50 - 6.25	5.50 - 6.25	5.50 - 6.25
Risk-free interest rate	1.71% - 2.83%	0.68% - 1.39%	0.31% - 1.63%
Expected stock price volatility	48.4% - 50.0%	48.2% - 49.5%	49.2% - 51.2%
Dividend yield	—	—	—

Summary of Stock option and restricted stock activity

A summary of stock option activity under the 2022 Plan and Inducement Grants during the years ended December 31, 2022, 2021, and 2020 is presented below:


				Weighted		Weighted
				Average		Average
		Weighted		Grant-		Remaining
(in thousands, except per share and	Option	Average		date		Term	Aggregate
remaining term data)	Shares	Exercise Price		Fair Value		(years)	Intrinsic Value
Outstanding December 31, 2019	757	$	54.21			7.2	$	6,761
Granted	231		30.29	$	14.39
Exercised	(8)		36.81					216
Forfeited	(44)		54.54
Expired	—		—
Outstanding December 31, 2020	936	$	48.44			7.1	$	372
Granted	168		33.09	$	15.71
Exercised	(42)		40.25					552
Forfeited	(19)		59.84
Expired	(55)		55.59
Outstanding at December 31, 2021	988	$	45.56			6.6	$	6,786
Granted	36		34.52	$	16.82
Exercised	(23)		30.03					153
Forfeited	(47)		36.91
Expired	(47)		55.07
Outstanding at December 31, 2022	907	$	45.47			5.6	$	3,868
Exercisable at December 31, 2022	686	$	49.31			4.9	$	2,003

Non-vested Restricted Stock Shares Activity

A summary of RSA activity under the Plan during the years ended December 31, 2022, 2021, and 2020 is presented below:


		Weighted
		Average Grant		Weighted Average
(in thousands, except per share and		Date Fair		Remaining Term
remaining term data)	Shares	Value		(years)
Unvested at December 31, 2019	192	$	61.46	2.6
Granted	305		44.42
Vested	(127)		58.88
Forfeited	(18)		51.53
Unvested at December 31, 2020	352	$	48.14	2.7
Granted	541		33.02
Vested	(125)		48.32
Forfeited	(61)		48.16
Unvested at December 31, 2021	707	$	36.52	2.8
Granted	748		32.76
Vested	(245)		36.99
Forfeited	(69)		38.08
Unvested at December 31, 2022	1,141	$	33.86	2.6

2016 Employee Stock Purchase Plan

Summary of allocated expense


(in thousands)	Years Ended December 31,
	2022		2021		2020
Cost of sales	$	50	$	15	$	21
Research and development		41		21		36
Selling, general, and administrative		222		87		123
	$	313	$	123	$	180

2022 Plan

Summary of allocated expense


(in thousands)	Years Ended December 31,
	2022		2021		2020
Cost of sales	$	482	$	5	$	115
Research and development		710		543		561
Selling, general, and administrative		13,094		9,818		12,080
	$	14,286	$	10,366	$	12,756

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAXES

Schedule of Components of Income Tax Expense (Benefit)

Our total provision for income taxes consists of the following for the years ended December 31, 2022, 2021, and 2020:


(in thousands)	2022		2021		2020
Current income tax provision:
Federal	$	152	$	1,296	$	9,232
State		249		1,320		559
Foreign		66		691		—
Total		467		3,307		9,791
Deferred income tax benefit
Federal		(13,382)		(12,163)		(14,125)
State		(1,722)		(5,122)		744
Foreign		(128)		336		345
Total		(15,232)		(16,949)		(13,036)
Change in valuation allowance		(4)		187		(169)
Total benefit for income taxes	$	(14,769)	$	(13,455)	$	(3,414)

Schedule of Effective Income Tax Rate Reconciliation


	As of December 31,
	2022		2021		2020
US Federal statutory rate	21.0	%	21.0	%	21.0	%
State taxes, net of Federal benefit	3.2	%	3.3	%	1.9	%
Foreign taxes	0.1	%	(1.0)	%	(0.1)	%
Change in valuation allowance	—	%	(0.3)	%	0.7	%
Stock-based compensation	(1.4)	%	(1.7)	%	(2.5)	%
Non-deductible costs	(0.5)	%	(0.8)	%	(3.5)	%
Change in state apportionment factors, state and foreign rates	(0.1)	%	5.5	%	(7.3)	%
Research and experimentation and charitable credits	1.4	%	0.9	%	0.9	%
Transfer pricing and other	(0.1)	%	(2.9)	%	2.0	%
Effective income tax rate	23.6	%	24.0	%	13.1	%

Schedule of Deferred Tax Assets and Liabilities


	As of December 31,
(in thousands)	2022		2021
Deferred tax assets:
Accruals and advances	$	9,233	$	10,149
Stock-based compensation		6,041		5,108
Accruals for chargebacks and returns		15,344		18,371
Inventory		5,292		5,983
Intangible asset		33,431		23,470
Net operating loss carryforwards		5,994		6,038
Other		16,548		8,758
Total deferred tax assets	$	91,883	$	77,877
Deferred tax liabilities:
Depreciation	$	(5,776)	$	(6,601)
Intangible assets		—		(11)
Other		(4,298)		(2,879)
Total deferred tax liabilities	$	(10,074)	$	(9,491)
Valuation allowance		(446)		(450)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$	81,363	$	67,936

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

Schedule of rent expense

Rent expense for the years ended December 31, 2022 and 2021 consisted of the following:


	Year Ended December 31,
(in thousands)	2022		2021
Operating lease costs	$	701	$	240
Variable lease costs		236		48
Total lease costs	$	937	$	288

Schedule of maturity analysis of operating leases

A maturity analysis of our operating leases follows:


(in thousands)
Future payments:
2023	$	798
2024		868
2025		470
2026		89
2027		34
Total	$	2,259

Discount		(194)
Lease liability		2,065
Current lease liability, included in accrued expenses and other in the consolidated balance sheets		(684)
Non-current lease liability, included in derivatives and other non-current liabilities in the consolidated balance sheets	$	1,381

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

Schedule of Related Party Transactions


	Years Ended December 31,
	2022		2021(1)		2020
Scitus Pharma Services	$	2,074,773	$	—	$	—
SS Pharma LLC		3,668,542		—		—
Esjay Pharma LLC		101,468		24,989		—
Nuray Chemical Private Limited		1,110,158		364,620		—
	$	6,954,941	$	389,609	$	—

⁽¹⁾Includes payments during the period from November 19, 2021 to December 31, 2021, subsequent to our acquisition of Novitium.

