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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2019~~2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-08568

Teligent, Inc.

(Formerly IGI Laboratories, Inc.)

(Exact name of registrant as specified in its charter)


Delaware						01-0355758
(State or other jurisdiction						(I.R.S. Employer Identification No.)
of incorporation or organization)

105 Lincoln Ave., Buena, NJ						08310
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code (856) 697-1441

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading symbol(s)

Name of each exchange on

Common Stock, Par Value $0.01 Per Share

TLGT

The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer¨ Accelerated filer ¨

Non-accelerated filer☒

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by

the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter was $2710.46 million.

As of ~~March~~April 2530, ~~2020~~2021, the registrant had 5392,~~899~~817,~~495~~493 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: Certain information required in Part III of this Annual Report on Form 10-K is incorporated from the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 1926, ~~2020~~2021.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements regarding us and our business, financial condition, results of operations and prospects within the meaning of Section 27A of the Securities Act of 1933 (Securities Act), and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.

In some cases, you can identify forward-looking statements by terminology, such as “goals,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” “should,” “would,” “predicts,” “appears,” “projects,” or the negative of such terms or other similar expressions. Factors that could cause or contribute to differences in results and outcomes from those in our forward-looking statements include, without limitation, those discussed in this ~~Current~~Annual Report on Form 10-K, as well as those discussed in our other Securities and Exchange Commission ("SEC") filings. We undertake no obligation to (and expressly disclaim any obligation to) revise or update any forward-looking statements made herein whether as a result of new information, future events or otherwise. However, you should consult any further disclosures we may make on these or related topics in our reports on Form 8-K or Form 10-Q filed with the SEC.

The following discussions should be read in conjunction with the sections of this Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.”

2RISK FACTOR SUMMARY

The risk factors summarized below could materially harm our business, operating results and/or financial condition, impair our future prospects and/or cause the price of our common stock to decline. For more information, see “Item 1A, Risk Factors” in this Annual Report on Form 10-K for the year ended December 31, 2020.

Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, the following:

Risks Related to Our Business

•Issues identified by the FDA in the FDA Warning Letter and additional product quality issues identified by us will have a negative impact on our business, financial position, operating results and cash flows and will delay the FDA’s pre-approval inspection of our newly installed injectable line.

•The ongoing COVID-19 pandemic and actions taken in response to it may result in additional disruptions to our business operations.

•We rely on a limited number of customers for a large portion of our revenues.

•Due to our dependence on a limited number of products, our business will be materially adversely affected if these products do not perform as well as expected.

•The pharmaceutical industry in which we operate is intensely competitive.

•As our competitors introduce their own generic equivalents of our generic pharmaceutical products, our revenues and gross margin from such products may decline, potentially rapidly.

•If pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and other efforts, sales of our generic products may be adversely impacted.

•Our generics business also faces increasing competition from brand-name manufacturers that do not face any significant regulatory approval or other barriers to enter into the generics market.

•Sales of our products may continue to be adversely affected by the continuing consolidation of our distribution network and the concentration of our customer base.

•Lack of availability, issues with quality or significant increases in the cost of raw materials used in manufacturing our products, and inventory challenges could adversely impact our financial condition and operating results.

•We are subject to stringent regulatory requirements related to environmental protection and hazardous waste disposal.

•We are subject to extensive government regulation by the FDA, Health Canada and other federal, state, provincial/territorial and local regulatory authorities.

•Our actual or perceived failure to comply with U.S. federal and state, and foreign laws and regulations imposing obligations on how we collect, use, disclose, store and process personal information could result in liability or reputational harm and could harm our business.

•We could experience business interruptions at our manufacturing facility.

•Any failure to comply with our reporting and payment obligations related to our participation in federal health care programs, including Medicare and Medicaid, could subject us to investigation, penalties, and sanctions.

•Our policies regarding returns, allowances and chargebacks, failure to supply penalties and marketing programs adopted by wholesalers may reduce revenues in future fiscal periods.

•We are subject to federal and state healthcare fraud and abuse and false claims laws and may be subject to related litigation brought by the government or private individuals.

•Our business activities may be subject to the Foreign Corrupt Practices Act and similar anti-bribery and anti-corruption laws of other countries in which we operate.

•Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.

•Even after our products receive regulatory approval, such products may not achieve expected levels of market acceptance.

•Product recalls could harm our business.

•We are susceptible to product liability claims that may not be covered by insurance and could require us to pay substantial sums.

•The testing required for the regulatory approval of our products is conducted by independent third parties.

•Our product offerings and our customers’ products may infringe on the intellectual property rights of third parties.

•Our goodwill, tangible assets or other intangible assets have been subject to impairment charges and may continue to be subject to impairment in the future.

•We may become involved in legal proceedings from time to time which may result in losses, damage to our business and reputation and place a strain on our internal resources.

•We are currently involved in U.S. and Canadian antitrust litigation related to our pricing practices, each of which could result in significant fines, reputational harm or otherwise adverse effects on our business, financial condition and results of operations.

•Our business and operations would suffer in the event of system failures.

•Economic conditions could severely impact us.

•If we are unable to hire additional qualified personnel, our ability to grow or maintain our business may be harmed.

•If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act of 2002, or if we fail to achieve and maintain adequate disclosure controls and procedures and internal control over financial reporting, our business results of operations and financial condition, and investors’ confidence in us, could be materially adversely affected.

•Our past failure to prepare and timely file our periodic report with the SEC may limit our access to the public markets to raise debt or equity capital.

•Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited.

Risks Related to Our Indebtedness

•Our substantial level of indebtedness and our current liquidity constraints could adversely affect our financial condition, cash flows and our ability to service our indebtedness.

•If we fail to comply with the financial covenants contained in our Senior Credit Facilities, our senior lenders could accelerate all amounts owing thereunder which, in turn, could result in the acceleration of all amounts owing under our Series D Notes.

•Restrictive covenants in our Senior Credit Facilities may interfere with our ability to obtain additional advances under existing credit facilities or to obtain new financing or to engage in other business activities.

Risks Related to Our Common Stock

•There is substantial doubt about our ability to continue as a going concern.

•In the event we were to pursue an in-court bankruptcy reorganization under the U.S. Bankruptcy Code, we would be subject to the risks and uncertainties associated with bankruptcy proceedings, including the potential delisting of our common stock from trading on Nasdaq.

•Our stock price is, and we expect it to remain, volatile and subject to wide fluctuations, which may make it difficult for stockholders to sell shares of common stock at or above the price for which they were acquired.

•The Series D Preferred Stock ranks senior to our common stock with respect to dividends, distributions and liquidation. In addition, the conversion of our shares of Series D Preferred Stock could cause substantial dilution to the holders of shares of our common stock.

•We may need to raise additional funds in the future, which may not be available on acceptable terms or at all.

•Shares of our common stock can be relatively illiquid which may affect the trading price of our common stock.

•Our principal stockholders own a significant percentage of our stock and will be able to exercise significant influence over our affairs.

•Due to the concentration of common stock owned by significant stockholders, the sale of such stock might adversely affect the price of our common stock.

•We have not paid dividends to our common stockholders in the past nor do we expect to pay dividends in the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common stock.

PART I

Item 1. BUSINESS

Our Company

Strategic Overview

Teligent, Inc., (the “Company”) is a ~~specialty~~ generic pharmaceutical company. All references to "Teligent," the "Company," "we," "us," and "our" refer to Teligent, Inc. and its subsidiaries. Our mission is to become a leader in ~~the~~high-barrier ~~specialty~~to entry generic ~~pharmaceutical market~~pharmaceuticals. ~~Under~~Our ~~our~~platform ~~own~~for ~~label,~~growth weis ~~currently~~centered ~~market~~around ~~and~~the ~~sell~~development, ~~generic~~manufacturing ~~topical,~~and ~~branded~~marketing ~~generic~~of ~~and~~a ~~generic~~portfolio ~~injectable~~of generic pharmaceutical products inunder ~~the~~our ~~United~~own ~~States~~label and ~~Canada.~~private Inlabeled ~~the~~for ~~United~~other ~~States~~pharmaceutical wecompanies ~~are~~in ~~currently marketing 38 generic~~ topical, ~~pharmaceutical~~injectable ~~products~~ and 4other ~~branded~~high-barrier ~~generic~~dosage ~~pharmaceutical products~~forms. InWe ~~Canada,~~believe wethat ~~sell~~expanding ~~over~~our 32development ~~generic~~ and ~~branded~~commercial ~~generic~~base ~~injectable~~beyond ~~products~~topical ~~and~~generics, ~~medical~~historically ~~devices.~~the ~~Generic~~cornerstone ~~pharmaceutical~~of ~~products~~our ~~are~~expertise, ~~bioequivalent~~ to ~~their~~include ~~brand~~injectable ~~name~~generics ~~counterparts.~~and Weother ~~also~~high-barrier ~~provide~~generics, ~~contract~~will ~~manufacturing~~leverage ~~services~~our toexisting ~~the~~expertise ~~pharmaceutical,~~and ~~over-the-counter~~capabilities, ~~("OTC"),~~ and ~~cosmetic~~broaden ~~markets.~~our Weplatform ~~operate~~for ~~our~~more ~~business~~diversified ~~under~~strategic ~~one segment~~growth.

We currently market and sell generic topical and generic and branded generic injectable pharmaceutical products in the United States and Canada. In the United States, we market 37 generic topical pharmaceutical products and two branded injectable pharmaceutical products. We have received FDA approvals for 36 topical generic products from our internally developed pipeline and we have seven Abbreviated New Drug Applications, ("ANDAs") and three New Drug Application ("NDA") Prior Approval Supplements ("PASs") submitted to the FDA that are awaiting approval. In Canada, we market 25 generic injectable, three generic topical, and three generic ophthalmic products. We have one Abbreviated New Drug Submission (“ANDS”) pending at Health Canada. In the United States, approved ANDA generic drugs are usually interchangeable with the innovator drug. This means that the generic version may generally be substituted for the branded product by either a physician or pharmacist when dispensing a prescription. We also provide contract development and manufacturing services to the prescription and over-the-counter ("OTC") pharmaceutical and cosmetic markets. We operate our business under one operating segment. Our common stock is ~~trading~~traded on the Nasdaq Global Select Market under the trading symbol “TLGT.” Our principal executive office, laboratories and manufacturing facilities are located at 105 Lincoln Avenue, Buena, New Jersey. We have additional offices located in Iselin, New Jersey, and Mississauga, Canada. In late 2020, we decided to reposition the research and development operation mainly performed at our Tallinn, Estonia office to our US manufacturing site at Buena, New Jersey and consequently we are in the process of working to dissolve our Estonia operations.

The manufacturing and commercialization of generic pharmaceutical products is competitive, and there are established manufacturers, suppliers and distributors actively engaged in all phases of our business. We currently manufacture and sell topical, injectable and ophthalmic generic pharmaceutical products under our own label in both the US and Canada.

In the United States, the three large wholesale drug distributors are AmerisourceBergen Corporation ("ABC"); Cardinal Health, Inc. ("Cardinal"); and McKesson Drug Company, ("McKesson"). ABC, Cardinal and McKesson are key distributors of our products, as well as a broad range of health care products for many other companies. None of these distributors is an end user of our products. Generally, if sales to any one of these distributors were to diminish or cease, we believe that the end users of our products would likely find little difficulty obtaining our products either directly from us or from another distributor. However, the loss of one or more of these distributors, together with a delay or inability to secure an alternative distribution source for end users, could have a material negative impact on our revenue, business, financial condition and results of operations. There are generally three major negotiating entities in the US market. Walgreens Boots Alliance Development (WBAD) consists of Walgreens and AmerisourceBergen's PRxO Generics program. Red Oak Sourcing consists of CVS and Cardinal’s source programs. Finally, ClarusOne consists of Walmart, RiteAid and McKesson’s OneStop program. A loss of any of these major entities could result in a significant reduction in revenue.

We consider our business relationships with ABC, Cardinal and McKesson to be in good standing and we have fee for services contracts with each of them. However, a change in purchasing patterns, a decrease in inventory levels, an increase in returns of our products, delays in purchasing products and delays in payment for products by one or more of these distributors could have a material negative impact on our revenue, business, financial condition and results of operations. We continue to explore business development opportunities to add additional products and/or capabilities to our existing portfolio and to expand our private label and contract manufacturing service opportunities.

We have two platforms for growth:

•Developing, manufacturing and marketing a portfolio of generic pharmaceutical products under our own or a private label in topical, injectable, ~~complex~~ and ~~ophthalmic~~other ~~dosage~~high-barrier forms; and

•Managing and expanding our current ~~contract~~private ~~manufacturing~~label and ~~formulation~~contract ~~services~~development and manufacturing business.

WeSince ~~have~~2010, ~~been in~~ the ~~contract~~primary ~~manufacturing~~focus ~~and development~~ of ~~topical products business since the early 1990s, but~~ our strategy ~~since 2010~~ has been ~~focused~~ on the growth of our own generic prescription pharmaceutical business. ~~Since~~particularly ~~2010,~~within wethe ~~have~~generic ~~focused~~topical onpharmaceutical ~~transitioning~~product ~~our~~market, ~~business~~while tomoderating ~~include~~our ~~more~~contract ~~customers~~development inand manufacturing to the ~~topical~~prescription and OTC pharmaceutical ~~industry~~and cosmetic markets. In 2014, we broadened our primary target product focus from topical pharmaceuticals to include a wider ~~specialty~~approach focused on high-barrier generic prescription pharmaceutical ~~approach~~products and generic and branded generic injectable pharmaceutical products. We ~~believe~~believed that expanding our development and commercial base beyond topical generics, historically the cornerstone of our expertise, to include injectable generics, ~~complex generics~~ and ~~ophthalmic~~other ~~generics~~high-barrier ~~(what~~dosage weforms ~~call~~would ~~our "TICO strategy"), will~~ leverage our existing expertise and capabilities, and broaden our platform for ~~a more~~ diversified strategic growth. While we experienced some success in that regard, during the last year, as we have experienced the unfavorable impacts of the COVID-19 pandemic on our business, we have begun to reexamine all of our expertise and assets in order to reinvigorate and bolster our business. This has resulted in our placing additional emphasis on the development of our private label business as well as our contract development and manufacturing business.

~~Teligent~~Following ~~was~~five ~~recognized~~approvals byfrom ~~the~~our ~~FDA~~internally asdeveloped ~~one~~pipeline of ~~the~~topical ~~top~~generic 15products ~~generic~~in ~~companies~~2019, tothere ~~receive~~were ~~Abbreviated~~no ~~New~~approvals ~~Drug~~from ~~Application~~our ~~("ANDA")~~internally ~~approvals~~developed inpipeline ~~2018. In~~of ~~2019,~~topical wegeneric ~~submitted~~products ~~one~~in ~~ANDA~~2020. We ~~currently~~continue ~~have~~to 16be ~~ANDAs~~opportunistic ~~submitted~~in ~~singly~~efforts ~~and~~to 2license ~~ANDAs~~or ~~that~~acquire ~~were~~further ~~submitted~~products, ~~with~~intellectual ~~partners~~property, ~~are~~or pending atapplications ~~the~~to ~~FDA~~expand our portfolio. ~~Additionally,~~We weexpect ~~have~~to 2accelerate ~~ANDs~~our ~~pending~~growth ~~before~~through ~~Canada's~~the ~~food~~creation ~~and~~of ~~drug~~unique ~~regulatory~~opportunities ~~authority. We~~based ~~have~~on anthe acquisition of additional 45intellectual ~~product~~property ~~candidates~~and/or atthe ~~various~~expansion ~~stages~~of the use of our ~~development~~existing ~~pipeline~~intellectual property. We are also exploring the options to monetize certain of our non-core assets.

WeBased ~~expect~~on toIQVIA ~~continue~~(NYSE: toIQV) ~~expand~~data, ~~our presence in~~ the ~~generic~~addressable ~~topical pharmaceutical~~ market ~~through~~for the ~~filing~~seven ofANDA ~~additional~~topical ~~ANDAs~~filings and ~~the~~three ~~subsequent~~NDAs ~~launch~~that ofwe ~~products~~have aspending ~~these~~with ~~applications are approved. We received five approvals from our internally developed pipeline of topical generic products in 2019. We intend to continue to submit further ANDAs to~~ the FDA ~~and~~is ~~abbreviated~~estimated ~~new drug submissions ("ANDS")~~ to ~~Health~~total ~~Canada~~over in$140 ~~2020,~~million ~~although~~per ~~the typical timelines for submission and approval may be adversely impacted by the current COVID-19 pandemic~~annum. We ~~continue~~expect to ~~seek~~continue to ~~license or acquire further products, intellectual property, or pending applications to~~ expand our ~~portfolio.~~presence Wein ~~expect~~the togeneric ~~accelerate~~topical ~~our~~and ~~growth~~generic ~~through~~injectable ~~the~~pharmaceutical ~~creation~~markets ofthrough ~~unique opportunities from~~ the ~~acquisition~~submission of additional ~~intellectual~~ANDAs ~~property~~to ~~and/or~~ the ~~expansion~~FDA ofand the ~~use~~subsequent launch of ~~our~~products ~~existing~~if ~~intellectual~~and ~~property.~~when Wethese applications are ~~also~~approved ~~exploring~~by the ~~options to monetize certain of our non-core assets~~FDA.

Facility Expansion. We completed the first phase of our facility expansion in July 2016, with the complete interior renovation of our building at 101 Lincoln Avenue in Buena, New Jersey. This building now houses our new product development laboratory for work on topical and sterile pharmaceuticals. This laboratory integrates our formulation and analytical chemistry teams into one lab. This building renovation also houses our regulatory affairs, supply chain and corporate service teams.

3We continued with the significant expansion and utilities upgrade of our manufacturing facility at 105 Lincoln Avenue in Buena, New Jersey. In October 2018, we received the Certificate of Occupancy to begin using our manufacturing facility, which includes a state-of-the-art quality control and microbiology lab for the testing of our pharmaceutical products. The expanded facility has increased our manufacturing capability for topical products and, upon FDA approval, will also enable the production of sterile injectable products in both vial and ampule presentations. We have utilized this facility expansion as an opportunity to upgrade and improve the degree of automation and capacity in our existing topical production suite. The sterile production area is designed around isolator-based technology. The facility includes a versatile vial and ampule filling line capable of between four and eight million units per year, with space and critical utilities included in the build-out for a potential future higher-speed filling line. Through December 31, 2020 the Company has incurred approximately $91.5 million for this project and is currently substantially complete with construction. We will use the new sterile production capability to support our internal R&D pipeline of sterile injectable products in vial and ampule presentations. These upgrades and expansion secure our long-term growth in manufacturing and marketing topical and injectable pharmaceutical products for sale in the U.S. and to expand our private label and contract manufacturing service opportunities.

WeTeligent ~~continued~~Canada ~~with the significant expansion~~ and ~~utilities~~Teligent ~~upgrade of our manufacturing facility at 105 Lincoln Avenue in Buena, New Jersey~~OÜ. In ~~October~~late ~~2018,~~2015 wein ~~received~~connection with the ~~Certificate~~completion of ~~Occupancy~~certain ~~to begin using our manufacturing facility~~acquisitions, ~~which~~we ~~includes~~formed athree ~~state-of-the-art~~subsidiaries: ~~quality~~Teligent ~~control~~Luxembourg ~~and microbiology lab for the testing of our pharmaceutical products~~S.à.r.l. ~~The expanded facility has increased our manufacturing capability for topical products and~~(“LuxCo”), ~~upon~~a ~~FDA~~private ~~approval,~~limited ~~will~~company ~~also~~incorporated ~~enable~~under the ~~production~~laws of ~~sterile injectable products in both vial and ampule presentations. We have utilized this facility expansion as an opportunity to upgrade and improve~~ the ~~degree~~Grand Duchy of ~~automation~~Luxembourg and ~~capacity in our existing topical production suite. The sterile production area is designed around isolator~~wholly-~~based~~owned ~~technology.~~by ~~The~~us, ~~facility~~as ~~includes~~well aas ~~versatile~~Teligent ~~vial~~Canada ~~and ampule filling line capable of between four and eight million units per year~~Inc., ~~with space and critical utilities included in the build-out for~~ a ~~potential~~company ~~future~~incorporated ~~higher-speed~~under ~~filling line. Through December 31, 2019~~ the ~~Company~~laws ~~has~~of ~~incurred approximately $88.3 million for this project and is currently substantially complete with construction. We have been partnering with contract manufacturing organizations, or CMOs, for~~ the ~~development,~~Province ~~registration and manufacture~~ of ~~some~~British ofColumbia ~~our sterile injectable~~ and ~~ophthalmic~~Teligent ~~products.~~OÜ, ~~Upon~~a ~~successful~~private ~~FDA~~limited ~~inspection,~~company weincorporated ~~may~~under ~~transfer~~ the ~~manufacture~~laws of ~~some of these injectable products to this facility. We will also use~~ the ~~new~~Republic ~~sterile~~of ~~production~~Estonia, ~~capability~~each ~~to support our internal R&D pipeline~~ of ~~sterile~~which ~~injectable~~are ~~products in vial and ampule presentations. The expansion was implemented in order to secure Teligent's long~~wholly-~~term~~owned ~~growth~~by ~~in manufacturing and marketing injectable Pharmaceutical products for sale in the U~~LuxCo.S.

Teligent Canada. Oncurrently ~~November~~has ~~13,~~11 ~~2015,~~employees welocated ~~acquired~~in ~~all~~our ofoffices ~~the rights, title and interest~~ in ~~the development~~Mississauga, ~~production~~Canada, ~~marketing,~~and ~~import~~currently markets and ~~distribution~~distributes ofover ~~all~~31 products. ofIn ~~Alveda~~October ~~Pharmaceuticals Inc.~~2020, orafter ~~Alveda,~~shifting ~~pursuant~~our toresearch ~~two~~and ~~asset~~development ~~purchase~~activities ~~agreements, one relating~~ to ~~the~~our ~~acquisition~~Buena, ofNew ~~all~~Jersey offacility, ~~the~~we ~~intellectual~~sold ~~property-related~~our Estonian assets ~~of Alveda~~ and ~~the~~are ~~other~~in ~~relating to~~ the ~~acquisition~~process of ~~all~~winding ~~other~~down ~~assets~~Teligent ~~of Alveda~~OÜ.

In connection with the completion of the acquisition, we formed three subsidiaries: Teligent Luxembourg S.à.r.l., or LuxCo, a private limited company incorporated under the laws of the Grand Duchy of Luxembourg and wholly-owned by the Company; Teligent OÜ, a private limited company incorporated under the laws of the Republic of Estonia that is wholly-owned by LuxCo; and Teligent Canada Inc., a company incorporated under the laws of the Province of British Columbia that is wholly-owned by LuxCo.

Teligent Canada currently has 14 employees located in our offices in Mississauga, Canada. Teligent Canada acquired all of the Alveda working capital, including accounts receivable, inventory, accounts payable, and capital assets. In addition, Teligent Canada acquired Alveda’s existing customer relationships, all contracts necessary to execute the Canadian distribution activities, operational permits, and all intellectual property required to operate the marketing and distribution of products in Canada. Teligent Canada also transitioned a majority of the existing workforce as part of the acquisition. Teligent Canada currently markets and distributes over 32 products. Teligent continues to transition these products to distribute them under a Teligent Canada label.

Teligent OÜ. Teligent OÜ currently has 15 employees. Teligent OÜ is responsible for the development, enhancement, maintenance, protection and exploitation functions related to the intellectual property-related assets acquired from Alveda. In addition, Teligent OÜ is responsible for the management of the supply chain function and procurement of products for sale to Teligent Canada in addition to certain products and active pharmaceutical ingredients ("API's") for Teligent Pharma, Inc. in the U.S. We built and developed a laboratory to support analytical chemistry, quality control, and formulation development to support our Teligent US and Teligent Canada supply chain management and technical services teams.

Our Generic Pharmaceutical Business

In September 2010, we leveraged our existing formulation and manufacturing capabilities to begin ~~the~~our ~~Company’s~~ transformation from being solely a contract ~~manufacturing~~development and ~~development~~manufacturing company into a generic pharmaceutical company with our own portfolio of products, as recognized by our first ANDA submission to the FDA in 2014. ANDAs are submitted to the FDA for generic prescription drug products that have the same active ingredient, strength, dosage form, and route of administration as brand name innovator drug products to which they are bioequivalent, meaning that there is no significant difference between the drugs in their rate and extent of absorption in the body. In the United States, approved ANDA generic drugs are usually interchangeable with the innovator drug. This means that the generic version may generally be substituted for the branded product by either a physician or pharmacist when dispensing a prescription. Our commercialization of each of these product candidates requires approval of the respective ANDA by the FDA.

~~Based~~Our onContract ~~IQVIA~~Development data, the addressable market for the 16 ANDA filings that Teligent has pending with the FDA totals approximately $1.06 billion per annum. We expect to continue to expand our presence in the generic topical pharmaceutical market through the submission of additional ANDAs to the FDA and ~~the~~Manufacturing subsequent launch of products if and when these applications are approved by the FDA. Additionally, we plan to file further ANDSs with Health Canada in 2020 to the extent the COVID-19 pandemic allows for the submission of new drug applications. We also have 45 additional product candidates in various stages of development.Business

As part of our growth strategy, we also seek opportunities to acquire additional products and ANDAs or ANDSs. On February 1, 2013, we acquired assets and intellectual property, including an approved ANDA, for econazole nitrate cream 1%, which we launched under our label in September 2013. On September 24, 2014, we acquired from AstraZeneca previously approved ANDAs and NDAs associated with 18 products, 17 of which are injectable products and one non-injectable product for pain management. On September 30, 2014, we acquired previously marketed and approved ANDAs associated with two ophthalmic products from Valeant Pharmaceuticals LLC and Valeant Pharmaceuticals Luxembourg SARL, or Valeant, in addition to the exclusive right to acquire three additional previously marketed and approved injectable products from Valeant. In November 2014, we completed the purchase of one of those three optioned injectable products and its related NDA from Valeant. In March 2015, we completed the purchase of the final two optioned injectable products and their related NDAs from Valeant.

On November 13, 2015, we formed Teligent Canada, and completed the acquisition of Alveda. Teligent Canada had ten employees, including a general manager located in our offices in Mississauga, Canada. Teligent Canada acquired all of the Alveda working capital, including accounts receivable, inventory, accounts payable, and capital assets. In addition, Teligent Canada acquired Alveda’s existing customer relations, all contracts necessary to execute the Canadian distribution activities, operational permits, and all intellectual property required to operate the marketing and distribution of Alveda’s products in Canada. Teligent Canada also transitioned a majority of the existing workforce as part of the acquisition. Teligent Canada currently markets and distributes 32 injectable products.

Our Contract Manufacturing and Development Business

We develop, manufacture, fill and package topical semi-solid and liquid products for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis and eczema.

We believe that our quality contract manufacturing and development business provides a consistent and reliable source of products and services to our customers. We offer flexibility in batch sizing and package design, which gives our customers the opportunity to select the appropriate presentation for each product. Our ~~high-speed~~ packaging lines can accommodate a variety of tubes, bottles, pumps and jars. AsOur arecent ~~result~~upgrades ofand ~~the~~expansion ~~rollout~~secure of our ~~TICO~~long-term ~~strategy~~growth prospects in manufacturing and ~~the~~marketing ~~increased~~topical ~~focus~~and injectable Pharmaceutical products for sale in the U.S. and ~~commitment~~to ofexpand ~~R&D~~our private label and ~~technical~~contract ~~resources~~manufacturing ~~toward~~service ~~internal~~opportunities. ~~projects,~~We ~~revenue~~presently ~~from~~anticipate continuing our ~~contract~~efforts ~~services~~to grow this business ~~may~~through ~~decrease~~the ~~over~~addition ~~time~~of new customers and products.

Recent Developments

Liquidity Issues

We have recently experienced significant liquidity issues and have engaged in a series of equitization and refinancing transactions. However, as discussed further below, we continue to experience significant financial and operating challenges that present substantial doubt as to our ability to continue as a going concern. As of the date of this Form 10-K filing, following the completion of our at-the-market common stock offering on April 30, 2021 we have approximately $25.2 million in cash and cash equivalents. We expect to continue to explore and pursue other strategic cash raising options.

January 2021 Debt Exchange Transactions

On January 27, 2021, we completed a recapitalization and equitization transaction pursuant to an Exchange Agreement, dated January 27, 2021, among the Company, the Series C Noteholders (as defined below) and Ares (as defined below) (the “Exchange Agreement”). Under the Exchange Agreement, the holders (the “Series C Noteholders”) of all of our 9.5% Series C Senior Secured Convertible Notes due 2023 (the “Series C Notes”) exchanged an aggregate of approximately $50.3 million of outstanding principal under the Series C Notes, representing 100% of the outstanding principal under the Series C Notes, together with accrued interest thereon, for an aggregate of 29,862,641 shares (the “Series C Exchange Shares”) of our common stock (the “Series C Equitization”). The Series C Equitization resulted in the extinguishment of all of our obligations under the Indenture, dated as of July 20, 2020, between us and Wilmington Trust, National Association, as trustee and collateral agent (the “Series C Indenture”).

Additionally, under the Exchange Agreement, certain credit funds and accounts managed by affiliates of Ares Management Corporation (such funds and accounts, collectively, “Ares” and, together with the Series C Noteholders, the “Participating Parties”) that are lenders under our Second Lien Credit Agreement, dated December 13, 2018, by and among the Company, certain of its subsidiaries, the lenders from time to time party thereto, and Ares Capital Corporation as Administrative Agent (as amended, including by the Second Lien Amendment (as defined below), the “Second Lien Credit Agreement”) converted a portion of the outstanding term loans under the Second Lien Credit Agreement constituting 100% of the approximately $24.5 million in accrued PIK interest under the Second Lien Credit Agreement into an aggregate of

approximately 85,412 shares of our newly created Series D Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”, and such transaction, the “PIK Interest Exchange” and, together with the Series C Equitization, the “January 2021 Debt Exchange Transactions”). Each share of Series D Preferred Stock is non-voting and, subject to an increase in the number of shares of our common stock available for issuance under our amended and restated certificate of incorporation, is convertible into 200 shares of our common stock. The shares of Series D Preferred Stock issued in connection with the PIK Interest Exchange are currently convertible into an aggregate of 17,082,285 shares of our common stock. The holders of shares of Series D Preferred Stock may not convert such shares of Series D Preferred Stock into shares of our common stock to the extent such a conversion would result in a holder thereof, together with its affiliates, collectively owning more than 15% of the number of shares of our common stock then outstanding.

The January 2021 Debt Exchange Transactions reduced the amount of indebtedness on our balance sheet from approximately $186.3 million to approximately $109.7 million. After giving effect to the January 2021 Debt Exchange Transactions and prior exchange transactions in which we extinguished all outstanding 4.75% Convertible Senior Notes due May 2023 (the "Series A Notes") and all outstanding 7.0% Cash / 8.0% PIK Series B Senior Unsecured Convertible Notes due 2023 (the "Series B Notes"), our remaining indebtedness. as of January 27, 2021, consisted of:

•$105.0 million in outstanding borrowings under the Senior Credit Agreements; and

•$1.3 million outstanding principal amount of our Zero Coupon Convertible Senior Notes due 2023 (the “Series D Notes”) (described further below).

Our current amended and restated certificate of incorporation authorizes 100,000,000 shares of common stock for issuance. As of the date of this Form 10-K filing, we have 92,817,493 shares of common stock issued and outstanding. In addition, after giving effect to the January 2021 Debt Exchange Transactions, there are approximately 85,412 shares of Series D Preferred Stock outstanding, which are convertible into, in the aggregate, 17,082,285 shares of our common stock as of the date of this 10-K filing. As a result, there are presently an insufficient number of shares authorized and available for issuance under our amended and restated certificate of incorporation to effect the conversion of all outstanding shares of Series D Preferred Stock into common stock pursuant to the terms of such Series D Preferred Stock. Pursuant to the terms of the Exchange Agreement, we are required to seek the requisite approval of our stockholders to an amendment to our amended and restated certificate of incorporation to allow for the conversion in full of all shares of Series D Preferred Stock into shares of our common stock (either by an increase in the number of authorized shares of our common stock, the effectuation of a reverse stock split, or otherwise) (the “Stockholder Approval”). The Exchange Agreement provides that, if we are unable to obtain the Stockholder Approval on or before July 1, 2021, we will issue to each holder of Series D Preferred Stock, on a quarterly basis, additional shares of Series D Preferred Stock equal to 2.5% of the number of shares of Series D Preferred Stock originally issued to such holder until the Stockholder Approval is obtained (with a prorated amount of Series D Preferred Stock to be issued in the event the Stockholder Approval is obtained during any such calendar quarter). We intend to seek Stockholder Approval at our Annual Meeting of Stockholders scheduled to be held on May 26, 2021.

As a condition to entering into the Exchange Agreement, we entered into a Stockholders’ Agreement with the Participating Parties and B. Riley Securities (the “Stockholders’ Agreement”), pursuant to which, among other matters, the Company granted (i) the Participating Parties registration rights for the shares of our common stock issuable upon conversion of the Series D Preferred Stock and for the Series C Exchange Shares, and (ii) B. Riley Securities registration rights for the shares of common stock issued to B. Riley Securities as a commitment fee in connection with an At Market Issuance Sales Agreement (the “ATM Sales Agreement”), dated January 27, 2021, with B. Riley Securities, pursuant to which we conducted an at-the-market equity offering (the “ATM Offering”). In addition to the voting restrictions discussed further below, the Stockholders’ Agreement also contains terms restricting the transfer of shares of our common stock and Series D Preferred Stock held by the Participating Parties, including, subject to certain exceptions, a restriction on all sales or other transfers or dispositions of such shares (i) in respect of our recently completed at-the-market common stock offering, (ii) in any period during which we are conducting a follow-on public offering of our common stock within 11 months after the ATM Offering and ending on the earlier of 60 days after commencement of such offering or five trading days following its completion, (iii) in violation of certain volume restrictions set forth in the Stockholders’ Agreement (including the Rule 144 Volume Limitation (as defined in the Stockholders’ Agreement)) at any time when such Participating Party holds at least 9.9% of the outstanding shares of our common stock (including shares issuable upon conversion of the Series D Preferred Stock) and (iv) to any person or entity that is required to file a statement on Schedule 13D or Schedule 13G with respect to our securities. The Stockholders’ Agreement also (x) subjects each Participating Party to certain standstill provisions for a period of 18 months following the date of the Stockholders’ Agreement, (y) requires each Participating Party to include, in any Schedule 13D or Schedule 13G that such Participating Party may be required to file in respect of our securities, an acknowledgment that such Participating Party has no intent to directly or indirectly control us or to take any actions contemplated by Section 5 of the Stockholders’ Agreement and (z) provides that the rights of each of Nantahala

Capital Management, LLC (“Nantahala”) and Silverback Asset Management, LLC, two of our Series C Noteholders, to appoint a non-voting observer to our board of directors terminated upon the consummation of the Series C Exchange.

The Stockholders’ Agreement also contains certain voting restrictions as follows: (a) each Series C Noteholder and each of such Series C Noteholder’s affiliates will not vote any shares of our common stock held by such Series C Noteholder or such affiliates to the extent such vote would result in such Series C Noteholder and such affiliates, collectively, voting in excess of 4.9% of the outstanding shares of our common stock as of the record date for such vote, and (b) Ares will not vote any shares of our common stock held by it to the extent such vote would result in Ares and its affiliates, collectively, voting in excess of 15% of the outstanding shares of our common stock as of the record date for such vote. In addition, pursuant to Voting Trust Agreements among Wilmington Savings Fund Society, FSB (“WSFS Bank”), us and each of Nantahala and Silverback (the “Voting Trust Agreements”), we and each of Nantahala and Silverback established voting trusts with WSFS Bank to hold all Series C Exchange Shares issued to Nantahala or Silverback, respectively, in excess of 4.9% of the outstanding shares of our common stock, and WSFS Bank has agreed to vote all such Series C Exchange Shares on all matters presented to the vote of our stockholders in the same proportions as all shares of our common stock other than (x) the Series C Exchange Shares held in trust by WSFS Bank; (y) any other shares of our common stock held by Nantahala or Silverback, as applicable and (z) other shares of our common stock held by the other Participating Parties.

Amendments to First Lien Credit Agreement and Second Lien Credit Agreement

Also in connection with the January 2021 Debt Exchange Transactions, we entered into (i) Amendment No. 4 to First Lien Revolving Credit Agreement (the “First Lien Amendment”), amending the First Lien Credit Agreement, dated December 13, 2018, by and among the Company, certain of its subsidiaries, the lenders from time to time party thereto, and ACF Finco I LP as Administrative Agent (as amended by the First Lien Amendment, the “First Lien Credit Agreement”), and (ii) Amendment No. 6 to Second Lien Credit Agreement (the “Second Lien Amendment”), pursuant to which all identified defaults and events of default thereunder were waived and certain amendments were made to the First Lien Credit Agreement and Second Lien Credit Agreement, respectively, including those described below. The First Lien Credit Agreement and Second Lien Credit Agreement are referred to herein as the “Senior Credit Agreements,”, and such indebtedness outstanding under the Senior Credit Agreements is referred to herein as the “Senior Credit Facilities”.

The First Lien Amendment amended the First Lien Credit Agreement to, among other things, (i) permit borrowings under the revolving credit facility under the First Lien Credit Agreement, subject to availability (which is $0 as of the date of this Form 10-K filing) and the other terms and conditions of the First Lien Credit Agreement, provided, that such borrowings are only available until the commitments of the lenders under the Second Lien Credit Agreement under the Second Lien Delayed Draw Term Loan C Facility (as defined below) have been reduced to $0, (ii) reduce from $10.0 million to $3.0 million (from and after the first draw of the Second Lien Delayed Drawn Term Loan C Facility described below) the maximum amount of cash that we and our subsidiaries that are credit parties under the First Lien Credit Agreement are permitted to maintain prior to triggering a mandatory prepayment of the revolving credit facility (without a permanent reduction of the revolving credit commitments), which $3.0 million threshold automatically increased by the net proceeds received from the January 28, 2021 ATM Offering and any other equity offering, (iii) reduce from $3.0 million to $1.0 million the minimum liquidity (as defined in the First Lien Credit Agreement) required to be maintained by us and our subsidiaries that are credit parties under the First Lien Credit Agreement on a consolidated basis until the earlier of (a) the date on which the net proceeds from the January 28, 2021 offering exceed $15.0 million in the aggregate and (b) February 15, 2021, at which time the liquidity covenant increases to $3.0 million on a consolidated basis, (iv) from and after March 31, 2022, further increase the minimum liquidity covenant from $3.0 million to $4.0 million on a consolidated basis and (v) suspend testing of the minimum consolidated adjusted EBITDA covenant until March 31, 2022, at which time such minimum consolidated adjusted EBITDA covenant levels will resume to the levels in effect prior to the closing of the First Lien Amendment.

The Second Lien Amendment amended the Second Lien Credit Agreement to (i) permit, among other things, the January 2021 Debt Exchange Transactions, (ii) provide for a new multiple-draw delayed draw term loan facility in the aggregate principal amount of up to $4.6 million (the “Second Lien Delayed Draw Term Loan C Facility”) which will be made available to us until December 31, 2021, subject to satisfaction of the conditions to borrowing, including, following the launch of this offering, a pro forma maximum liquidity test of $4.0 million, the proceeds of which may be used to pay expenses specified in a budget approved by the administrative agent under the Second Lien Credit Agreement, (iii) reduce from $3.0 million to $1.0 million the minimum liquidity (as defined in the Second Lien Credit Agreement) required to be maintained by us and our subsidiaries that are credit parties under the Second Lien Credit Agreement on a consolidated basis until the earlier of (a) the date on which the net proceeds from the January 28, 2021 offering exceed $15.0 million in the aggregate and (b) February 15, 2021, at which time the minimum liquidity covenant increases to $3.0 million on a consolidated basis, (iv) from and after March 31, 2022, further increase the minimum liquidity covenant to $4.0 million on

a consolidated basis, (v) suspend testing of the minimum consolidated adjusted EBITDA covenant until March 31, 2022, at which time such minimum consolidated adjusted EBITDA covenant levels will resume to the levels in effect prior to the closing of the Second Lien Amendment and (vi) extend the date on which we may elect to pay interest in kind. Loans made under the Second Lien Delayed Draw Term Loan C Facility will be pari passu with, and have the same interest and payment terms (including maturity) as those applicable to, the existing loans under the Second Lien Credit Agreement.

Liquidity and Capital Resources; Going Concern

We have incurred significant losses and generated negative cash flows from operations in recent years, and we expect to continue to incur losses and generate negative cash flows from operations for the foreseeable future. We are not currently generating revenues from operations that are sufficient to cover our operating expenses, and our available capital resources are not sufficient for us to continue to meet our obligations as they become due, presenting substantial doubt as to our ability to continue as a going concern. Our cash and cash equivalents at December 31, 2020 were approximately $6.7 million, compared to approximately $16.2 million at December 31, 2019. We have engaged business, financial and legal advisors to assist us in, among other matters, further analyzing all available strategic alternatives to address our liquidity and capital structure.

As of the date of this Form 10-K filing, our cash and cash equivalents are approximately $25.2 million. In the absence of additional liquidity, we anticipate that existing cash resources, after giving effect to $4.6 million in interim funding under the Second Lien Credit Agreement, would be depleted by the end of March 2022. To remain viable, we estimate that we will require no less than approximately $20.0 million of additional liquidity to fund our cash requirements until December 31, 2022 (assuming, among other matters, the completion of the inspections under the FDA Warning Letter (described further below) and a reduction in the impact on our operations and financial results from the COVID-19 pandemic), although this estimate is subject to a number of assumptions and may vary materially.

We have been and are actively pursuing potential sources of additional liquidity, including:

•Equity Financing. We completed the at-the-market offering on March 31, 2021 with aggregate gross proceeds of $38,712,036 from the sale of shares of our common stock at an average price of $0.993 per share.

•Debt Financing. As discussed in “January 2021 Debt Exchange Transactions” above, we have undertaken several deleveraging transactions to reduce our indebtedness and our related costs of capital. Additionally, we have worked with our lenders under the Senior Credit Facilities to obtain short-term financing to meet our immediate liquidity needs, including $4.6 million in interim funding under the Second Lien Credit Agreement. At the commencement of the ATM offering, we and Ares agreed to amendments of the Senior Credit Agreements to provide for an extension of relief from certain financial covenants (including, among others, our minimum liquidity covenant through March 31, 2022). There can be no assurances that our senior lenders will continue to provide interim financing or other relief from the covenants contained in our Senior Credit Agreements, from which we may need one or more additional waivers based on our currently expected results. In the event such waivers are not extended and we violate one or more of certain specified covenants in our Senior Credit Agreements, such violation may lead to one or more events of default under the Senior Credit Agreements, which may trigger certain cross-default provisions under the terms of any other indebtedness then in effect. We continue to engage with our business, financial and legal advisors to further analyze and explore new potential transactions to refinance or restructure our remaining outstanding debt.

•Strategic Alternatives. We have engaged in discussions with a number of counterparties and remain opportunistic with respect to potential transactions for certain of our strategic assets. We expect to continue to engage in such explorations as we and our board of directors determine are appropriate; however, there can be no assurance that we will be able to complete any such potential transaction on terms that are acceptable to us, if at all.

It is very difficult to estimate our liquidity requirements, future cash burn rates and future operating results, and any such estimates may vary significantly. Further, it is very difficult to determine when our operating environment will change to allow us to return to more normalized operations, including in respect of the effects of the COVID-19 pandemic. By way of example, the COVID-19 pandemic has resulted in a significant decrease in elective visits to dermatologists in the United States, which has led to a reduction in the volume of prescriptions written for topical products customarily supplied by us, which has negatively impacted our revenue. Further, the FDA Warning Letter (discussed further below) has prevented us from launching our new sterile injectable product line to be produced at our new facility, and due to regulatory and inventory production requirements, as well as certain issues of non-conformance with respect to certain products identified during our review undertaken in connection with the FDA Warning Letter (including, among other matters, product recalls,

long-term production pauses, short-term clear path to market production pauses, and continued production with minor process correction), we anticipate continuing to experience a significant delay in the launch of such product line even after the restrictions imposed by the FDA Warning Letter are rescinded (if such restrictions are rescinded at all). We also continue to experience significant pressures on our liquidity related to remediation efforts arising in respect of the FDA Warning Letter. While we believe we have made substantial progress in remediating the issues identified in the FDA Warning Letter and in subsequent internal reviews, the FDA has significantly reduced its on-site inspections during the COVID-19 pandemic. As a result, there can be no assurances as to when the FDA will re-inspect our Buena, NJ facility and whether (and to what extent) the FDA will agree to remove the restrictions imposed by the FDA Warning Letter following such re-inspection.