SEGMENT REPORTING (Tables)

12 Months Ended

Dec. 31, 2022

SEGMENT REPORTING

Schedule of revenue by reportable segments


	Year Ended December 31,
(in thousands)	2022		2021		2020
Net Revenues
Generics, Established Brands, and Other	$	274,698	$	216,136	$	208,475

Rare Disease		41,687		—		—
Total net revenues	$	316,385	$	216,136	$	208,475

Segment earnings/(loss) before interest, taxes, depreciation and amortization (“EBITDA”) and reconciliation to (loss)/income before income taxes
Generics, Established Brands, and Other		78,958		63,418		78,790
Rare Disease		(18,348)		(18,571)		(15,620)
Depreciation and amortization		(56,973)		(47,252)		(44,638)
Corporate and other unallocated expenses⁽¹⁾		(38,920)		(37,388)		(34,548)
Total operating loss	$	(35,283)	$	(39,793)	$	(16,016)

Interest expense, net		(28,052)		(11,922)		(9,452)
Other income/(expense), net		670		(4,343)		(494)
Loss before benefit for income taxes		(62,665)		(56,058)		(25,962)

(1)

Schedule of revenue by geographic operations


(in thousands)	Years Ended December 31,
Location of Operations	2022		2021		2020
United States	$	312,427	$	211,893	$	202,881
Canada		3,958		4,243		5,594
Total Revenue	$	316,385	$	216,136	$	208,475

Schedule of property and equipment by geographic location


(in thousands)	December 31, 2022		December 31, 2021
United States	$	40,343	$	38,564
Canada⁽¹⁾		1,856		13,831
India		1,047		276
Total property and equipment, net	$	43,246	$	52,671

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Concentrations (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue \| Customer concentration \| Customer one
Concentration Risk, Percentage	26.00%	29.00%	31.00%
Revenue \| Customer concentration \| Customer two
Concentration Risk, Percentage	18.00%	23.00%	24.00%
Revenue \| Customer concentration \| Customer three
Concentration Risk, Percentage	15.00%	16.00%	19.00%
Accounts receivable \| Customer concentration \| Three Customers
Concentration Risk, Percentage	82.00%
Accounts receivable \| Customer concentration \| Customer three
Concentration Risk, Percentage	82.00%
Cost of goods sold \| Supplier concentration \| One supplier
Concentration Risk, Percentage	19.00%		10.00%
Accounts payable \| Supplier concentration \| One supplier
Amount payable to supplier	$ 10.9

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue disaggregation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue recognition	$ 316,385	$ 216,136	$ 208,475
Sales of generic pharmaceutical products
Revenue recognition	210,121	143,571	147,257
Sales of established brand pharmaceutical products
Revenue recognition	39,463	47,561	47,960
Sales of rare disease pharmaceutical products
Revenue recognition	41,686
Sales of contract manufactured products
Revenue recognition	16,106	10,042	9,221
Royalties from licensing agreements
Revenue recognition	5,367	11,795	1,396
Product development services
Revenue recognition	2,949	1,310	1,858
Other
Revenue recognition	$ 693	$ 1,857	$ 783

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue timing (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue recognition		$ 316,385	$ 216,136	$ 208,475
Performance obligations satisfied in prior periods		2,200
Deferred revenue		0	100
Revenue recognized		100	100
Tripartite Agreement-Yescart
Revenue recognition	$ 11,200
Performance obligations transferred at a point in time
Revenue recognition		313,436	214,826	206,617
Performance obligations transferred over time
Revenue recognition		$ 2,949	$ 1,310	$ 1,858

- Definition

+ References

+ Details

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accruals and allowances (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Apr. 30, 2016	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accruals and allowances
Beginning balance			$ 105,260
Ending balance			161,052	$ 105,260
Fdic Guaranteed Amount			250
Payments to Acquire Intangible Assets			7,579	21,081	$ 62,187
Cranford Pharmaceuticals
Accruals and allowances
Payments to Acquire Intangible Assets	$ 60,000
Funds held in escrow for asset purchase	$ 5,000
Tripartite Agreement-Yescart
Accruals and allowances
Payment for legal expenditures		$ 400
Sales of contract manufactured products
Accruals and allowances
Revenue, Remaining Performance Obligation, Amount			$ 4,300
Revenue, Remaining Performance Obligation, Remaining Period			6 months
Chargebacks
Accruals and allowances
Beginning balance		88,746	$ 94,066	88,746
Accruals/Adjustments			642,409	492,374
Credits Taken Against Reserve			(587,913)	(487,054)
Ending balance			148,562	94,066	88,746
Government Rebates
Accruals and allowances
Beginning balance		7,826	5,492	7,826
Accruals/Adjustments			20,657	15,308
Credits Taken Against Reserve			(15,277)	(17,642)
Ending balance			10,872	5,492	7,826
Returns
Accruals and allowances
Beginning balance		27,155	35,831	27,155
Accruals/Adjustments			23,252	24,081
Credits Taken Against Reserve			(25,684)	(15,405)
Ending balance			33,399	35,831	27,155
Administrative Fees and Other Rebates
Accruals and allowances
Beginning balance		8,906	13,100	8,906
Accruals/Adjustments			42,044	35,225
Credits Taken Against Reserve			(45,702)	(31,031)
Ending balance			9,442	13,100	8,906
Prompt Payment Discounts
Accruals and allowances
Beginning balance		$ 3,839	4,642	3,839
Accruals/Adjustments			21,302	15,633
Credits Taken Against Reserve			(19,456)	(14,830)
Ending balance			$ 6,488	$ 4,642	$ 3,839