As such, there is substantial doubt that any of these potential sources of liquidity will be realized or that, if realized, they will generate sufficient liquidity required by us until we are able to achieve more normalized operating results. Further, given the substantial doubts of our ability to proceed as a going concern and the significant operational challenges we face in the near- and long-term, there can be no assurances that any or all of these potential sources of liquidity will be available to us on commercially acceptable terms, if at all.

FDA Warning Letter

As part of our efforts to remediate the issues identified in the FDA’s warning letter issued in November 2019 (the “FDA Warning Letter”) and to strengthen our quality systems, we undertook a comprehensive review of all of our products. This review was completed in December 2020. While the review did not identify material issues with many of our products, it identified certain issues of non-conformance with respect to certain products which have resulted in recalls and halting the production of certain products, that we are actively reviewing and remediating. We have experienced and may continue to experience, among other matters, product recalls, long-term production pauses, short-term clear path to market production pauses, and continued production with minor process corrections. We believe the foregoing disruptions with respect to certain of our products and the diversion of resources to remediate the product quality issues will have a negative impact on our business, financial position, results of operations and cash flows during 2021, including reducing our revenue, negatively impacting operating/(loss), and possibly resulting in impairment and other charges. Further, we anticipate that the FDA’s issuance of the warning letter and review of our processes will continue to delay the FDA’s pre-approval inspection for commercial production on the newly installed injectable line at the Buena, NJ facility. The continued failure to address the issues identified by the FDA in its warning letter and those subsequently identified by us in our comprehensive product quality review as well as the continued delay in obtaining the FDA’s pre-approval inspection for commercial production on the newly installed injectable line at the Buena, NJ facility will have a negative impact on our business, financial position, results of operations and cash flows.

COVID-19 Response

As a pharmaceutical manufacturing facility, we are considered “essential” under applicable directives from the state of New Jersey. We have and anticipate continuing to remain open as long as permitted and conditions remain safe for our employees. Among other preventative measures, we have directed all employees that could perform their function remotely to work from home in accordance with applicable guidelines, implemented social distancing measures on-site at our manufacturing facility, provided daily personal protective equipment to our onsite employees upon their arrival to the site and implemented temperature monitoring services at our newly established single point of entrance. We have also implemented a more frequent sanitization process of the facility.

In order to preserve cash and align manufacturing-related resources with downward adjustments made to our production schedule, we initiated a reduction in force at our Buena, NJ manufacturing facility effective June 19, 2020. In connection with the reduction, we terminated 53 employees, furloughed another 15 employees and eliminated the 2nd shift packaging operation. Our employee base after these actions, coupled with our Company-wide effort to reduce recruitment initiated earlier in the year, is down 31% from January 1, 2020.

In addition, we decided to shift our research and development operation being performed in our Tallinn, Estonia office to our US manufacturing site at Buena, New Jersey and subsequently to wind-down our Estonia operation. On September 30, 2020, we sold certain of our assets located in Estonia, primarily lab machinery, equipment and office furniture, for a sales price of $125,000 in cash to an entity led by our former Chief Executive Officer.

Termination of S-3 Eligibility

We failed to timely file our Quarterly Report on Form 10-Q for the three months ended September 30, 2020 (the “Third Quarter 10-Q”). We are filing our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), such filing will serve as an update of our current registration statement on Form S-3 (File No. 333-224188) (the “Current Form S-3”) for purposes of Section 10(a)(3) of the Securities Act and Rule 401(b) promulgated under the Securities Act. Because of our failure to timely file the Third Quarter 10-Q, we will not be eligible to use Form S-3, including our Current Form S-3, after we file our 2020 Form 10-K. At such time, if we have not already done so, we will be required to cease the at-the-market offering contemplated by the January 28, 2021 prospectus supplement and accompanying prospectus at the time this 2020 Form 10-K is filed (to the extent such at-the-market offering has not already been terminated) and in no event later than March 31, 2021 and, as a result, are not currently eligible to file a Registration Statement on Form S-3. This may make is more difficult for us to conduct public offering of our securities.

Our Competitive Strategy

We develop and market a diversified product portfolio focused on ~~alternative~~high-barrier dosage ~~forms~~form generic pharmaceutical products. Our goal is to become a leader in the ~~specialty~~ generic pharmaceutical market. Under our own label, we currently market and sell generic topical, ~~and~~ branded generic and generic injectable, and generic ophthalmic pharmaceutical products in the United States and Canada. In the United States, we are currently marketing 37 generic topical pharmaceutical products and two branded generic injectable pharmaceutical products. In Canada, we market 25 generic injectable, three generic topical, and three generic ophthalmic products. Generic pharmaceutical products are bioequivalent to their brand name counterparts. We also provide contract manufacturing services to the pharmaceutical, over-the-counter, ("OTC"), and cosmetic markets. We have been in the contract manufacturing and development of topical products business since the early 1990s, but our strategy since 2010 has been focused on the growth of our own generic prescription pharmaceutical business. In 2014, we started the transformation of our business from working toward being a leader in the topical generic pharmaceutical industry to becoming a leader in ~~the~~high-barrier ~~specialty~~generic pharmaceutical markets. We believe that expanding our development and commercial base beyond topical generics, tohistorically ~~injectable~~the ~~generics,~~cornerstone ~~complex~~of ~~generics~~our ~~and~~expertise, ~~ophthalmic~~to ~~generics~~include ~~(what~~injectable wegenerics ~~call~~and ~~our~~other ~~TICO~~high-barrier ~~strategy),~~dosage forms will leverage our existing expertise and capabilities, ~~diversify our commercial opportunities~~ and broaden our platform for ~~long-term~~diversified strategic growth. Additionally, while we have experienced some success in that regard, during the last year, as we have experienced the unfavorable impacts of the COVID-19 pandemic on our business, we have begun to reexamine all of our expertise and assets in order to reinvigorate and bolster our business. This has resulted in our placing additional emphasis on the development of our private label business as well as our contract development and manufacturing business.

Our ~~TICO~~ Strategy

Our ~~TICO~~ strategy originated from the opportunity to leverage our value chain, which we have developed and strengthened through our topical portfolio. Our value chain includes our internal expertise in product and molecule selection and development, manufacturing, sales, logistics and distribution, as well as our relationships with our customers and consumers. With the expansion of our existing manufacturing facility, we see the potential to effectively leverage our existing infrastructure across this value chain and to further expand our strategic reach beyond topical generics to ~~the~~include injectable, ~~complex~~generics and ~~ophthalmic~~other ~~generic~~high-barrier ~~pharmaceutical~~dosage ~~markets~~forms.

~~Topical (T) -~~ Our focus on the topical market has been the foundation for our growth. While we have manufactured topical products since the early 1990s, we began to focus our strategy on the topical generic prescription market in 2010. In December 2012, we launched our first generic topical pharmaceutical products under our own label. Currently, we market 3837 generic topical products in the United States under our own label. We have received FDA approvals for 3836 topical generic products from our internally developed pipeline. In our topical pipeline, we have seven ANDAs submitted to the FDA that are awaiting approval. We are targeting to develop and file further regulatory submissions with the FDA in 2022 Upon regulatory approval, we would market these products under the Teligent label to national chain drug stores, drug wholesalers, mail order pharmacies, retail pharmacies and the government through our internal sales efforts.

5In our topical contract development and manufacturing services business, we have developed strong customer relationships that we believe provide us with both recurring revenue streams from those customers and opportunities to selectively increase our product offerings to our customers. We intend to continue to capitalize on our strong customer relationships to maintain and grow contract development and manufacturing revenues.

~~our~~We ~~internally developed pipeline. In our topical pipeline, we~~ have 18an ~~ANDAs submitted to the~~ FDA-registered facility that ~~are~~is ~~awaiting~~equipped ~~approval.~~for Wemanufacturing ~~intend~~topical, tosemi-solid ~~continue~~and toliquid ~~develop~~products. ~~topical~~The ~~generic~~design ~~products~~ and ~~utilize~~configuration of our ~~expertise~~manufacturing infacility ~~drug~~provides ~~formulation~~flexibility ~~and~~in ~~manufacture~~manufacturing tobatch ~~expand~~sizes ~~our~~from ~~own~~250 ~~generic~~kg ~~topical~~up ~~prescription~~to ~~drug~~2,400 ~~portfolio~~kg. We ~~are~~intend ~~targeting~~ to ~~develop~~leverage ~~and~~this ~~file~~flexibility ~~further~~and ~~regulatory~~capacity ~~submissions~~to ~~with~~support ~~the~~our ~~FDA~~growth in ~~2020. Upon regulatory approval, we would market these products under~~ the ~~Teligent~~topical ~~label~~prescription ~~to national chain drug stores and drug wholesalers through our internal sales efforts~~markets. We

Incompleted ~~our~~a ~~topical~~significant ~~contract~~expansion ~~services business, we have developed strong customer relationships that we believe provide us with both recurring revenue streams from those customers~~ and ~~opportunities~~utilities toupgrade ~~selectively~~in ~~increase~~this ~~our~~facility ~~product~~which ~~offerings~~increased to our ~~customers. We intend to continue to capitalize on our strong customer relationships to maintain some contract~~ manufacturing ~~and~~capacity ~~development~~for ~~revenues~~topical products.

WeOn ~~have~~November an26, 2019, we received a warning letter from the FDA~~-registered~~ ~~facility~~following ~~that~~an isinspection ~~equipped~~from ~~for~~April ~~manufacturing~~2, ~~topical~~2019 to May 20, ~~semi-solid~~2019 ~~and~~of ~~liquid~~our ~~products~~Buena, New Jersey manufacturing facility (the “FDA Warning Letter”). The ~~design~~FDA ~~and~~Warning ~~configuration~~Letter cited issues regarding out-of-specification test results, our ~~manufacturing~~stability ~~facility~~program, ~~provides~~our ~~flexibility~~complaint inhandling, ~~manufacturing~~and ~~batch~~drug ~~sizes~~product ~~from~~validation ~~250~~issues. kgWe upinvestigated the issues with the assistance of a consultant, responded to 4the FDA in December 2019 and March 2020,~~000~~ kgand submitted a final closeout letter on April 12, 2020. WeOn ~~intend~~August 13, 2020, we received an additional comment letter from the FDA in which the FDA indicated that it had reviewed our responses and deemed them to ~~leverage~~be ~~this~~inadequate ~~flexibility~~as we failed to address and/or ~~capacity~~provide supporting documentation to ~~support~~several ~~our~~of ~~growth~~the concerns raised in the ~~topical~~FDA ~~prescription~~Warning ~~markets~~Letter. We ~~are~~have ~~progressing~~since ~~with~~submitted supplemental response letters to the ~~significant~~FDA ~~expansion~~outlining ~~and~~certain ~~utilities~~additional ~~upgrade~~changes in ~~this~~our ~~facility~~practices, ~~which~~submitting ~~will~~additional ~~increase~~documentation to support previous and ongoing independent assessments, providing updates to our ~~manufacturing~~organizational ~~capacity~~structure, ~~for~~and ~~topical~~providing ~~products~~further detail in regard to ~~accommodate~~ongoing ~~the~~remediation ~~expected~~projects ~~growth~~(including ~~created~~comprehensive byproduct ~~the~~quality ~~eventual~~assessments) ~~commercial~~to ~~launch~~ensure all of ~~generic~~our ~~pharmaceutical~~ products inare ~~our~~safe, ~~pipeline~~effective and compliant. OnAs ~~November~~part ~~26,~~of ~~2019,~~our efforts to remediate the ~~FDA~~issues ~~issued~~identified usin athe FDA Warning Letter ~~following~~and anto ~~inspection~~strengthen our quality systems, we have undertaken and completed a comprehensive review of all of our ~~manufacturing~~products ~~facility~~during atthe ~~105~~fourth ~~Lincoln~~quarter ~~Avenue~~of 2020. While the review did not identify material issues with many of our products, ~~Buena~~it did identify issues of non-conformance with respect to certain products, ~~New~~which ~~Jersey~~has resulted in recalls and halting the production of certain products, that ~~identified~~we ~~several~~are ~~cGMP~~actively ~~violations~~reviewing and remediating. We are continuing to work diligently to remediate all issues cited by the FDA and ~~hope~~those resulting from our comprehensive quality review, have and will continue to ~~close~~have ~~out~~active ~~this~~communications with the FDA regarding our progress and we believe we will be in a position to inform FDA of our inspection readiness by the third quarter of 2021. Since we cannot control the timing of the FDA re-inspection of the facility, we cannot predict the date when FDA will perform the site re-inspection. For additional discussion of the risks related to the FDA Warning Letter, see “Risk Factors—Risks Related to Our Business—Issues identified by the FDA in the ~~coming~~FDA ~~months~~Warning Letter and additional product quality issues identified by us will have a negative impact on our business, financial position, operating results and cash flows and will delay the FDA’s pre-approval inspection of our newly installed injectable line.”

Injectable (I) - As part of the injectable phase of our TICO strategy, on September 24, 2014, we acquired from AstraZeneca previously approved ANDAs and NDAs associated with 18 products, 17 of which are injectable products and one of which is a non-injectable product for pain management. Of the products we acquired, two of the products are currently on the FDA drug shortage list. We have received FDA approval for our first product in this portfolio, Cefotan® (Cefotetan for Injection), which we launched in the first quarter of 2016.

On September 30, 2014, we acquired previously marketed and approved ANDAs associated with two ophthalmic products from Valeant, in addition to the exclusive right to acquire three additional previously marketed and approved injectable products from Valeant. In November 2014, we completed the purchase of the NDA for one of those three optioned injectable products from Valeant. In March 2015, we completed the purchase of the final two NDAs for the optioned injectable products from Valeant.

On October 5, 2015, we acquired three currently marketed injectable pharmaceutical products (Fortaz®, Zinacef ™ and Zantac® Injection) from Concordia Pharmaceuticals Inc., S.à.r.l., Barbados Branch.

We intend to leverage our existing topical value chain as we build our injectable generic portfolio. We have entered into partnerships with contract manufacturing organizations, or CMOs, for the manufacture of some of our products in our portfolio of sterile products. Longer term, we expect to bring much of this production capability in-house.

The facility expansion, which completed construction activities in the fourth quarter of 2018 will also enable the production of sterile injectable products in both vial and ampule presentations. The sterile production area is designed around forward-thinking isolator-based technology. We have a portfolio of sterile injectable products we acquired in 2014, which upon completion of the site expansion, we may transfer the manufacture of some of these products to our Buena, New Jersey facility. We will also use the new sterile production capability to support our internal R&D pipeline of sterile injectable products in vial and ampule presentations.

We plan to continue to pursue business development opportunities to expand our injectable portfolio.

Complex (C) - We began one project as part of the complex portfolio of our TICO strategy. Our partner filed the ANDA in the second quarter of 2017 for a generic version of an oral product that targets an orphan disease and received a complete response letter from the FDA in the third quarter of 2018. The Company responded to the FDA’s complete response letter in 2019, but received a second complete response letter on December 23, 2019. The response to this CRL was submitted on January 21, 2020. We consider our focus on complex products or markets to be broadly defined to include potential complexity in one of the critical areas of our industry value chain. The intent of this opportunity is to provide patients with a lower cost alternative of an approved orphan drug. We will continue to seek opportunities relevant to building our complex portfolio of products.

Ophthalmic (O) - As part of the ophthalmic portfolio of our TICO strategy, on September 30, 2014, we acquired previously marketed and approved ANDAs associated with two ophthalmic products from Valeant. Similar to our injectable portfolio, we are forming partnerships with CMOs for commercial production. We plan to continue to review business development opportunities to expand our ophthalmic portfolio. We are currently working with a contract research organization to develop three generic ophthalmic products.

Our Customers

Generic Pharmaceutical Business. The manufacturing and commercialization of generic ~~specialty~~ pharmaceutical ~~markets~~products is competitive, and there are established manufacturers, suppliers and distributors actively engaged in all phases of our business. We currently manufacture and sell topical generic pharmaceutical products under our own label. ~~In October 2015, we acquired and began to sell our first generic injectable products.~~ We currently market over 3270 products in the US and Canada. As we continue to execute our ~~TICO~~ strategy, we ~~will compete in other markets, including the injectable and ophthalmic generic pharmaceutical markets, and~~ expect to face ~~other~~increasing ~~competitors~~competition.

For the years ended December 31, ~~2019~~2020, and ~~2018~~2019, 4347% and 5441% of our total product sales, net, respectively, were to the three large wholesale drug distributors: AmerisourceBergen Corporation, or ABC; Cardinal Health, Inc., or Cardinal; and McKesson Drug Company, or McKesson. As of December 31, ~~2019~~2020, Cardinal accounted for 2219% of our accounts receivable, ABC accounted for 118% of our accounts receivable, and McKesson accounted for 2548% of our accounts receivable. As of December 31, ~~2018~~2019, Cardinal accounted for 1922% of our accounts receivable, McKesson accounted for 3025% of our accounts receivable, and ABC accounted for approximately 1911% of our accounts receivable.

ABC, Cardinal and McKesson are key distributors of our products, as well as a broad range of health care products for many other companies. None of these distributors is an end user of our products. Generally, if sales to any one of these distributors were to diminish or cease, we believe that the end users of our products would likely find little difficulty obtaining our products either directly from us or from another distributor. However, the loss of one or more of these distributors, together with a delay or inability to secure an alternative distribution source for end users, could have a material adverse effect on our revenue, business, financial condition, results of operations and cash flows. There are generally three major negotiating entities in the US market.: ~~The~~(i) the Walgreens Boots Alliance Development (WBAD), which consists of Walgreens, and AmerisourceBergen’s PRxO Generics program, ~~and~~(ii) ~~Econdisc members.~~ Red Oak Sourcing, which consists of CVS and Cardinal’s source program. ~~Finally,~~and (iii) ClarusOne, which consists of Walmart, RiteAid and McKesson’s OneStop program. A loss of any of these major entities could result in a significant reduction in revenue.

We consider our business relationships with ABC, Cardinal and McKesson to be in good standing and have fee for services contracts with each of them. However, a change in purchasing patterns, a decrease in inventory levels, an increase in returns of our products, delays in purchasing products and delays in payment for products by one or more of these distributors could have a material adverse effect on our revenue, business, financial condition, results of operations and cash flows. We continue to analyze the market for other opportunities to expand our current relationships with other customers, while we continue to seek to diversify our existing portfolio of specialty generic drug products through internal ~~research and development. In addition, we continue to explore business development opportunities to add additional products and /or capabilities to our existing portfolio.~~

~~Contract~~research ~~Manufacturing~~ and ~~Development Business~~development. ~~Our~~In ~~customers~~addition, inwe ~~the~~continue ~~contract~~to ~~manufacturing~~explore business ~~generally~~development ~~consist~~opportunities ofto ~~pharmaceutical~~add ~~companies,~~additional asproducts ~~well as cosmetic~~ and ~~OTC product marketers, who require product development~~/~~manufacturing~~or ~~support.~~capabilities ~~For the year ended December 31, 2019, approximately 54% of our contract services revenue was derived from pharmaceutical customers, as compared~~ to ~~79% of total contract services revenue for the year ended December 31, 2018. None of~~ our ~~contract~~existing ~~manufacturing services customers represented 10% of total revenue for the years ended December 31, 2019 or December 31, 2018~~portfolio.

~~Concentration~~Contract ofDevelopment ~~Risk.~~and InManufacturing ~~2019,~~Business. weOur ~~had sales to two~~ customers ~~which~~in ~~accounted~~the ~~for~~contract ~~more~~manufacturing ~~than~~business ~~10%~~generally ofconsist ~~our total revenue. These customers had sales~~ of ~~$17.6~~pharmaceutical ~~million~~companies, ~~and~~as ~~$9.6~~well ~~million~~as ~~respectively~~cosmetic and ~~represented~~OTC ~~41%~~product ofmarketers, ~~total~~who ~~revenues~~require inproduct ~~aggregate~~development/manufacturing support. ~~Accounts~~For ~~receivable~~the ~~related~~year toended ~~these~~December 31, ~~two~~2020, ~~customers~~approximately ~~represented 31~~49% of ~~total~~our ~~accounts~~contract ~~receivable~~services asrevenue ofwas ~~December 31,~~derived ~~2019.~~from Inpharmaceutical ~~2018~~customers, weas ~~had~~compared ~~sales~~ to ~~three customers which individually accounted for more than 10~~54% of ~~our~~ total ~~revenue.~~contract ~~These~~services ~~customers~~revenue ~~had~~for ~~sales~~the ofyear ~~$21.2~~ended ~~million~~December 31, $72019.3 ~~million~~None ~~and~~of ~~$6.9~~our ~~million,~~contract ~~respectively,~~manufacturing ~~and~~services customers represented 5410% of total ~~revenues~~revenue infor the ~~aggregate.~~years ~~Accounts~~ended ~~receivable related to these major customers represented 30%~~December 31, ~~19%~~2020 ~~and 19%, respectively,~~ or ~~68% of all accounts receivable as of~~ December 31, ~~2018~~2019.

~~Expansion~~Concentration ~~into~~of ~~foreign~~Risk. ~~operations~~In in2020, ~~the~~we ~~fourth~~had ~~quarter~~sales ofto ~~2015~~three ~~has~~customers ~~generated~~which ~~net~~accounted ~~revenues~~for ~~greater~~more than 10% ~~outside~~of our total revenue. These customers had sales of ~~the~~$11.5 ~~United~~million, ~~States~~$5.2 ~~For~~million, ~~the~~and ~~year~~$4.5 ~~ended~~million, respectively and represented 47% of total revenues in aggregate. Accounts receivable related to these three customers represented 75% of total accounts receivable as of December 31, 2020. In 2019, ~~domestic~~we ~~net~~had ~~revenues~~sales ~~were~~to two customers which individually accounted for more than 10% of our total revenue. These customers had sales of $4817.46 million and ~~foreign~~$9.6 ~~net~~million, respectively, and represented 41% of total revenues in the aggregate. Accounts receivable related to these major customers represented 31% of all accounts receivable as of December 31, 2019.