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PPE and Intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Impairment loss related to property and equipment recognized	$ 0	$ 0	$ 0
Assets Held-for-sale, Not Part of Disposal Group	0	0
Impairment of Intangible Assets, Finite-lived	112	2,374	446
Goodwill, Impairment Loss	0	0	0
Research and Development Expense	22,318	11,369	16,001
Allocated Share-based Compensation Expense	14,300	10,400	12,800
Valuation allowance	$ 446	450
Minimum
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	7 years
Maximum
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
Arthur Przybyl [Member]
Allocated Share-based Compensation Expense			3,400
2016 Employee Stock Purchase Plan
Allocated Share-based Compensation Expense	$ 313	$ 123	$ 180
Building and Building Improvements [Member] \| Minimum
Property, Plant and Equipment, Useful Life	20 years
Building and Building Improvements [Member] \| Maximum
Property, Plant and Equipment, Useful Life	40 years
Machinery, furniture and equipment [Member] \| Minimum
Property, Plant and Equipment, Useful Life	1 year
Machinery, furniture and equipment [Member] \| Maximum
Property, Plant and Equipment, Useful Life	10 years

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Earnings per share basic
Net loss	$ (47,896)	$ (42,603)	$ (22,548)
Dividends on Series A Convertible Preferred Stock	(1,625)	(190)
Net loss available to common shareholders	$ (49,521)	$ (42,793)	$ (22,548)
Basic Weighted-Average Shares Outstanding (in shares)	16,260	12,596	11,964
Loss per share	$ (3.05)	$ (3.40)	$ (1.88)
Earnings per share diluted
Net loss	$ (47,896)	$ (42,603)	$ (22,548)
Dividends on Series A Convertible Preferred Stock	(1,625)	(190)
Net loss available to common shareholders	$ (49,521)	$ (42,793)	$ (22,548)
Basic Weighted-Average Shares Outstanding (in shares)	16,260	12,596	11,964
Diluted Weighted-Average Shares Outstanding (in shares)	16,260	12,596	11,964
Loss per share	$ (3.05)	$ (3.40)	$ (1.88)
Anti-dilutive shares (in shares)	2,600	1,700	1,300

BUSINESS COMBINATION (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Nov. 19, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2022 USD ($)
Business acquisition purchase consideration
Fair value of restricted shares		$ 91,199
Novitium
Business acquisition
Shares issued in acquisition (in shares) \| shares	2,466,654	2,500,000
Closing stock price \| $ / shares	$ 43.54
Additional contingent consideration	$ 46,500		$ 46,500
Restriction period for shares issued	24 months
Business acquisition purchase consideration
Cash consideration	$ 88,109
Repayment of Novitium debts	8,493
Fair value of restricted shares	91,199
Fair value of contingent consideration	30,800	$ 31,000	$ 35,058
Gross consideration	218,601
Cash acquired	12,076
Net consideration	$ 206,525
Transaction costs		$ 9,400
Novitium \| Minimum
Business acquisition
Restriction period for shares issued	3 months
Novitium \| Maximum
Business acquisition
Restriction period for shares issued	24 months
Novitium \| Measurement Input, Stock Volatility \| Minimum
Business acquisition purchase consideration
Unobservable inputs	0.65
Novitium \| Measurement Input, Stock Volatility \| Maximum
Business acquisition purchase consideration
Unobservable inputs	0.71
Novitium \| Measurement Input, Discounted Lack of Marketability \| Minimum
Business acquisition purchase consideration
Unobservable inputs	0.075
Novitium \| Measurement Input, Discounted Lack of Marketability \| Maximum
Business acquisition purchase consideration
Unobservable inputs	0.215

BUSINESS COMBINATION - Acquired (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 19, 2021	Dec. 31, 2022	Dec. 31, 2021
Goodwill		$ 28,221	$ 27,888
Novitium
Total Purchase Consideration	$ 218,601
Cash and cash equivalents	12,076
Accounts receivable	27,185
Inventories	14,460
Prepaid expenses and other current assets	1,891
Property and equipment	14,331
Intangible assets	139,200
Goodwill	24,641
Other non-current assets	1,413
Total assets acquired	235,197
Accounts payable	1,560
Accrued expense and other current liabilities	6,035
Accrued compensation and other related expenses	4,909
Accrued government rebates	744
Returned goods reserve	2,202
Other non-current liabilities	1,146
Total liabilities assumed	16,596
Net assets acquired	218,601
Revenue since acquisition date		$ 90,300	$ 7,700
Novitium \| Acquired ANDA intangible assets
Intangible assets	67,400
Novitium \| Customer relationships
Intangible assets	24,900
Novitium \| In process research and development
Intangible assets	$ 46,900

BUSINESS COMBINATION - Pro Forma (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
BUSINESS COMBINATION
Net revenues	$ 272,888	$ 260,951
Net loss	$ (31,740)	$ (48,814)

RESTRUCTURING (Details) $ in Thousands	3 Months Ended	12 Months Ended
RESTRUCTURING (Details) $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Restructuring
Restructuring activity expense		$ 5,679
Assets held for sale	$ 8,020	8,020
Oakville, Ontario, Canada
Restructuring
Restructuring activity expense		5,700
Restructuring accrual	1,400	1,400
Assets held for sale	8,000	8,000
Oakville, Ontario, Canada \| Employee severance and other benefit costs
Restructuring
Restructuring activity expense		2,100
Restructuring expected cost remaining	300	300
Oakville, Ontario, Canada \| Asset-related impairment
Restructuring
Restructuring activity expense	1,200	3,100
Oakville, Ontario, Canada \| Other implementation costs
Restructuring
Restructuring activity expense		400
Oakville, Ontario, Canada \| Other implementation costs \| Minimum
Restructuring
Restructuring expected cost remaining	200	200
Oakville, Ontario, Canada \| Other implementation costs \| Maximum
Restructuring
Restructuring expected cost remaining	$ 400	$ 400

INDEBTEDNESS - Credit facility (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 19, 2021	Dec. 31, 2021	Dec. 31, 2022
Debt
Current debt		$ 850	$ 850
Payments of debt issuance costs		$ 13,968
Credit Facility - 2021
Debt
Current debt			$ 3,000
Payments of debt issuance costs	$ 14,000
Credit Facility - 2021 \| Term Facility
Debt
Maximum borrowing capacity	300,000
Debt effective interest rate (as a percent)			10.39%
Quarterly payment	$ 750
Principal amount			$ 297,000
Credit Facility - 2021 \| Term Facility \| Alternative Base Rate
Debt
Basis spread (as a percent)	5.00%
Credit Facility - 2021 \| Term Facility \| LIBOR
Debt
Basis spread (as a percent)	6.00%
Credit Facility - 2021 \| Revolving Facility
Debt
Maximum borrowing capacity	$ 40,000
Remaining borrowing capacity			40,000
Commitment fee (as a percent)	0.50%
Deferred debt issuance costs			$ 900
Credit Facility - 2021 \| Revolving Facility \| Alternative Base Rate
Debt
Basis spread (as a percent)	3.75%
Credit Facility - 2021 \| Revolving Facility \| LIBOR
Debt
Basis spread (as a percent)	4.75%

INDEBTEDNESS - Facility components (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current debt, net of deferred financing costs	$ 850	$ 850
Non-current debt, net of deferred financing costs and current component	285,669	286,520
Term Loan and DDTL
Current borrowing on debt	3,000	3,000
Deferred financing costs	(2,150)	(2,150)
Current debt, net of deferred financing costs	850	850
Non-current borrowing on debt	294,000	297,000
Deferred financing costs	(8,331)	(10,480)
Non-current debt, net of deferred financing costs and current component	$ 285,669	$ 286,520

INDEBTEDNESS - Outstanding (Details) - Credit Facility - 2021 $ in Millions	Dec. 31, 2022 USD ($)
Term Facility
Borrowing on debt	$ 297.0
Revolving Facility
Total debt issuance costs, net	0.9
Debt issuance costs, noncurrent	0.6
Debt issuance costs, current	$ 0.3

INDEBTEDNESS - Credit facility - Maturity (Details) - Term Facility $ in Thousands	Dec. 31, 2022 USD ($)
2023	$ 3,000
2024	3,000
2025	3,000
2026	3,000
2027	3,000
2028 and thereafter	282,000
Total	$ 297,000

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

INDEBTEDNESS - Interest (Details) - USD ($) $ in Thousands	12 Months Ended
INDEBTEDNESS - Interest (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INDEBTEDNESS
Contractual coupon	$ 26,150	$ 11,129	$ 8,847
Amortization of finance fees	2,363	914	720
Capitalized interest	(95)	(98)	(88)
Interest Expense, Debt	$ 28,418	$ 11,945	$ 9,479

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Apr. 30, 2020
Fair value interest rate derivative assets	$ 8,759
Accumulated other comprehensive loss, net of tax	(12,168)	$ 3,055
Derivative unrealized gain (loss) recorded in OCI	15,335	8,370	$ (6,566)
Interest rate swap
Derivative liability, notional amount	151,500	165,800		$ 168,600
Debt effective interest rate (as a percent)				2.26%
Decrease in notional amount	4,000
Fair value interest rate derivative assets	8,800
Accumulated other comprehensive loss, net of tax	12,200
Derivative unrealized gain (loss)	14,300
Derivative unrealized gain (loss) recorded in OCI	(15,200)
Interest expense	2,300	4,800
Reclassifications out of accumulated other comprehensive income/loss	$ 2,800	$ 3,500

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
INVENTORIES
Raw materials	$ 70,497	$ 51,350
Packaging materials	7,760	5,475
Work-in-progress	1,889	652
Finished goods	35,487	31,969
Inventory, Gross, Total	115,633	89,446
Reserve for excess/obsolete inventories	(10,278)	(7,753)
Inventories, net	$ 105,355	$ 81,693

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment, Gross, Total	$ 75,958	$ 75,627
Less: accumulated depreciation	(32,712)	(22,956)
Property and equipment, net	43,246	52,671
Assets held for sale	8,020
Canada
Property and equipment, net	1,856	13,831
Assets held for sale	8,000
Land
Property, Plant and Equipment, Gross, Total	1,549	5,947
Buildings
Property, Plant and Equipment, Gross, Total	16,659	19,970
Machinery, furniture, and equipment
Property, Plant and Equipment, Gross, Total	53,146	46,769
Construction in progress
Property, Plant and Equipment, Gross, Total	$ 4,604	$ 2,941

PROPERTY AND EQUIPMENT - Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
PROPERTY AND EQUIPMENT
Depreciation	$ 7.4	$ 5.5	$ 4.8
Interest capitalized	$ 0.1	$ 0.1	$ 0.1

GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2018	Dec. 31, 2013	Nov. 19, 2021
Goodwill	$ 28,221	$ 27,888
Goodwill, impairment loss	$ 0	0	$ 0
BioSante Pharmaceuticals
Acquisition of goodwill					$ 1,800
WellSpring
Acquisition of goodwill				$ 1,700
Novitium
Goodwill						$ 24,641
Acquisition of goodwill		$ 24,600