7Expansion into foreign operations in the fourth quarter of 2015 has generated net revenues greater than 10% outside of the United States. For the year ended December 31, 2020, domestic net revenues were $34.5 million and foreign net revenues were $10.8 million. As of December 31, 2020, domestic net assets were $139.9 million and foreign assets were $41.2 million. For the year ended December 31, 2019, domestic net revenues were $48.4 million and foreign net revenues were $17.5 million. As of December 31, 2019, domestic assets were $154.3 million and foreign assets were $52.6 million.

were $17.5 million. As of December 31, 2019, domestic net assets were $154.3 million and foreign assets were $52.6 million. For the year ended December 31, 2018, domestic net revenues were $45.6 million and foreign net revenues were $20.2 million. As of December 31, 2018, domestic assets were $132.7 million and foreign assets were $58.2 million.

Our Products

~~Diflorasone~~There ~~Diacetate~~was ~~Ointment~~no ~~USP~~product ~~0.05%~~which individually accounted for 15more than 10% of the ~~Company's~~ total revenues in ~~fiscal 2019~~2020. ~~There~~Diflorasone ~~was~~Diacetate noOintment ~~product~~USP ~~which~~0.05% ~~individually~~ accounted for ~~more than 10~~15% of the Company's total revenues in ~~2018~~2019.

Corporate Information

We were incorporated in Delaware in 1977, and on May 7, 2008, our stockholders approved our name change from IGI, Inc. to IGI Laboratories, Inc. Effective October 23, 2015, we changed our name to Teligent Inc. Our principal offices are located at 105 Lincoln Avenue, Buena, New Jersey 08310. Our telephone number is (856) 697-1441. We maintain a website at www.teligent.com. We make available on or through our website our periodic reports that we file with the Securities and Exchange Commission, or the SEC. This information is available on our website free of charge as soon as reasonably practicable after we electronically file the information with or furnish it to the SEC. The contents of our website are not incorporated by reference into this document and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Teligent United States Topical Pharmaceutical Products

Product

Formulation

Presentations

Brand equivalent

Therapeutic Classification

Betamethasone Dipropionate (Augmented), 0.05%

Ointment

15g, 50g

DIPROLENE®

Topical Corticosteroid

Betamethasone Dipropionate (Augmented), 0.05%

Lotion

30mL, 60mL

DIPROLENE®

Topical Corticosteroid

Ciclopirox 1%

Shampoo

120mL

Loprox

Anti-fungal

Clindamycin Phosphate 1%

Topical Solution

30mL, 60mL

Cleocin®

Topical Anti-infective

Clobetasol Propionate 0.05%

Lotion

2oz, 4oz

Clobetasol

Topical Corticosteroid

Clobetasol Propionate 0.05%

Gel

15g, 30g, 60g

Embeline®

Topical Corticosteroid

Clobetasol Propionate 0.05%

Ointment

15g, 30g, 45g, 60g

Temovate Ointment

Topical Corticosteroid

Clobetasol Propionate 0.05%

Cream

15g, 30g, 45g, 60g

Temovate Cream

Topical Corticosteroid

Clobetasol Propionate Emollient 0.05%

Cream

15g, 30g, 45g, 60g

TemovateE®

Topical Corticosteroid

Desonide 0.05%

Ointment

15g, 60g

Desonide Ointment

Topical Corticosteroid

Desoximetasone 0.25% (1)

Ointment

15g, 60g, 100g

Topicort®

Topical Corticosteroid

Desoximetasone 0.05%

Ointment

15g, 30g, 60g, 100g

Topicort®

Topical Corticosteroid

Diclofenac Sodium 1.5%

Topical Solution

150mL

Pennsaid®

Topical Anti-inflammatory

Diflorasone Diacetate 0.05%

Ointment

15g, 30g, 60g

PSORCON

Corticosteroid

Econazole Nitrate 1%

Cream

15g, 30g, 85g

Spectazole®

Topical Anti-fungal

Erythromycin 2%

Gel

30g, 60g

Erygel®

Topical Corticosteroid

Erythromycin 2%

Topical Solution

60 mL

Erythromycin Topical Solution 2%

Topical Corticosteroid

Fluocinolone Acetonide 0.01%

Topical Solution

60mL

Synalar®

Topical Corticosteroid

Fluocinolone Acetonide 0.01%

Cream

15g, 60g

Synalar®

Topical Corticosteroid

Fluocinolone Acetonide 0.025%

Ointment

15g, 60g

Synalar®

Topical Corticosteroid

Fluocinolone Acetonide 0.025%

Cream

15g, 60g

Synalar®

Topical Corticosteroid

Fluocinonide 0.05%

Gel

15g, 30g, 60g

Fluocinonide Gel

Topical Corticosteroid

Fluocinonide 0.05%

Ointment

15g, 30g, 60g

Lidex

Topical Corticosteroid

Fluocinonide 0.1%

Cream

30g, 60g, 120g

Vanos

Topical Corticosteroid

Fluocinonide 0.05%

Cream

15g, 30g, 60g, 120g

Fluocinonide Cream

Topical Corticosteroid

Fluocinonide 0.05%

Topical Solution

20mL, 60mL

Lidex

Topical Corticosteroid

Flurandrenolide 0.05%

Ointment

15g, 30g, 60g

Cordran®

Topical Corticosteroid

Gentamicin Sulfate 0.1%

Cream

15g, 30g

Garamycin Cream

Topical Anti-infective

Gentamicin Sulfate 0.1%

Ointment

15g, 30g

Gentamicin Ointment

Topical Anti-infective

Halobetasol Propionate 0.05%

Ointment

15g, 50g

Ultravate

Topical Corticosteroid

Hydrocortisone Butyrate 0.1%

Lotion

118mL, 59 mL

Locoid®

Topical Corticosteroid

Hydrocortisone 2.5%

Cream

30g, 1lb jar

Hydrocortisone Cream

Topical Steroid

Hydrocortisone 2.5%

Lotion

2oz

Hydrocortisone Lotion

Topical Steroid

Lidocaine 4%

Topical Solution

50mL

Xylocaine®

Topical Anesthetic

Lidocaine 5%

Ointment

35.44g

Xylocaine®

Topical Anesthetic

Lidocaine 4%

Cream

5g, 15g, 30g

OTC

Topical Anesthetic

Lidocaine/Prilocaine 2.5% / 2.5%

Cream

5g, 30g

EMLA Cream

Local Anesthetic

Nystatin/Triam 100,000 Nystatin units/1mg per gram

Ointment

15g, 30g, 60g

Mykacet®

Topical Anti-fungal

Triamcinolone Acetonide 0.025%

Lotion

60ml

Triamcinolone Acetonide

Topical Corticosteroid

Triamcinolone Acetonide 0.1%

Ointment

15g, 80g, 1lb jar

Kenalog®

Topical Corticosteroid

Triamcinolone Acetonide 0.1%

Lotion

60mL

Triamcinolone Acetonide

Topical Corticosteroid

Triamcinolone Acetonide 0.1%

Cream

15g, 30g, 80g

Kenalog®

Topical Corticosteroid

Triamcinolone Acetonide 0.5%

Ointment

15g

Kenalog®

Topical Corticosteroid

Teligent United States Injectable Products

Product

Strength

Formulation

Presentations

Dossier type held by Teligent

Therapeutic Classification

Cefotan (Cefotetan) ®

1g, 2g

Injectable

Vial

NDA

Antibacterial for systemic use

Fortaz (Ceftazidime) ®

500mg, 1g, 2g, 6g

Injectable

Vial, Twist Vial, Frozen Bag

NDA

Antibacterial for systemic use

Zantac (Ranitidine) ®

25mg/ml

Injectable

2ml, 6ml, 40ml Vials

NDA

Drugs for peptic ulcer and gastro-oesophageal related disorders (GORD)

Zinacef (Cefuroxime) ™

750mg, 1.5g, 7.5g

Injectable

Vial, Twist Vial

NDA

Antibacterial for systemic use

Teligent Canada Products (1)

Product

Strength

Formulation

Presentations

Brand equivalent

Dossier type held by Teligent

Therapeutic Classification

Acetylcysteine

200 mg/mL

Injectable

10mL and 30 mL vial

Mucomyst®

ANDS

Antidote

Atropine

0.4 mg/mL, 0.6 mg/mL

Injectable

1 mL ampoule

N/A

DINA

Antimuscarnic, antispasmodic

Baclofen

0.05 mg/mL, 0.5mg/mL, 2mg/mL

Injectable

1mL, 5mL, 20mL ampoule

Lioresal®

ANDS

Muscle Relaxant

Clindamycin Phosphate Topical Solution USP

1% w/v

Topical Solution

30 mL and 60 mL bottle

DalacinT®

ANDS

Topical Antibiotic

Cyanocobalamin

1000 mcg/mL

Injectable

1 mL ampoule, 10 mL vial

N/A

DINA

Hematopoietic

Diazepam

5 mg/mL

Injectable

2mL ampoule

Valium®

ANDS

Axiolytic - sedative

Diclofenac Sodium Solution

1.5% w/w

Topical Solution

150 mL, 60 mL bottle

Pennsaid®

ANDS

Topical Anti-inflammatory

Dimenhydrinate

50 mg/mL, 250 mg/mL

Injectable

1 mL ampoule, 5 mL vial

Gravol®

DINA

Antiemtic

Dobutamine

12.5 mg/mL

Injectable

20 mL vial

N/A

ANDS

Sympathomimetic

Dorzolamide (2)

0.02

Opthalmic Solution

5 mL

Trusopt

ANDS

Elevated Intraocular Pressure Therapy
(Topical Carbonic Anhydrase Inhibitor)

Dorzolamide & Timolol (2)

2% Dorzolamide and 0.5% Timolol

Opthalmic Solution

5 ml & 10 mL

Cosopt

ANDS

Elevated Intraocular Pressure Therapy
(Topical Carbonic Anhydrase Inhibitor and Topical Beta-Adrenergic Blocking Agent)

Epinephrine

1 mg/mL

Injectable

1 mL ampoule

Adrenalin®

DINA

Sympathomimetic

Ergonovine Maleate

0.25 mg/mL

Injectable

1 mL ampoule

N/A

DINA

Oxytocic

Fentanyl

50 mcg/mL

Injectable

2mL ampoule

Sublimaze®

ANDS

Opiate Anesthetic

Furosemide

10 mg/mL

Injectable

2 mL ampoule

Lasix®

ANDS

Diuretic

Gemcitabine Hydrochloride

10 mg, 200 mg, 1 g

Injectable

10 mg, 200 mg, 1 g vial

Gemzar®

ANDS

Antineoplastic agent

Gentamicin Sulfate

10 mg/mL, 40 mg/mL

Injectable

2mL ampoule

Garamycin®

ANDS

Antibiotic

Irinotecan Hydrochloride

20 mg/mL

Injectable

2 mL, 5 mL, 15 mL, 25 mL vial

Camptosar®

ANDS

Antineoplastic agent

Latanoprost (2)

50 mcg/mL

Opthalmic Solution

2.5 mL

Xalatan

ANDS

Prostaglandin F2α analogue

Latanoprost & Timolol (2)

50 mcg / mL Latanoprost and

Opthalmic Solution

2.5 mL

Xalacom

ANDS

Elevated Intraocular Pressure Therapy
Prostaglandin F2α Analogue and Beta-adrenergic Receptor Blocker

Product

Strength

Formulation

Presentations

Brand equivalent

Dossier type held by Teligent

Therapeutic Classification

Lidocaine 1%

10 mg/mL

Injectable

5 mL and 10 mL polyampoule, 5 mL glass

Xylocaine®

DINA

Local Anesthetic

Lidocaine 1% multidose

10 mg/mL

Injectable

20 mL and 50 mL vial

Xylocaine®

DINA

Local Anesthetic

Lidocaine 2%

20 mg/mL

Injectable

5 mL and 10 mL polyampoule

Xylocaine®

DINA

Local Anesthetic

Lidocaine 2% multidose

20 mg/mL

Injectable

20 mL and 50 mL vial

Xylocaine®

DINA

Local Anesthetic

Lidocaine 2% with epinephrine

20 mg/mL & 0.01 mg/mL

Injectable

20 mL and 50 mL vial

Xylocaine®

DINA

Local Anesthetic

Lidocaine Hydrochloride Topical Solution USP 4%

40 mg/mL

Topical Solution

50mL bottle

Xylocaine®

DINA

Topical Anesthetic

Lidocaine Ointment USP 5%

50 mg/g

Ointment

35g tube

Xylocaine®

DINA

Topical Anesthetic

Methylene Blue

10 mg/mL

Injectable

5mL ampoule

N/A

DINA

Antidote

Naloxone

0.4mg / ml

Injectable

1mL ampoule

Narcan®

ANDS

Opitate Antagonist

Piperacillin and Tazobactam

2g/0.25 g, 3 g/0.375 g, 4 g/0.5 g

Injectable

2.25 g, 3.375 g, 4.5 g vial

Tazocin®

ANDS

Antibacterial for systemic use

Sodium Cloride

0.009

Injectable

10 mL polyampoule

N/A

DINA

Diluent

Sterile Water for Injection

Injectable

10 mL polyampoule

N/A

DINA

Diluent

Succinylcholine Chloride

20 mg/mL

Injectable

10 mL and 20 mL vial

Quelicin®

DINA

Muscle Relaxant

Sufentanil Citrate Injection

50 mcg/mL

Injectable

1 mL, 5 mL and 20 mL ampoule

N/A

ANDS

Opiate Anesthetic

(1) Table does not include Euflexxa®, which is not owned by Teligent Canada but is distributed and sold by Teligent Canada.

(2) Cross-licensed products registered under Teligent Canada Inc.

Teligent United States Other Products

Below is a listing of the previously marketed products that were purchased from AstraZeneca and Valeant, along with a description of each respective formulation, presentation, brand equivalent, dossier and indication.

Product

Strength

Formulation

Presentations

Brand equivalent

Dossier type held by Teligent

Therapeutic Classification

Ciprofloxacin

0.3%

Ophthalmic Solution

2.5ml, 5ml, 10ml bottles

Ciloxan ®

ANDA

Antibacterial for systemic use

Betaxolol

0.5%

Ophthalmic Solution

5ml, 7.5ml, 15ml bottles

Betopic ®

ANDA

Beta Blocking Agent

Phytonadione

10mg, 1mg

Injectable

0.5ml, 1ml ampoules; 3cc, 6cc vials

AquaMephyton ®

NDA

Hemostatic

Amikacin Sulfate

50mg/ml, 250mg/ml

Injectable

2ml, 4ml vials

Amikacin Sulfate ®

ANDA

Antibacterial for systemic use

Calcitonin Salmon

200IU/ml

Injectable

2ml vials

Miacalcin ®

ANDA

Anti-parathyroid Agent

Cefotetan Disodium

20mg/ml

Injectable (bag)

50ml bags

Cefotetan ®

NDA

Antibacterial for systemic use

Clindamycin Phosphate

150mg/ml

Injectable

2ml, 4ml, 6ml, 60ml vials

Cleocin ®

ANDA

Antibacterial for systemic use

Dobutamine HCl

12.5mg/ml

Injectable

20ml, 40ml vials

Dobutamine HCl ®

ANDA

Cardiac Stimulant

Dopamine HCl

40mg/ml

Injectable

5ml, 10ml (vials and syringes)

Dopamine HCl ®

NDA / ANDA

Cardiac Stimulant

Dopamine HCl

80mg/ml

Injectable

5ml, 10ml (vials, ampoules, and syringes)

Dopamine HCl ®

NDA / ANDA

Cardiac Stimulant

Dopamine HCl

160mg/ml

Injectable

5ml (vials and ampoules)

Dopamine HCl ®

NDA / ANDA

Cardiac Stimulant

Droperidol

2.5mg/ml

Injectable

10ml vials, 2ml and 5ml ampoules, and 2ml syringes

Inapsine ®

ANDA

Anti-Psychotic

Furosemide

10mg/ml

Injectable

2ml, 4ml, 8ml, and 10ml vials, 4ml and 10ml syringes

Furosemide ®

ANDA

Diuretic

Mannitol

USP 25%

Injectable

50ml (vials and syringes)

Mannitol ®

ANDA

Diuretic

Meperidine HCl

25mg/ml, 50mg/ml, 75mg/ml, 100mg/ml

Injectable

1ml and 30ml vials, 1ml and 1.5ml ampoules, and 1ml syringes

Demerol ®

ANDA

Systemic analgesic

Midazolam HCl

5mg/ml

Injectable

2ml syringe

Midazolam ®

ANDA

Sedative

Orphenadrine

30 mg/mL

Injectable

2 mL ampule

Orphenadrine Citrate

ANDA

Muscle Relaxant

Edrophonium

10 mg/mL

Injectable

1 mL ampule and 10 mL vial

Enlon®

NDA

Acetylcholinesterase inhibitor

MVI-12

N/A

Injectable

10 mL ampules and 5 mL vials

N/A

NDA

Systemic multivitamin

Naloxone HCl

0.4 mg/mL, 1 mg/mL

Injectable

1 mL 5 mLand 10 mL vials

N/A

ANDA

Opitate Antagonist

Naloxone HCl (preservative free)

0.4 mg/mL

Injectable

1 mL vials

N/A

ANDA

Opitate Antagonist

Tobramycin Sulfate

10 mg/mL, 40 mg/mL

Injectable

2 mLand 35 mL vials

N/A

ANDA

Antibacterial for systemic use

Nalbuphine

10 mg/mL and 20 mg/mL

Injectable

1 mL and 10 mL vials

Nubain®

ANDA

Systemic analgesic

Our Suppliers

We require a supply of quality raw materials and components to manufacture and package pharmaceutical products for ourselves and third parties with which we have contracted. The principal components of our products are active and inactive pharmaceutical ingredients and certain packaging materials. The APIs and other materials and supplies used in our pharmaceutical manufacturing operations are generally available and purchased from many different U.S. and non-U.S. suppliers. However, in some cases, the raw materials used to manufacture pharmaceutical products are available only from a single supplier. Even when more than one supplier exists, we may choose, and in some cases have chosen, only to list one supplier in our applications submitted to the FDA. Any change in a supplier not previously approved must then be submitted through a formal approval process with the FDA.

Research and Development

Our R&D activities are integral to our business and are conducted at our facilities in Buena, New Jersey ~~and Estonia~~. The R&D team is responsible for formulation, reverse engineering, methods development, analytical and microbiologic testing and scale up, and regulatory expertise. Our employees have specific expertise in developing injectable products and topical products in a wide range of ~~dosage~~formulation ~~forms~~types, including simple solutions through complex creams. All ANDA topical development is conducted in-house except for bioequivalence testing, which is performed by a contract research organization ("CRO"). Our injectable development is primarily conducted in house with some assistance from certain CRO's.

We incurred $107.87 million and $1410.18 million in R&D expenses in ~~2019~~2020 and ~~2018~~2019, respectively.

Product Development and Government Regulation

United States

Prescription pharmaceutical products in the U.S. are generally marketed as either brand or generic drugs. Brand products are usually marketed under brand names through marketing programs that are designed to generate physician and consumer loyalty. Brand products are patent protected, which provides a period of market exclusivity during which time they are sold with little or no competition for the compound, although there typically are other participants in the therapeutic area. Additionally, brand products may benefit from other periods of non-patent market exclusivity available under various provisions of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Exclusivity normally provides brand products with the ability to maintain their profitability for a period of time and brand products typically continue to play a significant role in the market due to physician and consumer loyalties after the end of patent protection or other market exclusivities.

Generic pharmaceutical products are the pharmaceutical and therapeutic equivalents of the brand product, also known as the reference listed drug, or RLD. A reference listed brand drug is an approved drug product listed in the FDA publication entitled Approved Drug Products with Therapeutic Equivalence Evaluations, popularly known as the Orange Book. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, provides that generic drugs may enter the market after the approval of an ANDA. An ANDA approval requires that bioequivalence to the reference listed drug be demonstrated and also requires that any patents on the corresponding reference listed drug be expired, invalidated, non-infringed and/or any other relevant market exclusivity periods related to the reference listed drug be expired as well. Generic drugs are bioequivalent to their reference brand name counterparts. Accordingly, generic products provide a safe, effective and cost-efficient alternative to users of these reference brand products. Branded generic pharmaceutical products are generic products in that they are approved for marketing under an ANDA, but they may be more responsive to promotion efforts generally used to promote branded pharmaceutical products. Growth in the generic pharmaceutical industry has been, and will continue to be, driven by the increased market acceptance of generic drugs, as well as the number of brand drugs for which patent terms and/or other market exclusivities have expired.

We obtain new generic products primarily through internal product development. Additionally, we license or co-develop products through arrangements with other companies. All applications for FDA approval must contain information relating to product formulation, raw material suppliers, stability, manufacturing processes, packaging, labeling and quality control. Information to support the bioequivalence of generic drug products or the safety and effectiveness of new drug products for their intended use is also required to be submitted. There are generally two types of applications used for obtaining FDA approval of new products:

•New Drug Application — An NDA is filed when approval is sought to market a newly developed branded product and, in certain instances, for a new dosage form, a new delivery system or a new indication for a previously approved drug.

•Abbreviated New Drug Application — An ANDA is filed when approval is sought to market a generic equivalent of a drug product previously approved under an NDA and listed in the FDA’s Orange Book (i.e., an

RLD) or for a new dosage strength for a drug previously approved under an ANDA.

The ANDA development process is generally less time-consuming and complex than the NDA development process. It typically does not require new preclinical and clinical studies, because it relies on the studies establishing safety and efficacy conducted for the RLD previously approved through the NDA process. The ANDA process, however, does typically require one or more bioequivalence studies to show that the ANDA drug is bioequivalent to the previously approved reference listed brand drug. Bioequivalence studies compare the bioavailability of the proposed drug product with that of the RLD product containing the same active ingredient. Bioavailability is a measure of the rate and extent to which the active ingredient or active moiety is absorbed from a drug product and becomes available at the site of action in a human patient. Thus, a demonstration of bioequivalence confirms the absence of a significant difference between the proposed product and the reference listed brand drug in terms of the rate and extent to which the active ingredient or active moiety becomes available at the site of drug action when administered at the same molar dose under similar conditions.