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS - Components (Details) - USD ($) $ in Thousands		12 Months Ended
	Jul. 21, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Definite-Lived Intangible Assets:
Accumulated Amortization		$ (255,855)	$ (206,367)
Weighted Average Amortization Period		8 years 10 months 24 days
Indefinite-Lived Intangible Assets:
Gross Carrying Amount, total		$ 507,490	500,489
Intangible asset impairment charge		112	2,374	$ 446
Amortization of intangible assets		49,500	41,800	$ 39,900
Oakrum Pharma
Definite-Lived Intangible Assets:
Weighted Average Amortization Period	7 years
Indefinite-Lived Intangible Assets:
Intangible asset impairment charge		0
In process research and development
Indefinite-Lived Intangible Assets:
Gross Carrying Amount		26,575	46,900
In process research and development \| Reclassification of Assets on Completion of Project and Launch of Related Products
Definite-Lived Intangible Assets:
Gross Carrying Amount		(20,300)
Acquired ANDA intangible assets
Definite-Lived Intangible Assets:
Gross Carrying Amount		195,862	168,536
Accumulated Amortization		$ (75,606)	(54,079)
Weighted Average Amortization Period		8 years 3 months 18 days
Indefinite-Lived Intangible Assets:
Intangible asset impairment charge		$ 100	2,400
Acquired ANDA intangible assets \| Oakrum Pharma
Definite-Lived Intangible Assets:
Gross Carrying Amount	$ 7,200
Indefinite-Lived Intangible Assets:
Intangible assets acquired	$ 7,200
Acquired ANDA intangible assets \| Reclassification of Assets on Completion of Project and Launch of Related Products
Definite-Lived Intangible Assets:
Gross Carrying Amount		$ 20,300
Weighted Average Amortization Period		7 years
NDAs and product rights
Definite-Lived Intangible Assets:
Gross Carrying Amount		$ 242,372	242,372
Accumulated Amortization		$ (162,188)	(138,835)
Weighted Average Amortization Period		9 years 10 months 24 days
Marketing and distribution rights
Definite-Lived Intangible Assets:
Gross Carrying Amount		$ 17,157	17,157
Accumulated Amortization		$ (13,309)	(12,347)
Weighted Average Amortization Period		5 years 6 months
Non-compete agreement
Definite-Lived Intangible Assets:
Gross Carrying Amount		$ 624	624
Accumulated Amortization		$ (602)	(513)
Weighted Average Amortization Period		7 years
Customer relationships
Definite-Lived Intangible Assets:
Gross Carrying Amount		$ 24,900	24,900
Accumulated Amortization		$ (4,150)	$ (593)
Weighted Average Amortization Period		7 years

GOODWILL AND INTANGIBLE ASSETS - Amortization (Details) $ in Thousands	Dec. 31, 2022 USD ($)
GOODWILL AND INTANGIBLE ASSETS
2023	$ 51,792
2024	50,996
2025	48,893
2026	35,574
2027	26,663
2028 and thereafter	37,717
Total	$ 251,635

FAIR VALUE DISCLOSURES - Level 3 (Details) $ in Thousands	12 Months Ended
FAIR VALUE DISCLOSURES - Level 3 (Details) $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Nov. 19, 2021 USD ($)
Changes in contingent consideration
Level 3 liability, beginning balance	$ 31,000
Initial valuation		$ 30,800
Measurement period adjustment	300
Change in fair value	$ 3,758	$ 200
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability
Level 3 liability, ending balance	$ 35,058	$ 31,000
Discount rate \| Profit-based milestone payments
Unobservable inputs	13.0
Discount rate \| Product development-based milestone payments
Unobservable inputs	8.8
Probability of payment \| Product development-based milestone payments
Unobservable inputs	95.0
BioSante Pharmaceuticals \| Discount rate
Unobservable inputs	15
Novitium
Additional contingent consideration	$ 46,500		$ 46,500

FAIR VALUE DISCLOSURES - Hierarchy (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Nov. 19, 2021
Interest rate swaps, asset	$ 8,759
Interest rate swaps, liability		$ 6,790
Fair Value, Inputs, Level 2 [Member]
Interest rate swaps, asset	8,759
Interest rate swaps, liability		6,790
Interest rate swap
Interest rate swaps, asset	8,800
Interest rate swaps, liability	8,800
Novitium
Contingent consideration	35,058	31,000	$ 30,800
Novitium \| Fair Value, Inputs, Level 3 [Member]
Contingent consideration	$ 35,058	$ 31,000

FAIR VALUE DISCLOSURES - Acquired (Details) $ in Thousands		1 Months Ended			3 Months Ended	12 Months Ended
FAIR VALUE DISCLOSURES - Acquired (Details) $ in Thousands	Jul. 21, 2022 USD ($)	Apr. 30, 2021 USD ($)	Jul. 31, 2020 USD ($)	Jan. 31, 2020 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Research and development						$ 22,318	$ 11,369	$ 16,001
Inventories, net					$ 81,693	105,355	81,693
Raw materials					51,350	70,497	51,350
Finished goods					31,969	$ 35,487	31,969
Useful life of intangible assets						8 years 10 months 24 days
Intangible asset impairment charge						$ 112	2,374	446
Acquired ANDA intangible assets
Finite-lived intangible gross carrying amount					168,536	$ 195,862	168,536
Useful life of intangible assets						8 years 3 months 18 days
Intangible asset impairment charge						$ 100	2,400
Marketing and distribution rights
Finite-lived intangible gross carrying amount					17,157	$ 17,157	17,157
Useful life of intangible assets						5 years 6 months
Oakrum Pharma
Useful life of intangible assets	7 years
Intangible asset impairment charge						$ 0
Oakrum Pharma \| Acquired ANDA intangible assets
Total asset purchase	$ 8,000
Contingent liability not recognized, asset acquisition	200
Finite-lived intangible gross carrying amount	7,200
Research and development	$ 1,200
Oakrum Pharma \| Acquired ANDA intangible assets \| Discount rate
Intangible asset measurement input	13
Sandoz
Total asset purchase		$ 20,700
Transaction costs		400
Finite-lived intangible gross carrying amount		11,400
Inventories, net		9,700
Raw materials		600
Sample inventory		1,000
Finished goods		$ 8,100
Useful life of intangible assets		7 years
Intangible asset impairment charge						0
Sandoz \| Discount rate
Intangible asset measurement input		10
Private Company [Member]
Total asset purchase			$ 4,300
Transaction costs			100
Finite-lived intangible gross carrying amount			3,000
Inventories, net			$ 1,400
Useful life of intangible assets			7 years
Intangible asset impairment charge					$ 2,400
Amerigen Pharmaceuticals, Ltd.
Total asset purchase				$ 56,800
Contingent liability not recognized, asset acquisition				$ 25,000
Period of contingent payments				4 years
Transaction costs				$ 700
Research and development				3,800
Inventories, net				8,400
Raw materials				1,700
Finished goods				$ 6,700
Useful life of intangible assets				7 years
Intangible asset impairment charge						$ 0	$ 0	$ 0
Amerigen Pharmaceuticals, Ltd. \| Revolving Facility
Debt assumed for acquisition				$ 15,000
Amerigen Pharmaceuticals, Ltd. \| Discount rate
Intangible asset measurement input				8
Amerigen Pharmaceuticals, Ltd. \| Acquired ANDA intangible assets
Finite-lived intangible gross carrying amount				$ 38,500
Amerigen Pharmaceuticals, Ltd. \| Marketing and distribution rights
Finite-lived intangible gross carrying amount				$ 6,700

MEZZANINE AND STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands			12 Months Ended
	Nov. 19, 2021 USD ($) D $ / shares shares	Mar. 08, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	Dec. 31, 2020 shares	Dec. 31, 2019 shares
Preferred Stock, Shares Authorized			1,666,667	1,666,667
Preferred Stock, Par or Stated Value Per Share (in dollars per share) \| $ / shares			$ 0.0001	$ 0.0001
Temporary stock issued, value \| $			$ 24,850
Cash paid for costs of share issuances \| $			$ 5,416
Convertible Preferred Stock
Temporary stock issued (in shares)			25,000
Temporary stock issued, value \| $			$ 24,850
Convertible preferred stock outstanding (shares)			25,000	25,000	0	0
PIPE Shares \| Convertible Preferred Stock
Temporary stock issued (in shares)	25,000	25,000
Temporary stock issued (in dollars per share) \| $ / shares	$ 1,000	$ 1,000
Temporary stock issued, value \| $	$ 25,000	$ 25,000
Cash paid for costs of share issuances \| $	$ 200
Shares accrue dividends rate	6.50%
Shares conversion price \| $ / shares	$ 41.47
Threshold number of trading days \| D	20
Number of consecutive trading days \| D	30
Maximum percentage of conversion price	170.00%
Convertible, shares issuable				602,901
Common Stock
Common Stock, Authorized Shares			33,300,000
Common Stock, Par Value (in dollars per share) \| $ / shares			$ 0.0001
Common Stock, Shares, Issued			16,913,000	17,644,000	12,430,000	12,105,000
Common Stock, Shares, Outstanding			16,800,000	17,500,000
Issuance of Common Stock in Public Offering (in shares)			1,500,000
Class C Special Stock
Common Stock, Authorized Shares			800,000
Common Stock, Par Value (in dollars per share) \| $ / shares			$ 0.0001
Common Stock, Shares, Issued			11,000	11,000
Common Stock, Shares, Outstanding			11,000	11,000
Common Stock Conversion Price \| $ / shares			$ 90.00
Novitium
Shares issued in acquisition (in shares)	2,466,654		2,500,000

STOCK-BASED COMPENSATION - Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Allocated share-based compensation expense	$ 14,300	$ 10,400	$ 12,800
Tax benefit from compensation expense	$ 1,700	$ 1,000	$ 1,600
2016 Employee Stock Purchase Plan
Stock-based compensation shares available	200,000
Discount from market price (as a percent)	15.00%
Employee share plan issued (in shares)	29,000	14,000	13,000
Allocated share-based compensation expense	$ 313	$ 123	$ 180
2022 Plan
Stock-based compensation shares available	1,100,000
Stock-based compensation additional shares authorized	1,150,000
Allocated share-based compensation expense	$ 14,286	10,366	12,756
Cost of sales \| 2016 Employee Stock Purchase Plan
Allocated share-based compensation expense	50	15	21
Cost of sales \| 2022 Plan
Allocated share-based compensation expense	482	5	115
Research and development \| 2016 Employee Stock Purchase Plan
Allocated share-based compensation expense	41	21	36
Research and development \| 2022 Plan
Allocated share-based compensation expense	710	543	561
Selling, general and administrative \| 2016 Employee Stock Purchase Plan
Allocated share-based compensation expense	222	87	123
Selling, general and administrative \| 2022 Plan
Allocated share-based compensation expense	$ 13,094	$ 9,818	$ 12,080

STOCK-BASED COMPENSATION - Fair value options (Details) - Options	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Dividend yield	0.00%	0.00%	0.00%
Minimum
Expected option life	5 years 6 months	5 years 6 months	5 years 6 months
Risk-free interest rate	1.71%	0.68%	0.31%
Expected stock price volatility	48.40%	48.20%	49.20%
Maximum
Expected option life	6 years 3 months	6 years 3 months	6 years 3 months
Risk-free interest rate	2.83%	1.39%	1.63%
Expected stock price volatility	50.00%	49.50%	51.20%
Employees and Consultants [Member]
Award expiration period	10 years
Vesting period	4 years
Non Employee Director [Member]
Award expiration period	10 years
Non Employee Director [Member] \| Minimum
Vesting period	1 year
Non Employee Director [Member] \| Maximum
Vesting period	4 years