Generic products are generally introduced to the marketplace at the expiration of patent protection for the brand product or at the end of a period of non-patent market exclusivity. However, if an ANDA applicant files an ANDA containing a certification of invalidity, non-infringement or unenforceability related to a patent listed in the Orange Book with respect to the relevant RLD, the applicant may be able to market the generic equivalent prior to the expiration of patent protection for the brand product. Such patent certification is commonly referred to as a Paragraph IV certification. If the holder of the NDA sues, claiming infringement or invalidation, within 45 days of notification by the applicant, the FDA may not approve the ANDA application until the earlier of the rendering of a court decision favorable to the ANDA applicant or the expiration of 30 months. An ANDA applicant that is first to file a Paragraph IV certification is eligible for a period of generic marketing exclusivity. This exclusivity, which under certain circumstances may be required to be shared with other ANDA sponsors that have made Paragraph IV certifications, lasts for 180 days, during which the FDA cannot grant final approval to other ANDA applications for a generic equivalent to the same reference drug.

expiration of 30 months. An ANDA applicant that is first to file a Paragraph IV certification is eligible for a period of generic marketing exclusivity. This exclusivity, which under certain circumstances may be required to be shared with other ANDA sponsors that have made Paragraph IV certifications, lasts for 180 days, during which the FDA cannot grant final approval to other ANDA applications for a generic equivalent to the same reference drug.

In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent market exclusivity, during which the FDA cannot approve an application for a generic version product. If the reference drug is a new chemical entity, the FDA may not accept an ANDA for a generic product for up to five years following approval of the NDA for the new chemical entity. If it is not a new chemical entity, but the holder of the NDA conducted clinical trials essential to approval of the NDA or a supplement thereto, the FDA may not approve an ANDA for a reference NDA product before the expiration of three years. Certain other periods of exclusivity may be available if the RLD is indicated for treatment of a rare disease (i.e., orphan drug exclusivity) or the sponsor conducts pediatric studies in accordance with FDA requirements.

Supplemental ANDAs are required to secure FDA for approval of various types of changes to an approved application and these supplements may be under review for six months or more. In addition, certain types of changes may only be approved once new bioequivalence studies are conducted or other requirements are satisfied.

An additional requirement for FDA approval of NDAs and ANDAs is that our manufacturing procedures and operations conform to FDA requirements and guidelines, generally referred to as current Good Manufacturing Practices, or cGMPs. The requirements for FDA approval encompass all aspects of the production process, including validation and recordkeeping, which are continuously changing and evolving.

In addition to generic products that are approved for marketing via ANDAs, Section 505(b)(2) of the FD&C Act permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. A Section 505(b)(2) applicant may eliminate the need to conduct certain preclinical or clinical studies, if it can establish that reliance on studies conducted for a previously-approved product is scientifically appropriate. Unlike the ANDA pathway used for bioequivalent versions of brand products, which does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data, the 505(b)(2) regulatory pathway does not preclude the possibility that a follow-on applicant would need to conduct additional clinical trials or nonclinical studies; for example, they may be seeking approval to market a previously approved drug for new indications or for a new patient population that would require new clinical data to demonstrate safety or effectiveness.

Facilities, procedures, operations and/or testing of products are subject to periodic inspection by the FDA, the U.S. Drug Enforcement Administration, or DEA, and other authorities. In addition, the FDA conducts pre-approval and post-approval reviews and plant inspections to determine whether our systems and processes are in compliance with cGMP and other FDA regulations. Our suppliers are subject to similar regulations and periodic inspections.

In 2012, the U.S. Food and Drug Administration Safety and Innovation Act, or the FDASIA, was enacted into law. FDASIA is intended to enhance the safety and security of the U.S. drug supply chain by holding all drug manufacturers supplying products to the U.S. to the same FDA inspection standards and schedules.

FDASIA also included the Generic Drug User Fee Act (GDUFA), a novel user fee program focused on three key aims:

•Safety – Ensure that industry participants, foreign or domestic, are held to consistent quality standards and are inspected with parity using a risk-based approach.

•Access – Expedite the availability of generic drugs by bringing greater predictability to the review times for abbreviated new drug applications, amendments and supplements and improving timeliness in the review process.

•Transparency – Enhance FDA’s visibility into the complex global supply environment by requiring the identification of facilities involved in the manufacture of generic drugs and associated APIs, and to improve the FDA’s communications and feedback with industry.

Under GDUFA, 70% of the total fees were derived from facility fees paid by Finished Dosage Form manufacturers and API facilities listed in pending or approved generic drug applications. The remaining 30% of the total fees were derived ~~from application fees, including generic drug application fees, prior approval supplement fees and fees for certain types of Drug Master Files, or DMFs.~~

from application fees, including generic drug application fees, prior approval supplement fees and fees for certain types of Drug Master Files, or DMFs.

In August 2017, Congress passed and the President signed the FDA Reauthorization Act (FDARA). Among other provisions, FDARA included the second iteration of GDUFA, or “GDUFA II,” to reauthorize the collection of these user fees from industry for another 5 years, i.e., through September 2022. GDUFA II also made significant changes to the generic drug user fee program, including eliminating the fee for Prior Approval Supplements and creating a new Generic Drug Applicant Annual Program Fee, assessed based on the number of approved ANDAs owned by a company and its affiliates. The new Annual Program Fee is expected to account for approximately 62% of fees collected by FDA under GDUFA. In exchange, GDUFA II implements a number of elements to enhance communication between FDA and industry throughout the ANDA review process, thereby improving predictability and transparency and promoting the efficiency and effectiveness of the generic drug review process.

Canada

In Canada, the registration process for approval of all generic pharmaceuticals has two tracks that proceed in parallel. The first track of the process involves an examination of the proposed generic product by Health Canada, the federal department responsible for national public health, to ensure that the quality, safety and efficacy of the proposed generic product meets Canadian standards and bioequivalence requirements. The second track concerns patent rights of the brand drug owner. Companies may submit an application called an abbreviated new drug submission, or ANDS, to Health Canada that compares the proposed generic drug to another drug marketed in Canada under a Notice of Compliance, or NOC, issued to a first person. When Health Canada is satisfied that the generic pharmaceutical product described in the ANDS satisfies the statutory requirements, it issues an NOC for that product for the uses specified in the ANDS, subject to any court order that may be made in the second track of the approval process.

The second track of the approval process is governed by the Patented Medicines NOC Regulations, or the Regulations. We currently do not have any applications in development that would utilize this track.

Section C.08.004.1 of the Canadian Food and Drug Regulations is the so-called data protection provision, and the current version of this section applies in respect of all drugs for which an NOC was issued on or after June 17, 2006. A subsequent applicant for approval to market a drug for which an NOC has already been issued does not need to perform duplicate clinical trials similar to those conducted by the first NOC holder, but is permitted to demonstrate safety and efficacy by submitting data demonstrating that its formulation is bioequivalent to the formulation that was issued for the first NOC. The first party to obtain an NOC for a drug will have an eight-year period of exclusivity starting from the date it received its NOC based on those clinical data. A subsequent applicant for approval that seeks to establish safety and efficacy by comparing its product to the product that received the first NOC will not be able to file its own application until six years after the issuance of the first NOC. The Minister of Health will not be permitted to issue a NOC to that applicant until eight years after the issuance of the first NOC — this additional two-year period will correspond in most cases to the 24-month automatic stay under the Regulations. If the first person provides the Minister with the description and results of clinical trials relating to the use of the drug in pediatric populations, it will be entitled to an extra six months of data protection. A drug is only entitled to data protection so long as it is being marketed in Canada.

its NOC based on those clinical data. A subsequent applicant for approval that seeks to establish safety and efficacy by comparing its product to the product that received the first NOC will not be able to file its own application until six years after the issuance of the first NOC. The Minister of Health will not be permitted to issue a NOC to that applicant until eight years after the issuance of the first NOC — this additional two-year period will correspond in most cases to the 24-month automatic stay under the Regulations. If the first person provides the Minister with the description and results of clinical trials relating to the use of the drug in pediatric populations, it will be entitled to an extra six months of data protection. A drug is only entitled to data protection so long as it is being marketed in Canada.

Facilities, procedures, operations and/or testing of products are subject to periodic inspection by Health Canada. In addition, Health Canada conducts pre-approval and post-approval reviews and plant inspections to determine whether our systems are in compliance with the Good Manufacturing Practices in Canada, Drug Establishment Licensing requirements and other provisions of the Regulations. Competitors are subject to similar regulations and inspections.

The federal government, provinces and territories in Canada operate drug benefit programs through which eligible recipients receive drugs through public funding; these drugs are listed on provincial or territorial Drug Benefit Formularies (each, a “Formulary”). Eligible recipients include First Nations and Inuit clients, seniors, persons on social assistance, low-income earners, and those with certain specified conditions or diseases. Formulary listings are also used by private payors to reimburse generic products. To be listed in a Formulary, drug products must have received an NOC from Health Canada and must comply with each jurisdiction’s individual review process.

The primary regulatory approval for pharmaceutical manufacturers, distributors and importers selling pharmaceuticals to be marketed in Canada is the issuance of an establishment license, or EL. An EL is issued to a Canadian facility once Health Canada has approved the facilities in which the pharmaceuticals are manufactured, distributed or imported. A key requirement for EL-issuance is compliance with the Good Manufacturing Practices as set out by Health Canada. For pharmaceuticals that are imported into Canada, the license for the Canadian importing facility must list all foreign sites at which imported pharmaceuticals, and their active ingredients, are manufactured and tested. To be listed on our EL, all our foreign sites must demonstrate compliance with relevant Good Manufacturing Practices recognized by Health Canada.

which imported pharmaceuticals, and their active ingredients, are manufactured and tested. To be listed on our EL, all our foreign sites must demonstrate compliance with relevant Good Manufacturing Practices recognized by Health Canada.

Sales and Marketing

We sell, distribute and market our prescription drug products to national chain drug stores and drug wholesalers and distributors and group purchasing organizations, or GPOs, in the United States and Canada. This commercialization infrastructure includes satisfying our state, provincial, territorial, or national licensing requirements, implementing procedures with our third-party logistics partners, and maintaining appropriate sales order to cash administrative processes and a manager of national accounts to manage our sales.

Competition

In our generic topical prescription drug business, we face competition from other generic drug manufacturers and brand-name pharmaceutical companies through authorized generics. Although there are a significant number of competitors in the generic drug market, there are fewer competitors in the topical generic drug market. The five dominant companies in the topical generic drug market are: Perrigo Company, Sandoz (the generic pharmaceutical division of Novartis AG), Taro Pharmaceutical Industries, Ltd., Mylan N.V., and Teva Pharmaceutical Industries, Ltd. We believe the concentrated nature of the topical generic drug market creates an opportunity for us to be able to compete based on a variety of factors, including our focus on niche opportunities within the market segment and our dedication to quality in every area of our business.

In our generic injectable prescription drug business, we also face competition from other generic drug manufacturers and brand-name pharmaceutical companies through authorized generics. Although there are a significant number of competitors in the generic drug market, there are fewer dominant competitors in the injectable generic drug market. The ~~five~~four dominant companies in the injectable generic drug market in the United States consist of ~~Grifols USA,~~ Fresenius Kabi USA, Pfizer, Par and Hikma. In Canada, we face competition from largely the same firms as in the United States as well as certain Canada-only firms. The Canadian generic injectable market is dominated by Sandoz (the generic pharmaceutical division of Novartis AG), Pfizer Injectables and Fresenius Kabi Canada.

Our generic injectable strategy is focused on injectable products with limited competition, and products that have a history of lack of supply, or instability in the supply chain, where we can add value and leverage on our ability to be a reliable supplier to the marketplace. We believe the concentrated nature of some molecules within the injectable generic drug market, and history of lack of supply of certain molecules in the marketplace, create opportunities for us that we believe will enable us to compete based on a variety of factors, including our focus on niche opportunities within the market segment and our dedication to quality in every area of our business.

16The contract development and manufacturing services market is highly competitive and includes larger organizations with substantially greater resources than us. Many of our competitors are companies that commercialize and/or manufacture their required products at their own facilities. These competitors include major pharmaceutical companies, generic drug manufacturers and consumer health product companies that generally have substantially greater manufacturing, R&D, marketing and financial resources than us and, in some cases, have more geographically diversified international operations. We compete specifically with a number of different privately held contract manufacturing companies. Although this market is competitive, the competition is limited due to the need for specific expertise in topical formulations and cGMP facilities. We believe that we have the expertise required and we will continue to service our existing customers in this market by providing high quality, customer-oriented service, complemented by our contract development expertise in topical formulations.

will enable us to compete based on a variety of factors, including our focus on niche opportunities within the market segment and our dedication to quality in every area of our business.

The contract manufacturing services market is highly competitive and includes larger organizations with substantially greater resources than us. Many of our competitors are companies that commercialize and/or manufacture their required products at their own facilities. These competitors include major pharmaceutical companies, generic drug manufacturers and consumer health product companies that generally have substantially greater manufacturing, R&D, marketing and financial resources than us and, in some cases, have more geographically diversified international operations. We compete specifically with a number of different privately held contract manufacturing companies. Although this market is competitive, the competition is limited due to the need for specific expertise in topical formulations and cGMP facilities. We believe that we have the expertise required and we will continue to service our existing customers in this market by providing high quality, customer-oriented service, complemented by our contract development expertise in topical formulations.

Environmental Matters

Our operations are subject to a variety of environmental, health and safety laws and regulations, including those of the United States Environmental Protection Agency and equivalent state and local regulatory agencies. These laws and regulations govern, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous substances and wastes, soil and groundwater contamination and employee health and safety. Our manufacturing facility uses, in varying degrees, hazardous substances in its processes. Contamination at our facility can result and has resulted in liability to us, for which we have recorded appropriate reserves as needed. For example, two of the Company’s facilities have undergone remediation of environmental contamination.

Intellectual Property

To compete effectively, we need to develop and maintain a proprietary position with regard to our technology, product candidates and business. Our goal is to safeguard our trade secrets and know-how, attain, maintain and enforce patent protection for our product candidates, formulations, processes, methods and other proprietary technologies, and operate without infringing on the proprietary rights of others. We seek to obtain, where appropriate, the broadest intellectual property protection possible for our current product candidates and any future product candidates, proprietary information and proprietary technology. We seek to achieve this protection through a combination of contractual arrangements and patents.

We depend upon the skills, knowledge, experience and know-how of our management and R&D personnel, as well as that of our consultants, advisors and collaborators. To help protect our proprietary know-how, which is not patentable, and for inventions for which patents may be difficult to enforce, we currently rely, and will continue to rely in the future, on confidentiality agreements to protect our interests. We require our employees, consultants, advisors and collaborators to enter into confidentiality agreements that prohibit the disclosure of confidential information to any other parties. We also require our employees and consultants to disclose and assign to us their ideas, developments, discoveries and inventions. We understand that these agreements may not provide us with adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure.

We also seek to obtain patent protection when necessary, and we understand that this may not provide us with complete protection against competitors who may attempt to circumvent our patents.

Facility and Operations

The Company’s executive administrative offices are located in Buena, New Jersey, in two facilities which originally were approximately 33,000 square feet built on 8.44 acres of land in 1995, which we own. In 2017 we acquired an additional 3.0 acres of adjacent land in support of our facility expansion. We now own a total of 11.44 acres at our Buena facility. ~~This~~The ~~facility~~facilities isare used for production, product-testing, product development, ~~marketing~~ and warehousing for our pharmaceutical, cosmeceutical and cosmetic products. We completed construction on an expansion of our Buena, New Jersey facility to total approximately 110,000 square feet. The expanded facility has increased our manufacturing capability for topical products and will also enable the production of sterile injectable products in both vial and ampule presentations upon FDA approval. The sterile production area is designed around isolator-based technology. Our capabilities encompass a full suite of competencies, including manufacturing, regulatory, quality assurance and in-house validation. We are using this facility expansion as an opportunity to secure our long-term growth in manufacturing and marketing injectable in the US and to upgrade and improve the degree of automation and capacity in our existing topical production suite.

17We operate our facility in accordance with cGMP. Our facility is registered with the FDA as a drug establishment. We believe that our facility and equipment are in good condition, are well-maintained and can operate at present levels. Our manufacturing operations are focused on regulatory compliance, continuous improvement, process standardization and excellence in quality and execution across the organization. On November 26, 2019, the FDA issued us a Warning Letter following an inspection of our manufacturing facility at 105 Lincoln Avenue, Buena, New Jersey, that identified several cGMP violations.

We operate our facility in accordance with cGMP. Our facility is registered with the FDA as a drug establishment. We believe that our facility and equipment are in good condition, are well-maintained and are able to operate at present levels. Our manufacturing operations are focused on regulatory compliance, continuous improvement, process standardization and excellence in quality and execution across the organization. On November 26, 2019, the FDA issued us a Warning Letter following an inspection of our manufacturing facility at 105 Lincoln Avenue, Buena, New Jersey, that identified several cGMP violations. We are continuing to work diligently to remediate all issues cited by the FDA and hope to close out this inspection in the coming months.

We lease additional warehouse space in Vineland, New Jersey, as needed to complement our existing warehouse capacity.

The Company also leases approximately 9,500 square feet of corporate office space in Iselin, New Jersey, and approximately 4,000 square feet of office space in Mississauga, Canada ~~and approximately 3,000 square feet of office and laboratory space in Tallinn, Estonia~~.

~~Employees~~Human Capital Resources

Our employees are the heart of our Company. On December 31, ~~2019~~2020, we had a total of ~~252~~142 full-time employees, including 1411 full-time employees in Canada ~~and 15 full-time employees in Estonia~~. In addition, as the need arises, we occasionally utilize short-term, part-time employees who are paid on an hourly basis. We also utilize temporary employees provided by third-parties on a regular basis, primarily in our production department. We do not have a collective bargaining agreement with our employees and we believe that our employee relations are good.

18In the highly competitive pharmaceutical industry, it is imperative that we attract, develop and retain top talent on an ongoing basis. To do this, we seek to make Teligent an inclusive, diverse and safe workplace, with meaningful compensation, benefits and wellness programs, and offering training and leadership development programs that foster career growth.

Our executive leadership team and Board of Directors play key roles in overseeing culture and talent at Teligent and devote time throughout the year to human capital strategy and execution in such areas as: inclusion and diversity, Company culture, employee engagement, training and development, recruiting and turnover, leadership development and succession planning. Management regularly updates the Board on internal metrics in these areas.

Item 1A. RISK FACTORS

Our current business and future results may be affected by a number of risks and uncertainties, including those described below. The risks and uncertainties described below are not the only risks and uncertainties we face. It is not possible to predict or identify all risk factors that could impact us. For example, the current pandemic related to the COVID-19 coronavirus is causing a dramatic negative impact on the health of citizens globally which has negatively affected the economies and markets around the world. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, results of operations and financial condition could suffer. The risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements.

Risks Related to Our Business

~~Our~~Issues ~~business~~identified ~~may~~by bethe ~~adversely~~FDA ~~affected~~in the FDA Warning Letter and additional product quality issues identified by us will have a negative impact on our business, financial position, operating results and cash flows and will delay the ~~recent~~FDA’s ~~coronavirus~~pre-approval ~~outbreak~~inspection of our newly installed injectable line.

InWe ~~December~~received ~~2019,~~ a ~~novel~~warning ~~strain~~letter offrom ~~coronavirus~~the ~~was~~FDA ~~reported~~in toNovember ~~have~~2019 ~~surfaced~~relating into ~~Wuhan~~our Buena, ~~China.~~NJ Inmanufacturing ~~January~~facility ~~2020,~~resulting ~~this~~from ~~coronavirus~~an ~~spread~~inspection at such facility from April 2, 2019 to ~~other~~May ~~countries~~20, ~~including~~2019 (the ~~United~~“FDA ~~States,~~Warning ~~and~~Letter”). ~~efforts~~The toFDA ~~contain~~Warning ~~the~~Letter ~~spread~~cited issues regarding out-of-specification ~~this~~test ~~coronavirus~~results, ~~intensified.~~our ~~The~~stability ~~outbreak~~program, ~~and~~our ~~any~~complaint ~~preventative~~handling, orand ~~protective~~drug ~~actions~~product ~~that~~validation ~~governments~~issues. orWe weinvestigated ~~may~~the ~~take~~issues inwith ~~respect~~the assistance of ~~this~~a ~~coronavirus~~consultant, ~~may~~responded ~~result~~to the FDA in aDecember ~~period~~2019 ofand ~~business~~March ~~disruption~~2020, ~~reduced~~and ~~customer~~submitted ~~traffic~~a ~~and~~final ~~reduced~~closeout ~~operations~~letter on April 12, 2020. ~~Any~~On ~~resulting~~August ~~financial~~13, ~~impact~~2020, ~~cannot~~we bereceived ~~reasonably~~an ~~estimated~~additional atcomment ~~this~~letter ~~time~~from ~~but~~the ~~may~~FDA ~~materially~~in ~~affect~~which ~~our~~the ~~business,~~FDA ~~financial~~indicated ~~condition,~~that ~~results~~it ofhad ~~operations,~~reviewed our responses and ~~cash~~deemed ~~flows.~~them ~~The~~to ~~extent~~be inadequate as we failed to ~~which~~address and/or provide supporting documentation to several of the ~~coronavirus~~concerns ~~impacts~~raised ~~our~~in ~~results~~the ~~will~~FDA ~~depend~~Warning onLetter. ~~future~~We ~~developments~~have since submitted response letters to the FDA outlining certain changes in our practices, ~~which~~submitting ~~are~~additional ~~highly~~documentation ~~uncertain~~to support previous and ~~cannot~~ongoing beindependent ~~predicted~~assessments, ~~including~~providing ~~new~~updates ~~information~~to ~~which~~our ~~may~~organizational ~~emerge~~structure, ~~concerning~~and ~~the~~providing ~~severity~~additional ofdetail ~~the~~on ~~coronavirus~~ongoing ~~and~~remediation ~~the~~projects ~~actions~~(including comprehensive product quality assessments) to ~~contain~~ensure ~~the~~all ~~coronavirus~~of orour ~~treat~~products ~~its~~are ~~impact~~safe, ~~among~~effective ~~others~~and compliant.

WeAs ~~may~~part ~~need~~of our efforts to ~~raise~~remediate ~~additional~~the ~~capital~~issues identified in the FDA Warning Letter and to strengthen our quality systems, we undertook a comprehensive review of all of our products that we completed in the fourth quarter of 2020. While the review did not identify material issues with many of our products, it did identify issues of non-conformance with respect to certain products, which has resulted in recalls and halting the production of certain products, that we are actively reviewing and remediating. As a result, there have been, and we believe there will continue to be, ~~required~~supply disruptions or process changes with respect to ~~operate~~these products including product recalls, long-term production pauses, short-term clear path to market production pauses, and ~~grow~~continued production with minor process corrections. We believe disruptions with respect to certain of our products and the diversion of resources to remediate the product quality issues will have a negative impact on our business, financial position, operating results and cash flows for the fourth quarter of 2020 and during 2021, including reducing revenue, negatively impacting operating/(loss), and possibly resulting in impairment and other charges. Further, we ~~may~~anticipate ~~not~~that bethe ~~able~~FDA’s issuance of the FDA Warning Letter and review of our processes will continue to ~~raise~~delay ~~capital~~the FDA’s pre-approval inspection for commercial production on ~~terms~~the ~~acceptable~~newly installed injectable line at our Buena, NJ facility. The continued failure to address the issues identified by the FDA in the FDA Warning Letter and those subsequently identified by us orin our comprehensive product quality review as well as the continued delay in obtaining the FDA’s pre-approval inspection for commercial production on the newly installed injectable line at ~~all~~the Buena, NJ facility will have a negative impact on our business, financial position, operating results and cash flows.

~~Operating~~The ~~our~~ongoing ~~business~~COVID-19 ~~and~~pandemic ~~maintaining our growth efforts will require additional cash outlays~~ and ~~capital~~actions ~~expenditures.~~taken Ifin ~~cash~~response ~~on hand and cash generated from operations are not sufficient~~ to ~~meet~~it ~~our~~may ~~cash~~result ~~requirements,~~in ~~we will need to seek~~ additional ~~capital,~~disruptions ~~potentially through debt or equity financings,~~ to ~~fund~~ our growth. We cannot assure you that we will be able to raise needed cash on terms acceptable to the Company, our significant stockholders, or at all. Financings may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the current price per share of our common stock. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of common stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business ~~or even stay in business~~operations. ~~The equity and lending markets have been and will most likely continue to be negatively impacted for an unknown period of time due to the COVID-19 pandemic.~~

~~There~~Our isbusiness ~~substantial~~and ~~doubt~~operations, ~~about~~including ~~our~~but ~~ability~~not limited to ongoing or planned research and development activities, have been adversely affected by the ongoing COVID-19 pandemic, which has also caused significant disruption in the operations of third parties upon which we rely. The COVID-19 pandemic and actions taken by governments, businesses, and individuals in response to it (including executive orders, shelter-in-place orders and work-from-home policies) have had effects that have and may continue asto anegatively ~~going~~impact ~~concern~~productivity and disrupt our business. For example, in response to public health directives and orders, we have implemented work-from-home policies for all non-production employees and adjusted our production schedule to concentrate on high demand or low stock product. Additionally, we initiated a reduction in force at our Buena, NJ

~~The~~manufacturing ~~following~~facility ~~negative~~and ~~conditions~~shifted our research and ~~events~~development ~~raise~~operation ~~substantial~~being ~~doubt~~performed ~~about~~in our ~~ability~~Tallinn, toEstonia ~~continue~~office asto aour ~~going~~manufacturing ~~concern~~facility asin ~~of December 31~~Buena, ~~2019:~~NJ.

WeThese ~~incurred significant losses~~ and ~~generated negative cash flows from operations in recent years and expect to continue to incur losses and generate negative cash flow for the foreseeable future. As a result~~similar, ~~we had an accumulated deficit of $121.5 million. total principal amount of outstanding borrowings of $214.0 million,~~ and ~~limited~~perhaps ~~capital~~more ~~resources to fund ongoing operations at December 31~~severe, ~~2019.~~disruptions ~~Our~~in ~~available capital resources may not be sufficient for us to continue to meet~~ our ~~obligations~~operations ascould ~~they~~negatively ~~become~~impact ~~due over the next twelve months if we cannot improve~~ our operating results or increase our operating cash inflows. In the event these capital resources are not sufficient, we may need to raise additional capital through the sale of equity or debt securities, enter into strategic business ~~collaboration agreements with other companies~~, ~~seek~~financial ~~other funding facilities~~position, or sell assets. However, we cannot provide assurances that additional capital will be available on acceptable terms or at all. Moreover, if we are unable to meet our obligations when they become due over the next twelve months through our available capital resources, or obtain new sources of capital when needed, we may have to delay expenditures, reduce the scope of manufacturing operations, reduce or eliminate one or more of our development programs, make significant changes to our operating ~~plan,~~results orand ~~cease~~cash ~~operations~~flows.

If COVID-19 continues to spread in the United States and elsewhere, we may experience additional disruptions that could severely impact our business and development activities, including, but not limited to:

We•delays ~~are subject to certain financial covenants as set forth~~ in ~~the~~necessary ~~April~~interactions 6,with 2020 amendments to the Senior Credit Facilities. These financial covenants include a trailing twelve months (“TTM”) Minimum Revenue covenant that is required to be met each quarterly period from March 31, 2020 through December 31, 2020, a TTM Minimum Adjusted EBITDA that is required to be met each quarterly period from March 31, 2021 through maturity, and aapprovals minimum liquidity covenant tested at all times through the term of the agreement. These amendments supersede the financial covenants included in the original and amended agreements disclosed in Note 6 – Debt. In the event that we are unable to comply with these covenants, or obtain a waiver from ~~our lenders,~~ the ~~lender~~FDA ~~shall have the right, but not the obligation, to permanently reduce the commitment in whole or in part or to declare all or any portion of the outstanding balance due~~ and payable. Furthermore, in the event that outstanding balances under the Ares Credit agreements are declared due and payable by the lender, the lenders of the 2023 Series A and Series B Unsecured Convertible Notes shall have the right, but not the obligation, to declare all of the outstanding balance due and payable as well. We do not currently have available liquidity to repay these outstanding borrowings in the event of a default. If we are unable to raise additional capital to meet these obligations, we may have to seek other ~~strategic~~regulatory ~~alternatives, including ceasing our operations.~~authorities;

In•strain ~~June~~on ~~2019, we received a de-listing notice from the NASDAQ due to~~ our ~~share~~suppliers ~~price~~or ~~being~~other ~~below~~third ~~$1.00 for 30 consecutive trading days. The notice specified that our share price must trade above $1.00 per share for ten consecutive trading days prior to December 2~~parties, ~~2019~~possibly inresulting order to prevent our common stock from being de-listed. For the 180 days preceding December 2, 2019, our share price remained below $1.00. We requested a second 180-day extension. NASDAQ denied our request and we chose to file for an appeal. We were granted a hearing date for the end of January 2020. Subsequent to the appeal hearing, NASDAQ set a deadline of April 17, 2020 for us to regain compliance with NASDAQ’s continuing listing requirements. In early March 2020, the COVID-19 global pandemic triggered a significant decline in ~~global~~supply ~~capital markets~~disruption, ~~including~~or ~~NASDAQ. In~~customer ~~light~~delays of this significant decline, we requested NASDAQ to reconsider the April 17, 2020 deadline. NASDAQ agreed to our request and set a new deadline to regain compliance by June 1, 2020. In January 2020, our Board of Directors and shareholders approved a reverse stock split in ~~the~~purchases ~~range~~or ofpayments ~~any whole number between five (5) and ten (10) to one (1). While we believe that the reverse stock split will ultimately increase our share price above $1.00~~ for ~~the required ten consecutive trading days, we can provide no assurances that~~ our shares will trade above $1.00 per share for the required time period. A de-listing from the NASDAQ would be a “Fundamental Change” under the Company’s 2023 Series A and Series B Unsecured Convertible Notes which triggers a right by the holders to require the Company repurchase the Convertible Notes. In such an event, the Company would need to seek financing to repurchase the Convertible Notes and there is no guarantee that such financing would be available or on terms acceptable to the Company. If noteholders demanded a repurchase of the notes and the Company could not finance the repurchase, it would be in default under the Indentures governing the Convertible Notes, and in that event the lenders of the Ares Credit agreements would have the right, but not the obligation, to declare all of the outstanding balance under those agreements due and payable as well. Therefore, in the event of the Company’s shares are de-listed from the NASDAQ, the Company would likely have to seek some combination of waivers from its lenders and noteholders and seek new capital through the sale of equity or debt securities. If the Company is unable to obtain such waivers or raise new capital to meet these obligations if they become due, it may have to seek other strategic alternatives, including ceasing operations.products;

•delays in manufacturing of our pharmaceutical products;

•decreases in dermatology visits and thus patient demand for our topical pharmaceutical products; and

•the ability to raise capital when needed on acceptable terms, if at all.

We rely on a limited number of customers for a large portion of our revenues.

We depend on a limited number of customers for a large portion of our revenue. We have ~~two~~three customers that accounted for 41approximately 47% of our revenue for the ~~year~~twelve months ended December 31, ~~2019~~2020, and ~~three~~we ofhave ~~our~~two customers that accounted for ~~an aggregate of 54~~41% of our revenue for the year ended December 31, ~~2018~~2019. The loss of one or more of these customers could have a significant impact on our revenues and harm our business, results of operations and cash flows.

Due to our dependence on a limited number of products, our business will be materially adversely affected if these products do not perform as well as expected.

We expect to generate a significant portion of our total revenues and gross margin from the sale of a limited number of products. While we continue to diversify our product portfolio, none of our products accounted for more than 10% of our revenue for the twelve months ended December 31, 2020, and one of our products accounted for 15% of our revenue for the year ended December 31, 2019. Any material adverse developments, including increased competition, loss of customers, pricing pressures and supply shortages, with respect to the sale or use of our products and prospective products, or our failure to successfully introduce such products, could have a material adverse effect on our revenues and gross margin.

The pharmaceutical industry in which we operate is intensely competitive. We are particularly subject to the pressures of direct competition. For example, the competition we encounter may have a negative impact upon the prices we may charge for our products, the market share of our products and our revenue and profitability.

20The pharmaceutical industry in which we operate is intensely competitive. The competition that we encounter has an effect on our product prices, market share, revenue and profitability. Depending upon how we respond to this competition, its effect may be materially adverse to us. We compete with, among others, the original manufacturers of the brand-name equivalents of our generic products, and other generic drug manufacturers.

~~The~~Most ~~pharmaceutical~~of ~~industry~~the inproducts ~~which~~that we ~~operate~~are isdeveloping ~~intensely~~are ~~competitive~~either generic drugs or products without patent protection. ~~The~~These drugs are therefore more subject to direct competition ~~that~~than wepatented ~~encounter~~products. ~~has~~In anaddition, ~~effect~~because onmany of our ~~product~~competitors ~~prices~~have substantially greater financial, ~~market~~production ~~share~~and research and development resources, ~~revenue~~substantially larger sales and ~~profitability.~~marketing ~~Depending~~organizations, ~~upon~~and ~~how~~substantially greater name recognition than we ~~respond~~have, we are particularly subject to ~~this~~the ~~competition,~~risks ~~its~~inherent ~~effect~~in competing with them. We may not be ~~materially~~able ~~adverse~~ to ussuccessfully develop or introduce new products that are less costly than those of our competitors or offer purchasers of our products payment and other commercial terms as favorable as those offered by our competitors, any of which may adversely impact our financial condition, operating results and cash flows.

We compete with:

•the original manufacturers of the brand-name equivalents of our generic products; and

•other generic drug manufacturers.

Most of the products that we are developing are either generic drugs or products without patent protection. These drugs are therefore more subject to direct competition than patented products. In addition, because many of our competitors have substantially greater financial, production and research and development resources, substantially larger sales and marketing organizations, and substantially greater name recognition than we have, we are particularly subject to the risks inherent in competing with them. For example, many of our competitors may be able to develop products and processes competitive with, or superior to, our own. Furthermore, we may not be able to successfully develop or introduce new products that are less costly than those of our competitors or offer purchasers of our products payment and other commercial terms as favorable as those offered by our competitors.

Furthermore, in the current political climate in which drug prices are a focus of the current administration, Congress, government and private payors, and the public more broadly, we cannot predict whether new legislative, regulatory, or other measures related to drug pricing may be enacted. If enacted, such drug pricing measures could have an impact on our gross margins from product sales, which could significantly and adversely impact our financial condition and cash flows.

For example, on December 20, 2019, President Trump signed the Further Consolidated Appropriations Act for 2020 into law (P.L. 116-94) that includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 or the “CREATES Act.” The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a Risk Evaluation and Mitigation Strategy, or REMS, for certain products, to deny generic product developers access to samples of brand products. Because generic product developers like our company need samples to conduct bioequivalence testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic products. To remedy this concern, the CREATES Act establishes a private cause of action that permits a generic product developer to sue the brand manufacturer to compel it to furnish the necessary samples on “commercially reasonable, market-based terms.” Whether and how generic product developers will use this new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on the market entry or timeline for our future commercial products are unknown.

As our competitors introduce their own generic equivalents of our generic pharmaceutical products, our revenues and gross margin from such products may decline, potentially rapidly.

Revenues and gross margin derived from generic pharmaceutical products often follow a pattern based on regulatory and competitive factors that we believe are unique to the generic pharmaceutical industry. As the patent(s) for a brand name product and the statutory marketing exclusivity period (if any) expires, the first generic manufacturer to receive regulatory approval for a generic equivalent of the product often is able to capture a substantial share of the market. However, as other generic manufacturers receive regulatory approvals for identical competing products, that market share, and the price of that product, may decline depending on several factors, including the number of competitors, the price of the brand product and the pricing strategy of the new competitors. ~~In addition~~Further, in the ~~FDA~~event ~~has~~we ~~continued~~encounter todelays ~~shorten~~in ~~the~~testing ~~review~~ and ~~response~~manufacturing ~~time~~new topharmaceutical ~~certain ANDAs~~products, assubmitting aapplications ~~result of their guidelines established under GDUFA~~for, and itobtaining, ~~has recently finalized policies to implement the Competitive Generic Therapy (“GCT”) designation pathway created by Congress in 2017 as part of FDARA. Based on these trends and~~ regulatory ~~developments~~approval, ~~competitors~~and ~~could~~commercializing ~~potentially~~new ~~enter the markets in which we compete more quickly. We cannot provide assurance that we will be able to continue to develop such~~ products ~~or that the number of competitors with such products will not increase to such an extent that we may stop marketing a product for which we previously obtained approval~~, ~~which may have a material adverse impact on~~ our ~~revenues~~competitors ~~and gross margin.~~

~~Our~~may ~~strategy~~successfully ~~depends~~launch oncompeting products ahead of us, reducing our competitive advantage and ability to successfully ~~develop~~market and ~~launch~~sell ~~new~~our ~~pharmaceutical~~products. We cannot provide assurance that we will be able to continue to develop such products ~~ahead~~or that the number of competitors with such products will not increase to such an extent that we may stop marketing a product for which we previously obtained approval, which may have a material adverse impact on our ~~competitors~~revenues and gross margin.

Our continued growth is dependent upon our ability to develop and commercialize products in a timely manner. We may encounter delays in testing and manufacturing new pharmaceutical products, submitting applications for regulatory approval,

receiving approval from the relevant authorities and commercializing new products. This process is costly and time-consuming. Delays at any stage could prevent us from successfully launching new products ahead of our competitors and could have a material adverse effect on our business, financial condition and results of operations. The recent COVID-19 pandemic may delay our applications in both submissions and approvals.

If pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and other efforts, sales of our generic products may be adversely impacted.

Many pharmaceutical companies increasingly have used state and federal legislative and regulatory means to delay generic competition, including competition from generic manufacturers such as us. These efforts have included, among others:

•pursuing new patents for existing products that may be granted just before the expiration of earlier patents, which could extend patent protection for additional years or otherwise delay the launch of generics;

•selling the brand product as an “authorized generic,” either by the brand company directly, through an affiliate or by a marketing partner;

•using the Citizen Petition process to request amendments to FDA standards or otherwise delay generic drug approvals;

•seeking changes to the U.S. Pharmacopeia, an FDA, and industry recognized compendia of drug standards;

•attaching patent extension amendments to non-related federal legislation;

•engaging in state-by-state initiatives to enact legislation that restricts the substitution of some generic drugs, which could have an impact on products that we are developing; and

•seeking patents on methods of manufacturing certain active pharmaceutical ingredients.

If pharmaceutical companies or other third parties are successful in limiting the use of generic products through these or other means, our sales of our generic products may decline., Ifwhich wemay ~~experience~~adversely aimpact ~~material decline in generic product sales,~~ our results of operations, financial condition and cash flows may be significantly and adversely impacted.

Our generics business also faces increasing competition from brand-name manufacturers that do not face any significant regulatory approval or other barriers to enter into the generics market.

Our generics business also faces increasing competition from brand-name manufacturers that do not face any significant regulatory approval or other barriers to enter into the generics market. These brand-name companies sell “authorized generic” versions of their products to the market directly, acquire or form strategic alliances with our competitor generic pharmaceutical companies, or grant them rights to sell “authorized generics.” Moreover, brand-name companies continually seek new ways to delay the introduction of generic products and decrease the impact of generic competition, such as filing new patents on drugs whose original patent protection is about to expire, developing patented controlled-release products, changing product claims and product labeling, or developing and marketing as over-the-counter products those branded products that are about to face generic competition, when feasible. Our competitors, which include major multinational corporations with substantially more resources than we have, are consolidating in both the branded and generics industries, and the strength of the combined companies could affect our competitive position in all of our business areas. Furthermore, if one of our competitors or its customers acquires any of our customers or suppliers, we may lose business from the customer or lose a supplier of a critical raw material.

~~Our~~Sales ~~business~~of ~~and~~our ~~operations~~products ~~have~~may ~~experienced~~continue ~~rapid~~to ~~growth,~~be ~~and~~adversely ifaffected weby dothe ~~not~~continuing ~~appropriately~~consolidation ~~manage~~of ~~any~~our ~~future~~distribution ~~growth,~~network ~~our~~and ~~business~~the ~~will~~concentration beof ~~adversely~~our ~~affected~~customer base.

WeOur ~~have~~principal ~~experienced~~customers ~~rapid~~are ~~growth~~wholesale ~~over~~drug ~~the~~distributors ~~last~~and ~~several~~major ~~years,~~retail ~~and~~drug ~~additional~~store ~~growth~~chains. ~~through~~These ~~acquisitions~~customers iscomprise ~~possible~~a significant part of the distribution network for pharmaceutical products in the ~~future~~U. ~~Such~~S. ~~growth~~This ~~has~~distribution ~~put~~network is continuing to undergo significant ~~demands~~consolidation onmarked ~~our~~by ~~management~~mergers and ~~infrastructure. Our~~acquisitions, ~~success~~alliances ~~will~~and ~~depend~~partnerships inamong ~~part~~wholesale ~~upon~~distributors ~~our~~and ~~ability~~the togrowth ~~manage~~of ~~this~~large ~~growth~~retail ~~effectively. As~~drug westore ~~continue~~chains. toAs ~~grow~~a result, wea ~~must~~small ~~improve~~number ~~our~~of ~~operational,~~large ~~financial~~wholesale ~~and~~distributors ~~management~~control ~~controls~~a ~~and~~significant ~~our~~share ~~reporting~~of ~~systems~~the market, and ~~procedures. We~~the ~~must~~number ~~ensure~~of ~~that~~independent ~~our~~drug ~~policies~~stores and ~~procedures~~small ~~evolve~~drug tostore ~~reflect~~chains ~~our~~has ~~current operations~~decreased. We ~~must~~expect ~~also~~that ~~continue~~consolidation toof ~~effectively~~drug ~~manage~~wholesalers ~~existing employees~~ and toretailers ~~hire,~~will ~~train~~increase pricing and ~~manage~~other ~~new~~competitive ~~employees~~pressures ason ~~needed~~drug manufacturers. ~~Any~~ ~~failure~~In toaddition, ~~expand~~we ~~these~~generally ~~areas~~do ~~and~~not ~~implement~~enter ~~appropriate~~into ~~procedures~~long-term ~~and~~supply ~~controls~~agreements inwith anour ~~efficient~~customers ~~manner~~that ~~and~~would atrequire athem ~~pace~~to ~~consistent~~purchase ~~with~~ our ~~business~~products. ~~objectives~~The ~~could~~result of these developments may have a material adverse ~~effect~~impact on our business, financial ~~condition,~~position and results of operations, and ~~cash~~could ~~flows.~~cause ~~The~~the ~~recent~~market ~~COVID-19~~value ~~pandemic~~of ~~may~~our ~~introduce~~common ~~additional~~stock ~~challenges~~to ~~in the retention and hiring of key personnel~~decline.

22Lack of availability, issues with quality or significant increases in the cost of raw materials used in manufacturing our products, and inventory challenges could adversely impact our financial condition and operating results.

~~Sales~~Affordable, ofhigh quality raw materials and packaging components are essential to our business due to the nature of the products ~~may~~we ~~continue~~manufacture. toWe bemaintain ~~adversely~~several ~~affected~~single-source bysupplier relationships, either because alternative sources are not available or because the ~~continuing~~relationship ~~consolidation~~is advantageous due to regulatory, performance, quality, support or price considerations. In this type of ~~our~~limited-supplier ~~distribution~~situation, ~~network~~increased prices, rationing and/or shortages can occur. In response to the ~~concentration~~situation, ofwe ~~our~~try ~~customer~~to ~~base.~~identify ~~The~~alternative ~~result~~materials ofor suppliers for such ~~developments~~raw materials and finished goods like containers and closures. However, FDA requirements for products approved through the ANDA or NDA process could ~~have~~substantially alengthen the time for approval of an alternate material ~~adverse~~source. ~~effect~~Certain onmaterial shortages and approval of alternate sources could adversely affect our ~~business,~~ability ~~financial~~to ~~position~~develop, commercialize and ~~results~~sell certain of ~~operations~~our products and ~~could~~may ~~cause~~adversely ~~the~~affect ~~market~~our ~~value~~business ofand financial results, which may be more significant if such single-supplier issues affect our ~~common~~higher ~~stock~~volume toor ~~decline~~more profitable products.