STOCK-BASED COMPENSATION - Stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Aggregate Intrinsic Value
Proceeds from stock option exercises and ESPP purchases	$ 1,458	$ 2,069	$ 618
Options
Option Shares
Outstanding at the beginning of the period (in shares)	988	936	757
Granted (in shares)	36	168	231
Exercised (in shares)	(23)	(42)	(8)
Forfeited (in shares)	(47)	(19)	(44)
Expired (in shares)	(47)	(55)
Outstanding at the end of the period (in shares)	907	988	936	757
Exercisable at the end of the period (in shares)	686
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 45.56	$ 48.44	$ 54.21
Granted (in dollars per share)	34.52	33.09	30.29
Exercised (in dollars per share)	30.03	40.25	36.81
Forfeited (in dollars per share)	36.91	59.84	54.54
Expired (in dollars per share)	55.07	55.59
Outstanding at the end of the period (in dollars per share)	45.47	45.56	48.44	$ 54.21
Exercisable at the end of the period (in dollars per share)	49.31
Weighted Average Grant-date Fair Value
Granted (in dollars per share)	$ 16.82	$ 15.71	$ 14.39
Weighted Average Remaining Term (years)
Outstanding at the end of the period weighted average remaining term	5 years 7 months 6 days	6 years 7 months 6 days	7 years 1 month 6 days	7 years 2 months 12 days
Exercisable at the end of the period weighted average remaining term	4 years 10 months 24 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period intrinsic value (in dollars)	$ 6,786	$ 372	$ 6,761
Exercised at the end of the period intrinsic value (in dollars)	153	552	216
Outstanding at the end of the period intrinsic value (in dollars)	3,868	6,786	372	$ 6,761
Exercisable at the end of the period intrinsic value (in dollars)	2,003
Unrecognized option costs	$ 3,200
Period of cost recognition	2 years
Proceeds from stock option exercises and ESPP purchases	$ 700	1,700	300
Stock options exercise tax benefit	$ 100	$ 100	$ 43

STOCK-BASED COMPENSATION - RSA activity (Details) - RSAs - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Unvested, Shares, Outstanding, Beginning of period	707	352	192
Unvested Shares, Granted	748	541	305
Unvested Shares, Vested	(245)	(125)	(127)
Unvested Shares, Forfeited	(69)	(61)	(18)
Unvested Shares, Outstanding, End of period	1,141	707	352	192
Weighted Average Grant Date Fair Value, Outstanding, Beginning of period	$ 36.52	$ 48.14	$ 61.46
Weighted Average Grant Date Fair Value, Granted	32.76	33.02	44.42
Weighted Average Grant Date Fair Value, Vested	36.99	48.32	58.88
Weighted Average Grant Date Fair Value, Forfeited	38.08	48.16	51.53
Weighted Average Grant Date Fair Value, Outstanding, End of period	$ 33.86	$ 36.52	$ 48.14	$ 61.46
Weighted Average Remaining Term (years)	2 years 7 months 6 days	2 years 9 months 18 days	2 years 8 months 12 days	2 years 7 months 6 days
Unrecognized non-option costs	$ 31.2
Period of cost recognition	2 years 7 months 6 days
Employees and Consultants [Member]
Vesting period	4 years
Non Employee Director [Member]
Vesting period	1 year

INCOME TAXES - Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets and liabilities	$ 81,363	$ 67,936
Valuation allowance	446	450
ANI Canada [Member]
Deferred tax assets and liabilities	400	$ 400
Operating loss carryforwards	1,700
Federal [Member]
Operating loss carryforwards	22,600
Operating loss carryforwards annual limitation	$ 800

INCOME TAXES - Provision (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current income tax provision:
Federal	$ 152	$ 1,296	$ 9,232
State	249	1,320	559
Foreign	66	691
Total	467	3,307	9,791
Deferred income tax (benefit)/provision:
Federal	(13,382)	(12,163)	(14,125)
State	(1,722)	(5,122)	744
Foreign	(128)	336	345
Total	(15,232)	(16,949)	(13,036)
Change in valuation allowance	(4)	187	(169)
Total benefit for income taxes	$ (14,769)	$ (13,455)	$ (3,414)

INCOME TAXES - Effective rate (Details)	12 Months Ended
INCOME TAXES - Effective rate (Details)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
US Federal statutory rate	21.00%	21.00%	21.00%
State taxes, net of Federal benefit	3.20%	3.30%	1.90%
Foreign taxes	0.10%	(1.00%)	(0.10%)
Change in valuation allowance		(0.30%)	0.70%
Stock-based compensation	(1.40%)	(1.70%)	(2.50%)
Non-deductible costs	(0.50%)	(0.80%)	(3.50%)
Change in state apportionment factors, state and foreign rates	(0.10%)	5.50%	(7.30%)
Research and experimentation and charitable credits	1.40%	0.90%	0.90%
Transfer pricing and other	(0.10%)	(2.90%)	2.00%
Effective income tax rate	23.60%	24.00%	13.10%

INCOME TAXES - Deferred tax (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Accruals and advances	$ 9,233	$ 10,149
Stock-based compensation	6,041	5,108
Accruals for chargebacks and returns	15,344	18,371
Inventory	5,292	5,983
Intangible asset	33,431	23,470
Net operating loss carryforwards	5,994	6,038
Other	16,548	8,758
Total deferred tax assets	91,883	77,877
Deferred tax liabilities:
Depreciation	(5,776)	(6,601)
Intangible assets		(11)
Other	(4,298)	(2,879)
Total deferred tax liabilities	(10,074)	(9,491)
Valuation allowance	(446)	(450)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$ 81,363	$ 67,936

COMMITMENTS AND CONTINGENCIES - Leases expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating lease, weighted average remaining lease term	2 years 7 months 6 days
Operating lease costs	$ 701	$ 240
Variable lease costs	236	48
Total lease costs	$ 937	$ 288
Minimum
Operating lease liability discount rates (in percent)	3.99%
Maximum
Operating lease liability discount rates (in percent)	8.95%

COMMITMENTS AND CONTINGENCIES - Lease maturity (Details) $ in Thousands	Dec. 31, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES
2023	$ 798
2024	868
2025	470
2026	89
2027	34
Total	2,259
Discount	(194)
Lease liability	2,065
Current lease liability	$ (684)
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued Liabilities, Current
Non-current lease liability	$ 1,381
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands			1 Months Ended		2 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Aug. 03, 2021 USD ($)	Mar. 24, 2021 USD ($)	Sep. 30, 2022 plaintiff	Aug. 31, 2022 plaintiff	Sep. 30, 2022 plaintiff	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
COMMITMENTS AND CONTINGENCIES
Long-term purchase commitment, amount						$ 100
Revenue recognition						316,385	$ 216,136	$ 208,475
State Court Personal Injury Litigation \| Illinois
COMMITMENTS AND CONTINGENCIES
Number of plaintiffs \| plaintiff				6
State Court Personal Injury Litigation \| California
COMMITMENTS AND CONTINGENCIES
Number of plaintiffs \| plaintiff					7
State Court Personal Injury Litigation \| Pennsylvania
COMMITMENTS AND CONTINGENCIES
Number of plaintiffs \| plaintiff			2
Arbor Pharmaceuticals
COMMITMENTS AND CONTINGENCIES
Settlement amount awarded to other party	$ 8,400
Azurity Pharmaceuticals
COMMITMENTS AND CONTINGENCIES
Settlement amount awarded to other party		$ 1,900
Royalties on future sales (as a percent)		20.00%
Azurity Pharmaceuticals \| Cost of sales
COMMITMENTS AND CONTINGENCIES
Settlement amount awarded to other party		$ 1,900
Unapproved Products
COMMITMENTS AND CONTINGENCIES
Revenue recognition						14,200	16,200	16,900
Unapproved Products \| Contract Customer
COMMITMENTS AND CONTINGENCIES
Revenue recognition						$ 2,600	$ 2,400	$ 2,800

PURIFIED CORTROPHIN GEL PRE-LAUNCH CHARGES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Purified Cortrophin Gel pre-launch charges		$ 780	$ 11,263
Selling, general, and administrative	$ 124,044	84,294	64,986
Cortrophin Gel
Selling, general, and administrative		$ 14,000	$ 0

RELATED PARTY TRANSACTIONS (Details) - USD ($)			12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Nov. 19, 2021	Mar. 08, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Temporary stock issued, value				$ 24,850,000
Payments to related party			$ 6,954,941	$ 389,609
Convertible Preferred Stock
Related Party Transaction [Line Items]
Temporary stock issued (in shares)				25,000
Temporary stock issued, value				$ 24,850,000
Convertible Preferred Stock \| PIPE Shares
Related Party Transaction [Line Items]
Temporary stock issued (in shares)	25,000	25,000
Temporary stock issued (in dollars per share)	$ 1,000	$ 1,000
Temporary stock issued, value	$ 25,000,000.0	$ 25,000,000.0
Scitus Pharma Services
Related Party Transaction [Line Items]
Payments to related party			2,074,773
Due to related parties			45,000
SS Pharma LLC
Related Party Transaction [Line Items]
Payments to related party			3,668,542
Due to related parties			170,000
Esjay Pharma LLC
Related Party Transaction [Line Items]
Payments to related party			101,468	24,989
Nuray Chemical Private Limited
Related Party Transaction [Line Items]
Payments to related party			1,110,158	$ 364,620
Due to related parties			$ 0
SPI Pharmaceuticals
Related Party Transaction [Line Items]
Payments to related party					$ 352,000

SEGMENT REPORTING - Revenue (Details) $ in Thousands	12 Months Ended
SEGMENT REPORTING - Revenue (Details) $ in Thousands	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)
Segment reporting
Number of segments \| segment	2	1
Revenue recognition	$ 316,385	$ 216,136	$ 208,475
Depreciation and amortization	56,972	47,252	44,638
Corporate and other unallocated expenses	124,044	84,294	64,986
Operating Loss	(35,283)	(39,793)	(16,016)
Interest expense, net	(28,052)	(11,922)	(9,452)
Other income/(expense), net	670	(4,343)	(494)
Loss Before Benefit for Income Taxes	(62,665)	(56,058)	(25,962)
Operating segments \| Generics, Established Brands and Other
Segment reporting
Revenue recognition	274,698	216,136	208,475
EBITDA	78,958	63,418	78,790
Operating segments \| Rare Disease
Segment reporting
Revenue recognition	41,687
EBITDA	(18,348)	(18,571)	(15,620)
Unallocated expenses
Segment reporting
Depreciation and amortization	(56,973)	(47,252)	(44,638)
Corporate and other unallocated expenses	(38,920)	(37,388)	(34,548)
Operating Loss	(35,283)	(39,793)	(16,016)
Interest expense, net	(28,052)	(11,922)	(9,452)
Other income/(expense), net	$ 670	$ (4,343)	$ (494)

SEGMENT REPORTING - Geographic (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment reporting
Revenue recognition	$ 316,385	$ 216,136	$ 208,475
Property and equipment, net	43,246	52,671
Assets held for sale	8,020
United States
Segment reporting
Revenue recognition	312,427	211,893	202,881
Property and equipment, net	40,343	38,564
Canada
Segment reporting
Revenue recognition	3,958	4,243	$ 5,594
Property and equipment, net	1,856	13,831
Assets held for sale	8,000
India
Segment reporting
Property and equipment, net	$ 1,047	$ 276

- Definition

+ References

+ Details

Label	Element	Value
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 5,029,000