~~Our~~In ~~principal~~addition, ~~customers~~raw ~~are~~materials ~~wholesale~~purchased ~~drug~~from ~~distributors~~third ~~and~~parties, ~~major~~including ~~retail~~those ~~drug~~from ~~store~~foreign ~~chains.~~countries, ~~These~~may ~~customers~~contain ~~comprise~~counterfeit aingredients ~~significant~~or ~~part~~other ofadulterants. ~~the~~We ~~distribution~~maintain ~~network~~a ~~for~~strict ~~pharmaceutical~~program ~~products~~of inverification ~~the~~and ~~U.S.~~product ~~This~~testing ~~distribution~~throughout ~~network~~the isingredient ~~continuing~~sourcing toand ~~undergo~~manufacturing ~~significant~~process ~~consolidation~~to ~~marked~~identify bypotential ~~mergers~~counterfeit ~~and acquisitions~~ingredients, ~~alliances~~adulterants and ~~partnerships~~toxic ~~among~~substances. ~~wholesale~~Nevertheless, ~~distributors~~discovery ~~and~~of ~~the~~previously ~~growth~~unknown ofproblems ~~large~~with ~~retail~~the ~~drug~~raw ~~store~~materials ~~chains.~~or Asproduct amanufacturing ~~result~~processes, aor ~~small~~new ~~number~~data ofsuggesting ~~large~~an ~~wholesale~~unacceptable ~~distributors~~safety ~~control~~risk aassociated ~~significant~~therewith, ~~share~~could ofresult ~~the~~in ~~market,~~a ~~and~~voluntary ~~the~~or ~~number~~mandatory withdrawal of ~~independent~~a ~~drug~~potentially ~~stores~~contaminated ~~and~~product ~~small~~from ~~drug~~the ~~store~~marketplace, ~~chains~~either ~~has~~temporarily ~~decreased~~or permanently. WeIn ~~expect~~addition, ~~that~~because ~~consolidation~~regulatory ofauthorities ~~drug~~must ~~wholesalers~~generally ~~and~~approve ~~retailers~~raw ~~will~~material ~~increase~~sources ~~pricing~~for ~~and~~pharmaceutical ~~other~~products, ~~competitive~~changes ~~pressures~~in onraw ~~drug~~material ~~manufacturers.~~suppliers Inor ~~addition,~~ the ~~Company~~quality ~~generally~~of ~~does~~their ~~not~~products ~~enter~~may ~~into~~result ~~long-term~~in ~~supply~~production ~~agreements~~delays ~~with~~or ~~its~~higher ~~customers~~raw ~~that~~material ~~would~~costs. ~~require~~Also, ~~them~~any tofuture ~~purchase~~recall ~~our~~or ~~products.~~removal ~~The~~would result ofin ~~these~~additional ~~developments~~costs to us, may ~~have~~significantly aharm ~~material~~our ~~adverse~~reputation, ~~impact~~and onmay ~~our~~give ~~business,~~rise ~~financial~~to ~~position~~product ~~and~~liability ~~results~~or ofother ~~operations~~litigation, ~~and~~any of which could ~~cause~~have ~~the~~a ~~market~~material ~~value~~adverse ofeffect on our ~~common~~operating ~~stock~~results toand ~~decline~~financial condition.

We face intense competition in the consumer products business.

Our business competes with large, well-financed cosmetic, pharmaceutical and consumer products companies with development and marketing groups that are experienced in the industry and possess far greater resources than those available to us. There is no assurance that we can compete successfully against our competitors or that we can develop and market products that will be favorably received in the marketplace.

Lack of availability, issues with quality or significant increases in the cost of raw materials used in manufacturing our products could adversely impact our profit margins and operating results.

Affordable, high quality raw materials and packaging components are essential to our business due to the nature of the products we manufacture. Raw materials and packaging components are generally available from multiple suppliers. Supplies of certain raw materials, and finished goods purchased by us are limited, or are available from one or only a few suppliers that have been pre-approved by the FDA for use in the manufacture of our products. In this type of limited-supplier situation, increased prices, rationing and/or shortages can occur. In response to the situation, we try to identify alternative materials or suppliers for such raw materials and finished goods like containers and closures. However, FDA requirements for products approved through the ANDA or NDA process could substantially lengthen the time for approval of an alternate material source. Certain material shortages and approval of alternate sources could adversely affect our financial results. The rapid increase in cost of many raw materials from inflationary forces, such as increased energy costs, and our ability or inability to pass on these increases to our customers, could have a material impact on our financial results.

In addition, raw materials purchased from third parties, including those from foreign countries, may contain counterfeit ingredients or other adulterants. We maintain a strict program of verification and product testing throughout the ingredient sourcing and manufacturing process to identify potential counterfeit ingredients, adulterants and toxic substances. Nevertheless, discovery of previously unknown problems with the raw materials or product manufacturing processes or new data suggesting an unacceptable safety risk associated therewith, could result in a voluntary or mandatory withdrawal of a potentially contaminated product from the marketplace, either temporarily or permanently. In addition, because regulatory authorities must generally approve raw material sources for pharmaceutical products, changes in raw material suppliers or the quality of their products may result in production delays or higher raw material costs. Also, any future recall or removal would result in additional costs to us, and may give rise to product liability or other litigation, either of which could have a material adverse effect on our operating results.

Our products, and the raw materials used to make those products, generally have limited shelf lives. Our inventory levels are based, in part, on expectations regarding future sales. We may experience build-ups in inventory if sales slow. Any significant shortfall in sales may result in higher inventory levels of raw materials and finished products, thereby increasing the risk of inventory spoilage and corresponding inventory write-downs and write-offs, which may materially and adversely affect our results of operations. Additionally, labeling changes required for regulatory compliance could render packaging inventories obsolete. Cargo thefts and/or diversions and economically or maliciously motivated product tampering in store shelves may be experienced from time to time, causing unexpected shortages.

~~The~~We ~~recent~~are ~~COVID-19~~subject ~~pandemic~~to ~~may~~stringent ~~introduce~~regulatory ~~new~~requirements ~~challenges~~related into ~~sourcing~~environmental ~~raw~~protection ~~materials for our products either from our existing or new suppliers~~ and ~~may~~hazardous ~~negatively~~waste ~~influence the cost of these raw materials~~disposal.

23In the United States, we and our suppliers of raw materials are also subject to regulation under the Occupational Safety and Health Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other current and potential future federal, state or local regulations. In Canada, we and our suppliers of raw materials are also subject to regulation under the Hazardous Products Act, Controlled Products Regulations, Consumer Product Safety Act, Canadian Environmental Protection Act and other current and potential future federal, provincial/territorial or local regulations. Failure to adhere to such regulations, by either us or our suppliers, could harm our business and results of operations.

WeIn ~~depend~~addition, onbecause achemical ~~limited~~ingredients ~~number~~are used in the manufacture of ~~suppliers~~our ~~for~~products ~~API.~~and ~~Generally~~due to the nature of the manufacturing process itself, ~~only~~there is a ~~single~~risk ~~source~~of incurring liability for damages caused by or during the storage or manufacture of ~~API~~both isthe ~~qualified~~chemical ingredients and the finished products. We have implemented safety procedures for ~~use~~handling inand ~~each~~disposing ~~product~~of ~~due~~such tomaterials, however, such procedures may not comply with the ~~costs~~standards prescribed by federal, state and ~~time~~local ~~required~~regulations. toEven ~~validate~~if awe ~~second~~follow ~~source~~such safety procedures for handling and disposing of ~~supply~~hazardous materials and chemicals and such procedures comply with applicable law, the risk of accidental contamination or injury from these materials cannot be completely eliminated. ~~Changes~~Although inwe ~~API~~have ~~suppliers~~never ~~must~~incurred ~~usually~~any material liability for damages of that nature, we may be ~~approved~~subject byto liability in the ~~FDA~~future. ~~through~~In addition, while we believe our insurance coverage is adequate, it is possible that a ~~Prior~~successful ~~Approval~~claim ~~Supplement~~would exceed our coverage, requiring us to ~~each~~pay ~~ANDA~~a substantial sum.

WeOur ~~maintain~~operations ~~several~~and ~~single-source~~properties ~~supplier~~are ~~relationships,~~also ~~either~~subject ~~because~~to ~~alternative~~a ~~sources~~wide ~~are~~variety ~~not~~of ~~available~~increasingly orcomplex ~~because~~and ~~the~~stringent ~~relationship~~federal, isstate ~~advantageous~~and ~~due~~local toenvironmental ~~regulatory,~~laws ~~performance,~~and ~~quality~~regulations, ~~support,~~including orthose ~~price~~governing ~~considerations~~the remediation of contaminated soil and groundwater. ~~Unavailability~~Such orenvironmental ~~delivery~~laws ~~delays~~may ofapply ~~single-source~~to ~~components~~conditions at properties and facilities presently or ~~products~~formerly ~~could~~owned ~~adversely~~or ~~affect~~operated ~~our~~by ~~ability~~us, as well as to ~~ship~~conditions ~~the~~at ~~relevant~~properties ~~product~~at inwhich awastes ~~timely~~or ~~manner.~~other ~~The~~contamination ~~effect~~attributable ofto ~~unavailability~~us orhave ~~delivery~~been ~~delays~~sent ~~would~~or beotherwise ~~more~~come ~~severe~~to ifbe ~~associated~~located. ~~with~~One of our ~~higher~~former ~~volume~~facilities oris ~~more~~currently ~~profitable~~undergoing ~~products.~~remediation ~~Even~~of ~~where~~environmental ~~alternative~~contamination. ~~sources~~Based ofon ~~supply~~information ~~are~~provided ~~available,~~to ~~qualifying~~us ~~the~~from ~~alternate~~our ~~suppliers~~environmental consultants and ~~establishing~~what ~~reliable~~is ~~supplies~~known ~~could~~to ~~cost~~date, ~~more~~we orbelieve ~~could~~the ~~result~~reserves inare ~~delays~~sufficient ~~and~~for athe ~~loss~~remaining remediation of ~~revenues~~the environmental contamination. AsThere is a ~~result~~possibility, however, that the ~~loss~~remediation ofcosts amay ~~single-source~~exceed ~~supplier~~our ~~could~~estimates. ~~have~~In aaddition, ~~material~~we ~~adverse~~can ~~effect~~give onno ~~our~~assurance ~~results~~that the future cost of ~~operations~~compliance with existing environmental laws will not give rise to additional significant expenditures or liabilities that would be material to us. ~~The~~Future ~~recent~~events, ~~COVID-19~~such ~~pandemic~~as ~~may~~new ~~create~~information, ~~local~~changes ~~issues~~in ~~for~~existing ~~our~~environmental ~~single~~laws ~~source~~or ~~API~~their ~~suppliers~~interpretation, and ~~introduce~~more ~~delays~~vigorous inenforcement ~~our~~policies ~~manufacturing~~of ~~process.~~federal,

~~Incidents~~state ~~related~~or tolocal ~~hazardous~~regulatory ~~materials~~agencies, ~~could~~may ~~materially~~have ~~adversely~~a ~~affect~~material ~~our~~adverse ~~reputation,~~effect on our business, financial condition, ~~operating~~and results ~~and~~of ~~cash flows~~operations.

~~There~~We are ~~portions~~subject ofto ~~our~~extensive ~~operations~~government ~~that~~regulation ~~require~~by the ~~controlled~~FDA, ~~use~~Health ofCanada ~~hazardous materials. Although we are diligent in designing~~ and ~~implementing~~other ~~safety procedures to comply with the standards prescribed by~~ federal, state, provincial/territorial and local ~~regulations,~~regulatory ~~the risk of accidental contamination of property or injury to individuals from these materials cannot be completely eliminated~~authorities. In the event of such an incident, we could be liable for any damages that result, which could materially adversely affect our reputation, business, financial condition, operating results and cash flows.

WeThe manufacturing, processing, formulation, packaging, labeling, testing, storing, distributing, marketing, advertising and sale of our products, among other things, are subject to ~~stringent~~extensive ~~regulatory~~regulation ~~requirements~~by ~~related~~one toor ~~environmental~~more ~~protection~~U.S. or Canadian agencies, including the FDA, the Federal Trade Commission and ~~hazardous~~the ~~waste~~Consumer ~~disposal~~Products Safety Commission, Health Canada, as well as by several state, provincial/territorial and local agencies in localities where our products are stored, distributed or sold. ~~Failure~~In toaddition, ~~adhere~~we tomanufacture ~~such~~and ~~requirements~~market ~~could~~certain ~~harm~~of our ~~business~~products in accordance with standards set by organizations, such as the USP, British Pharmacopeia, or BP, scientific nonprofit organizations that sets standards for the identity, strength, quality, and ~~results~~purity of ~~operations~~medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide. Adherence to USP and BP published drug standards are prescribed by the FDA and the Canadian Food and Drug Regulations, as applicable.

InThe FDA and Health Canada regulate the ~~United~~testing, ~~States~~manufacture, welabeling, marketing and ~~our~~sale ~~suppliers~~ of ~~raw~~pharmaceutical ~~materials~~products. ~~are~~Approval ~~also~~by ~~subject~~the toFDA ~~regulation~~or ~~under~~Health ~~the~~Canada ~~Occupational~~is ~~Safety~~required ~~and~~before ~~Health~~any ~~Act~~new drug, ~~the~~including ~~Toxic~~any ~~Substances~~new ~~Control~~generic ~~Act~~drug, may be marketed or sold in the ~~Resource~~United ~~Conservation~~States ~~and~~or ~~Recovery~~Canada. ~~Act~~To ~~and~~obtain ~~other~~approval ~~current~~from the FDA and ~~potential~~Health ~~future~~Canada ~~federal,~~for ~~state~~our orproduct ~~local~~candidates ~~regulations.~~that ~~Failure~~are togeneric ~~adhere~~versions toof ~~such~~brand-name ~~regulations~~drugs, bywe ~~either~~intend usto orsubmit ~~our~~an ~~suppliers,~~Abbreviated ~~could~~New ~~harm~~Drug ~~our~~Application ~~business~~(ANDA) in the United States and ~~results~~an ofAbbreviated ~~operations.~~New InDrug ~~addition~~Submission (ANDS), ~~our~~or ~~analytical~~Drug ~~department~~Identification ~~uses~~Number ~~certain~~Application ~~hazardous~~(DINA) ~~materials~~in ~~and~~Canada. ~~chemicals~~These inrequire ~~limited~~us ~~and~~to ~~controlled~~demonstrate ~~quantities.~~to Wethe ~~have~~FDA ~~implemented~~or ~~safety~~Health ~~procedures~~Canada ~~for~~that ~~handling~~each ~~and~~generic ~~disposing~~product ofcandidate ~~such~~has ~~materials~~the same active ingredient, ~~however~~strength, ~~such~~dosage ~~procedures~~form, ~~may~~route ~~not~~of ~~comply~~administration ~~with~~and intended use as a corresponding approved drug product and is bioequivalent to the ~~standards~~branded ~~prescribed~~drug byproduct ~~federal~~(approved under a New Drug Application (NDA) in the United States, ~~state~~or ~~and~~a ~~local~~New ~~regulations.~~Drug ~~Even~~Submission if(NDS) weor ~~follow~~DINA ~~such~~in ~~safety~~Canada), ~~procedures~~meaning ~~for~~that ~~handling~~there ~~and~~is ~~disposing~~no ofsignificant ~~hazardous~~difference ~~materials~~between ~~and~~the ~~chemicals~~drugs in their rate and ~~such~~extent ~~procedures~~of ~~comply~~absorption ~~with~~in ~~applicable~~the ~~law~~body. However, if the ~~risk~~FDA ofdetermines ~~accidental~~that ~~contamination~~an ANDA, or ~~injury~~Health ~~from~~Canada ~~these~~determines ~~materials~~that ~~cannot~~an beANDS ~~completely~~or ~~eliminated.~~DINA, Infor ~~the~~a ~~event~~generic ofdrug ~~such~~product anis ~~accident~~not adequate to support approval, weit could bedeny ~~held~~our ~~liable~~application ~~for~~or ~~any~~request ~~damages~~additional ~~and~~data ~~any~~or ~~such~~information, ~~liability~~which could ~~exceed~~delay approval of the product and impair our ~~resources.~~ability to compete with the brand-name drug product and/or other generic versions of the product

~~Our~~If ~~operations~~our ~~and~~product ~~properties~~candidates ~~are~~receive ~~also~~FDA ~~subject~~or toHealth aCanada ~~wide~~approval ~~variety~~through ofthe ~~increasingly~~ANDA, ~~complex~~ANDS ~~and~~or ~~stringent~~DINA ~~federal~~processes, ~~state~~as ~~and local environmental laws and regulations~~applicable, ~~including those governing~~ the ~~remediation~~labeling ofclaims ~~contaminated soil~~ and ~~groundwater.~~marketing ~~Such~~statements ~~environmental~~that ~~laws~~we ~~may~~can ~~apply~~make tofor ~~conditions~~our atgeneric ~~properties~~drugs ~~and~~are ~~facilities~~generally ~~presently~~limited orto ~~formerly~~the ~~owned~~claims orapproved ~~operated~~ by ~~us,~~the asFDA ~~well as to conditions at properties at which wastes~~ or ~~other~~Canada ~~contamination~~for ~~attributable~~use toin usthe ~~have~~brand-name ~~been~~product’s ~~sent or otherwise come to be located~~label. ~~One~~In ofaddition, ~~our~~following ~~facilities~~regulatory ~~has~~approval, ~~undergone~~the ~~remediation~~labeling, ~~of environmental contamination~~packaging, ~~and~~adverse ~~one~~event ofreporting, ~~our~~storage, ~~facilities~~advertising isand ~~currently~~promotion ~~undergoing~~for ~~remediation~~the ofproduct ~~environmental~~will ~~contamination.~~be ~~The~~subject ~~total~~to ~~estimated~~extensive ~~costs for the clean-up~~ and ~~remediation~~ongoing isregulatory $0requirements.9 ~~million~~Our asongoing ofcompliance ~~December 31,~~with ~~2019,~~these ~~and~~ongoing ~~remaining~~regulatory ~~costs~~requirements ~~accrued~~could atresult ~~December 31,~~in ~~2019~~additional ~~totaled $0.1 million. Based on~~ information ~~provided~~requests ~~to us~~ from ~~our environmental consultants and what is known to date, we believe~~ the ~~reserves~~FDA ~~are~~or ~~sufficient~~Health ~~for~~Canada ~~the~~and ~~remaining~~potentially ~~remediation~~result ofin ~~the environmental contamination. There is~~ a ~~possibility,~~request ~~however,~~from ~~that~~ the ~~remediation~~agency ~~costs~~to ~~may~~conduct ~~exceed~~a ~~our~~product ~~estimates.~~recall Inor ~~addition, we can give no assurance that the future cost of compliance with existing environmental laws will not give rise~~ to ~~additional~~strengthen ~~significant~~warnings ~~expenditures~~ and/or ~~liabilities~~revise ~~that~~other ~~would~~label beinformation ~~material~~about tothe usproduct. ~~Future~~Any ~~events, such as new information, changes in existing environmental laws or their interpretation, and more vigorous enforcement policies~~ of ~~federal,~~these ~~state or local~~ regulatory ~~agencies,~~actions ~~may~~could ~~have~~adversely aaffect ~~material adverse effect on~~ our business, financial condition, ~~and~~ results of operations and cash flows.

InAs ~~Canada~~a manufacturer, weimporter and ~~our~~distributor ~~suppliers~~ of ~~raw~~pharmaceutical ~~materials~~products, ~~are~~we must also ~~subject~~comply towith ~~regulation~~cGMPs, ~~under~~or ~~the~~current ~~Hazardous~~Good ~~Products~~Manufacturing ~~Act~~Practices, ~~Controlled~~which ~~Products~~include ~~Regulations,~~requirements ~~Consumer~~related ~~Product~~to ~~Safety~~production ~~Act.~~processes, ~~Canadian~~quality ~~Environmental~~control ~~Protection~~and ~~Act~~assurance and ~~other~~recordkeeping. ~~current~~Our ~~and~~manufacturing ~~potential~~facilities ~~future~~and ~~federal,~~procedures ~~provincial/territorial~~and orthose ~~local~~of ~~regulations.~~our ~~Failure~~suppliers toare ~~adhere~~subject to ~~such~~periodic ~~regulations,~~inspection by ~~either~~the usFDA or ~~our~~Health ~~suppliers,~~Canada ~~could~~and ~~harm~~foreign ~~our~~regulatory ~~business~~agencies to ensure compliance with cGMP and ~~results~~other ofrequirements ~~operations~~applicable to such products. InAny ~~addition,~~material ~~our~~deviations ~~analytical~~from ~~department~~pharmaceutical ~~uses~~cGMPs ~~certain~~or ~~hazardous~~other ~~materials~~applicable ~~and~~requirements ~~chemicals~~identified induring ~~limited~~such ~~and~~inspections ~~controlled~~may ~~quantities.~~result Wein ~~have~~recalls ~~implemented~~or ~~safety~~other ~~procedures~~enforcement ~~for~~actions, ~~handling~~including warning letters and ~~disposing~~non-compliance ofratings, ~~such~~a ~~materials~~delay or suspension in manufacturing operations, ~~however~~consent decrees or civil or criminal penalties. Further, ~~such~~discovery ~~procedures~~of ~~may~~previously ~~not~~unknown ~~comply~~problems with ~~the~~a ~~standards~~product ~~prescribed~~or bymanufacturer ~~federal,~~may ~~provincial/territorial~~result ~~and~~in ~~local~~restrictions ~~regulations.~~or ~~Even~~sanctions, ifincluding wesuspension ~~follow~~or ~~such~~withdrawal ~~safety~~of ~~procedures~~marketing ~~for~~approvals, ~~handling~~seizures ~~and~~or ~~disposing~~recalls of ~~hazardous~~products ~~materials~~from ~~and~~the ~~chemicals~~market, ~~and~~or ~~such~~civil ~~procedures~~or ~~comply~~criminal ~~with~~fines ~~applicable~~or ~~law~~penalties, ~~the~~any ~~risk~~ of ~~accidental~~which ~~contamination~~could orsignificantly ~~injury~~and ~~from~~adversely ~~these~~affect ~~materials~~supplies ~~cannot~~of beour products.

24The COVID-19 pandemic has introduced additional strains on FDA and Health Canada and has presented uncertainty on the impact this may cause on regulations or the related timeframes pertaining to communication with, or receiving approvals from, FDA and Health Canada.

~~completely~~Our ~~eliminated.~~actual Inor ~~the~~perceived ~~event~~failure ofto ~~such~~comply anwith ~~accident~~U.S. federal and state, weand ~~could~~foreign belaws ~~held~~and ~~liable~~regulations ~~for~~imposing ~~any~~obligations ~~damages~~on how we collect, use, disclose, store and ~~any~~process ~~such~~personal information could result in liability or reputational harm and could ~~exceed~~harm our ~~resources~~business.

~~Future~~In ~~events~~many activities, ~~such~~including asthe ~~new~~conduct ~~information~~of clinical trials, ~~changes~~we inare ~~existing~~subject ~~environmental~~to laws orand ~~their~~regulations ~~interpretation,~~governing ~~and~~data ~~more~~privacy ~~vigorous~~and ~~enforcement~~the ~~policies~~protection of ~~federal,~~health-related ~~provincial/territorial~~and orother ~~local~~personal ~~regulatory~~information. ~~agencies,~~These ~~may~~laws ~~have~~and aregulations ~~material~~govern ~~adverse~~our ~~effect~~processing onof ~~our~~personal ~~business~~data, ~~financial condition and results of operations.~~

including the collection, access, use, analysis, modification, storage, transfer, security breach notification, destruction and disposal of personal data. We ~~are~~must ~~subject~~comply towith ~~extensive~~laws ~~government~~and ~~regulation~~regulations associated with the international transfer of personal data based on the location in which the personal data originates and the location in which it is processed. Complying with the enhanced obligations imposed by the ~~FDA~~General Data Privacy Regulation, or the GDPR, to and other ~~federal~~applicable international and US privacy laws and regulations may result in significant costs to our business and require us to amend certain of our business practices. Further, ~~state~~enforcement actions and ~~local~~investigations by regulatory authorities ~~that~~related ~~increases~~to ~~our~~data ~~costs~~security incidents and privacy violations continue to increase. The future enactment of more restrictive laws, rules or regulations and/or future enforcement actions or investigations could ~~prevent~~have a materially adverse impact on us ~~from~~through ~~marketing~~increased costs or ~~selling~~restrictions on our ~~products~~businesses, and noncompliance could result in regulatory penalties and significant legal liability.

The manufacturing, processing, formulation, packaging, labeling, testing, storing, distributing, marketing, advertising and sale of our products, among other things, are subject to extensive regulation by one or more U.S. agencies, including the FDA, the Federal Trade Commission and the Consumer Products Safety Commission, as well as by several state and local agencies in localities where our products are stored, distributed or sold. In addition, we manufacture and market certain of our products in accordance with standards set by organizations, such as the USP, a scientific nonprofit organization that sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide. USP’s drug standards are enforceable in the United States by the FDA.

The FDA regulates the testing, manufacture, labeling, marketing and sale of pharmaceutical products. Approval by the FDA is required before any new drug, including any new generic drug, may be marketed or sold in the United States. In order to receive approval from the FDA for our product candidates that are generic versions of brand-name drugs, we intend to use the Abbreviated New Drug Application, or ANDA, route, which requires us to demonstrate to the FDA that each generic product candidate has the same active ingredient, strength, dosage form, route of administration and intended use as a corresponding approved drug product and is bioequivalent to the branded drug product (approved under a New Drug Application, or NDA), meaning that there is no significant difference between the drugs in their rate and extent of absorption in the body. However, if the FDA determines that an ANDA for a generic drug product is not adequate to support approval, it could deny our application or request additional data or information, which could delay approval of the product and impair our ability to compete with the brand-name drug product and/or other generic versions of the product.

If our product candidates receive FDA approval through the ANDA process, the labeling claims and marketing statements that we can make for our generic drugs are generally limited to the claims approved by the FDA for use in the brand-name product’s label. In addition, following regulatory approval, the labeling, packaging, adverse event reporting, storage, advertising and promotion for the product will be subject to extensive and ongoing regulatory requirements.

As a manufacturer of pharmaceutical products, we must also comply with cGMPs, or current Good Manufacturing Practices, which include requirements related to production processes, quality control and assurance and recordkeeping. Our manufacturing facilities and procedures and those of our suppliers are subject to periodic inspection by the FDA and foreign regulatory agencies. Any material deviations from pharmaceutical cGMPs or other applicable requirements identified during such inspections may result in recalls or other enforcement actions, including warning letters, a delay or suspension in manufacturing operations, consent decrees or civil or criminal penalties. Further, discovery of previously unknown problems with a product or manufacturer may result in restrictions or sanctions, including suspension or withdrawal of marketing approvals, seizures or recalls of products from the market, or civil or criminal fines or penalties, any of which could significantly and adversely affect supplies of our products. On November 26, 2019 FDA issued us a Warning Letter following an inspection of our manufacturing facility at 105 Lincoln Avenue, Buena, New Jersey, that identified several cGMP violations. We are continuing to work diligently to remediate all issues cited by the FDA and hope to close out this inspection in the coming months.

The recent COVID-19 pandemic has introduced additional strain on the FDA. We are unable to fully understand the impact this may cause on regulations or the related timeframes pertaining to communication with the FDA.

We are subject to extensive government regulation by Health Canada and other federal, state provincial/territorial and local regulatory authorities that increases our costs and could prevent us from marketing or selling our products.

The manufacturing, processing, formulation, packaging, labeling, testing, storing, distributing, marketing, advertising and sale of our products, among other things, are subject to extensive regulation by one or more Canadian agencies, including Health Canada, as well as by several state and local agencies in localities where our products are stored, distributed or sold. In addition, we market certain of our products in accordance with standards set by organizations, such as the USP, the British Pharmacopeia, or BP, scientific nonprofit organizations that sets standards for the identity, strength, quality, and purity of

medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide. Adherence to USP and BP published drug standards are prescribed by the Canadian Food and Drug Regulations.

Health Canada regulates the testing, manufacture, labeling, marketing and sale of pharmaceutical products. Approval by Health Canada is required before any new drug, including any new generic drug, may be marketed or sold in Canada. In order to receive approval from Health Canada for our product candidates that are generic versions of brand-name drugs, we intend to use the ANDS, or Drug Identification Number Application, or DINA, routes, which requires us to demonstrate to Health Canada that each generic product candidate has the same active ingredient, strength, dosage form, route of administration and intended use as a corresponding approved drug product and is bioequivalent to the branded drug product (approved under a New Drug Submission or NDS or DINA, meaning that there is no significant difference between the drugs in their rate and extent of absorption in the body. However, if Health Canada determines that an ANDS or DINA for a generic drug product is not adequate to support approval, it could deny our application or request additional data or information, which could delay approval of the product and impair our ability to compete with the brand-name drug product and/or other generic versions of the product.

If our product candidates receive Health Canada approval through the ANDS or DINA process, the labeling claims and marketing statements that we can make for our generic drugs are generally limited to the claims approved by Health Canada for use in the brand-name product’s label. In addition, following regulatory approval, the labeling, packaging, adverse event reporting, storage, advertising and promotion for the product will be subject to extensive and ongoing regulatory requirements.

As an importer and distributor of pharmaceutical products, we must also comply with cGMPs, or current Good Manufacturing Practices, which include requirements related to production processes, quality control and assurance and recordkeeping. Our facilities and procedures and those of our suppliers are subject to periodic inspection by Health Canada and foreign regulatory agencies. Any material deviations from pharmaceutical cGMPs or other applicable requirements identified during such inspections may result in recalls or other enforcement actions, including non-compliance ratings, a delay or suspension in manufacturing operations. Further, discovery of previously unknown problems with a product or manufacturer may result in restrictions or sanctions, including suspension or withdrawal of marketing approvals, seizures or recalls of products from the market, and revoking of licenses, any of which could significantly and adversely affect supplies of our products.

The recent COVID-19 pandemic has introduced additional strains on Health Canada. We are unable to fully understand the impact this may cause on regulations or the related timeframes pertaining to communication with Health Canada.

Inadequate resources for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

The introduction of the recent COVID-19 pandemic has increased the strain on the FDA, SEC and other government agencies which may increase the likelihood of delays in normal business functions.

We may be subject to, or may in the future become subject to, U.S. federal and state, and foreign laws and regulations imposing obligations on how we collect, use, disclose, store and process personal information. Our actual or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

In many activities, including the conduct of clinical trials, we are subject to laws and regulations governing data privacy and the protection of health-related and other personal information. These laws and regulations govern our processing of personal data, including the collection, access, use, analysis, modification, storage, transfer, security breach notification, destruction and disposal of personal data. We must comply with laws and regulations associated with the international transfer of personal data based on the location in which the personal data originates and the location in which it is processed. In May 2016, the EU Parliament adopted the comprehensive General Data Privacy Regulation, or the GDPR to, among other things, impose more stringent data protection requirements for processors and controllers of personal data and provide for greater penalties and fines for noncompliance, including fines in amounts up to €20 million or 4% of total worldwide annual turnover, whichever is higher. The GDPR became fully effective in May 2018. In addition, in 2018, California adopted a new privacy law (effective on January 1, 2020) that borrows heavily from the GDPR. Complying with the enhanced obligations imposed by the GDPR and other applicable international and US privacy laws and regulations may result in significant costs to our business and require us to amend certain of our business practices. Further, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase. The future enactment of more restrictive laws, rules or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our businesses, and noncompliance could result in regulatory penalties and significant legal liability.

The privacy and security of personally identifiable information stored, maintained, received or transmitted, including electronically, subject to significant regulation in the United States and abroad. While we strive to comply with all applicable privacy and security laws and regulations, legal standards for privacy continue to evolve and any failure or perceived failure to comply may result in proceedings.

~~Our~~We ~~global~~could ~~operations~~experience ~~expose~~business usinterruptions toat ~~certain~~our ~~risks,~~manufacturing ~~including challenges associated with political and economic instability, major hostilities and acts of terrorism~~facility.

We ~~are~~manufacture adrug ~~global~~products ~~company~~at ~~with~~one ~~operations~~domestic ~~outside~~manufacturing offacility, ~~the~~which ~~United~~may ~~States. We~~be ~~face~~forced ~~numerous~~to ~~risks~~shut ~~inherent~~down inor ~~conducting~~may ~~business~~be ~~internationally,~~unable ~~including~~to ~~terrorist~~operate ~~acts,~~at ~~acts~~full ofcapacity ~~war,~~as ~~political~~a ~~unrest,~~result ~~public~~of ~~health~~hurricanes, ~~concerns~~tornadoes, ~~labor~~earthquakes, ~~disputes~~storms and ~~national~~other ~~disasters. Such~~extreme weather events ~~may~~as ~~lead~~well toas ~~economic~~strikes, ~~and~~war, ~~political~~violent ~~uncertainties~~upheavals, ~~and~~terrorist ~~contribute~~acts, topandemics ~~global~~and ~~economic~~other ~~instability. We~~force ~~may~~majeure ~~not~~events. beA ~~successful~~significant indisruption ~~developing~~at ~~and~~this ~~implementing~~facility, ~~policies~~even ~~and~~on ~~strategies~~a toshort-term ~~address~~basis, ~~the~~could ~~foregoing~~impair ~~events~~our inability ato ~~timely~~produce and ~~effective~~ship ~~manner. Consequently,~~drug ~~the~~products ~~occurrence~~to ofthe ~~one~~market oron ~~more~~a oftimely ~~the~~basis, ~~foregoing~~which ~~events~~may ~~could~~ have a material adverse ~~impact~~effect on our business, ~~operating~~financial ~~results~~position and ~~financial~~results ~~condition, including loss~~ of ~~sales or customers~~operations. ~~The recent COVID-19 pandemic has introduced greater risks with foreign political and economic instability.~~

~~Violations~~Any offailure ~~cGMP~~to ~~and~~comply ~~other~~with ~~government~~our ~~regulations~~reporting ~~could~~and ~~have~~payment aobligations ~~material~~related ~~adverse~~to ~~effect~~our onparticipation ~~our~~in ~~reputation,~~federal ~~business~~health care programs, ~~financial~~including ~~condition~~Medicare and ~~results~~Medicaid, ofcould ~~operations~~subject us to investigation, penalties, and sanctions.

~~All~~Federal ~~facilities~~laws regarding reporting and ~~manufacturing~~payment ~~techniques~~obligations ~~used~~with respect to ~~manufacture~~a pharmaceutical ~~products~~company’s ~~for~~participation ~~clinical~~in ~~use~~federal orhealth ~~for~~care ~~commercial~~programs, ~~sale~~including inMedicare ~~the~~and ~~United~~Medicaid, ~~States~~are ~~and~~complex. ~~other~~These ~~Teligent~~programs ~~markets~~generally ~~must~~require beus ~~operated~~to pay rebates or provide discounts to government payors in ~~conformity~~connection with ~~cGMP~~our ~~regulations~~products that are dispensed to beneficiaries of these programs. In some cases, such as ~~required~~with bythe Medicaid Drug Rebate Program, the ~~FDA~~rebates are based on pricing and ~~other~~rebate ~~regulatory~~calculations ~~bodies.~~that ~~Our~~we ~~suppliers’~~report ~~facilities~~on ~~are~~a ~~subject~~quarterly basis to ~~scheduled~~the ~~periodic~~government ~~regulatory~~agencies that administer the programs. Because our processes for calculating applicable government prices and ~~customer~~the ~~inspections~~judgments toinvolved ~~ensure~~in ~~compliance~~making ~~with~~these ~~cGMP~~calculations involve subjective decisions and ~~other~~complex ~~requirements~~methodologies, ~~applicable~~these calculations are subject to ~~such~~risk ~~products~~of errors and differing interpretations. AIn ~~finding~~addition, ~~that~~they weare orsubject ~~one~~to orreview ~~more~~and ofchallenge ~~our~~by ~~suppliers~~the ~~had~~applicable ~~materially~~governmental ~~violated~~agencies, ~~these~~and ~~requirements~~it is possible that such reviews could result in ~~one~~changes orthat ~~more~~may ~~regulatory~~have ~~sanctions~~material adverse legal, ~~loss~~regulatory, ofor aeconomic ~~customer~~consequences. ~~contract,~~Responding ~~disqualification~~to ofcurrent ~~data~~and ~~for~~future ~~client~~changes ~~submissions~~may toincrease ~~regulatory~~our ~~authorities~~costs and athe ~~mandated~~complexity ~~closing~~ of ~~our~~compliance ~~suppliers’~~will ~~facilities~~be time-consuming, ~~which~~and ~~in turn~~ could have a material adverse effect on our ~~reputation, business, financial condition, operating~~ results ~~and~~of ~~cash flows~~operations.

During our efforts to expand our existing manufacturing facility, as well as potentially select and build out an additional manufacturing facility, we could experience business interruptions, as well as incur significant capital expenditures to complete the expansions, which may have a material adverse effect on our business, financial position and results of operations.

We manufacture drug products at one domestic manufacturing facility. This facility may be forced to shut down or may be unable to operate at full capacity as a result of potential expansion plans. A significant disruption at this facility, even on a short-term basis, could impair our ability to produce and ship drug products to the market on a timely basis, which may have a material adverse effect on our business, financial position and results of operations.

We could experience business interruptions at our manufacturing facility, which may have a material adverse effect on our business, financial position and results of operations.

We manufacture drug products at one domestic manufacturing facility. This facility may be forced to shut down or may be unable to operate at full capacity as a result of hurricanes, tornadoes, earthquakes, storms and other extreme weather events as

well as strikes, war, violent upheavals, terrorist acts, pandemics and other force majeure events. A significant disruption at this facility, even on a short-term basis, could impair our ability to produce and ship drug products to the market on a timely basis, which may have a material adverse effect on our business, financial position and results of operations through possible failure to supply fees or lost business opportunities. The recent COVID-19 pandemic may force us to temporarily close our production facility due to local, state or federal requirements.

We are currently in the process of expanding our manufacturing facilities. Any delays in the expansion process or in the receipt of certain regulatory approvals in connection therewith could have a material adverse effect on our business and results of operations.

We are in the process of expanding and upgrading our existing manufacturing facilities in Buena, New Jersey. Upon the completion of this expansion, we intend to transfer the manufacture of certain sterile injectables, for which we currently rely on CMOs, to this facility. Any delays in the expansion process could increase the overall cost of the expansion and could force us to postpone the planned transfer of our manufacturing to this facility. In addition, any delays or denials of the regulatory approvals needed to begin manufacturing products at this facility could have a material adverse effect on our business. As previously noted, on November 26, 2019 FDA issued us a Warning Letter following an inspection of our manufacturing facility at 105 Lincoln Avenue, Buena, New Jersey, that identified several cGMP violations and for which we are continuing diligent remediation activities. The recent COVID-19 pandemic may cause delays in the remediation and re-inspection process.

Our reporting and payment obligations related to our participation in federal health care programs, including Medicare and Medicaid, are complex and often involve subjective decisions that could change. Any failure to comply with those obligations could subject us to investigation, penalties, and sanctions.

Federal laws regarding reporting and payment obligations with respect to a pharmaceutical company’s participation in federal health care programs, including Medicare and Medicaid, are complex. These programs generally require us to pay rebates or provide discounts to government payors in connection with our products that are dispensed to beneficiaries of these programs. In some cases, such as with the Medicaid Drug Rebate Program, the rebates are based on pricing and rebate calculations that we report on a quarterly basis to the government agencies that administer the programs. Because our processes for calculating applicable government prices and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing interpretations. In addition, they are subject to review and challenge by the applicable governmental agencies, and it is possible that such reviews could result in changes that may have material adverse legal, regulatory, or economic consequences. Responding to current and future changes may increase our costs and the complexity of compliance will be time-consuming, and could have a material adverse effect on our results of operations. For example, the U.S. Department of Health and Human Services (“DHHS”) issued a proposed rule that would remove safe harbor protections for certain rebates. Given the complexity of the drug pricing systems in the United States, DHHS is also soliciting input on multiple issues and other proposals as part of this formal rulemaking process, and the timeline for any final government action could be lengthy. It is unclear what changes a DHHS final rule, if any, would make to the current drug rebate rules for Medicare and Medicaid programs, and what the potential impact of such changes would be to our business or operations.

In addition, the Office of Inspector General has recently increased its focus on the methodologies used by manufacturers to calculate the average manufacturer price, or AMP, and best price, or BP, to assess manufacturer compliance with reporting requirements under the Medicaid Drug Rebate Program. We are liable for errors associated with our submission of pricing data and for overcharging government payors. For example, failure to submit quarterly AMP and BP data on a timely basis could result in a civil monetary penalty of $10,000 per day for each day the submission is late beyond the due date. Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the Federal False Claims Act and other laws and regulations.

Our policies regarding returns, allowances and chargebacks, failure to supply penalties and marketing programs adopted by wholesalers may reduce revenues in future fiscal periods.

We, like other generic drug manufacturers, have agreements with customers allowing chargebacks, product returns, administrative fees, failure to supply penalties and other rebates. Under many of these arrangements, we may match lower prices offered to customers by competitors. If we choose to lower our prices and, if contractually obligated, we issue a credit on the products that the customer is holding in inventory, ~~which~~it could reduce sales revenue and gross margin for the period the credit is provided. Under many of these arrangements, ~~we may have failure to supply penalties, which~~ in the event we are unable to supply a certain product and are unable to meet the needs of our customers, we may incur failure to supply penalties which may be significant. Like our competitors, we also give credits for chargebacks to wholesalers with whom we have contracts for their sales to hospitals, group purchasing organizations, pharmacies or other customers. A chargeback is the difference between the price at which we invoice the wholesaler and the price that the wholesaler’s end-customer pays for a product. Although we establish reserves based on prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that our reserves are adequate or that actual product returns, allowances, and chargebacks will not exceed our estimates. As we continue to experience the consolidation of our customers, which may result in changes to previous patterns of ordering and/or pricing of our products, this could disrupt our established methodologies for calculating our provisions for chargebacks and other accruals.

product. Although we establish reserves based on prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that our reserves are adequate or that actual product returns, allowances, and chargebacks will not exceed our estimates. As we continue to experience the consolidation of our customers, which may result in changes to previous patterns of ordering and/or pricing of our products, this could disrupt our established methodologies for calculating our provisions for chargebacks and other accruals.

We are subject to federal and state healthcare fraud and abuse and false claims laws and may be subject to related litigation brought by the government or private individuals.

We are subject to state and federal healthcare laws pertaining to fraud and abuse, physician payment transparency and laws that govern the submission of claims for reimbursement. These laws include the following:

•the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as Medicare and Medicaid. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

•the federal False Claims Act, or FCA, which imposes civil liability and criminal fines on individuals or entities that knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the government. The FCA also allows private individuals to bring a suit on behalf of the government against an individual or entity for violations of the FCA. These suits, also known as qui tam actions, may be brought by, with only a few exceptions, any private citizen who believes that he has material information of a false claim that has not yet been previously disclosed. These suits have increased significantly in recent years because the FCA allows an individual to share in any amounts paid to the federal government in fines or settlement as a result of a successful qui tam action;

•federal criminal laws that prohibit executing a scheme to defraud any federal healthcare benefit program or making false statements relating to healthcare matters;

•the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to a “covered recipient,” which include physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and beginning in 2022, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse-midwives following an expansion of the law by Congress in 2018. Applicable manufacturers and group purchasing organizations also must report annually ownership and investment interests held by physicians (as defined above) and their immediate family members and payments or other “transfers of value” to such physician owners and their immediate family members;

•the US federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes obligations on certain covered entity health care providers, health plans, and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and imposes criminal and civil liability for executing a scheme to defraud any health care benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care benefits, items or services; similar to the US federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

•the US federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under federal health care programs;

•~~HIPAA,~~state ~~which~~and ~~imposes~~foreign ~~obligations~~laws onthat ~~certain~~govern ~~covered~~the ~~entity~~privacy ~~health~~and ~~care~~security ~~providers,~~of health ~~plans,~~information ~~and~~in ~~health~~certain ~~care~~circumstances, ~~clearinghouses~~including asstate ~~well~~security asbreach ~~their~~notification ~~business~~laws, ~~associates~~state ~~that~~health ~~perform~~information ~~certain~~privacy ~~services~~laws ~~involving~~and ~~the~~federal ~~use~~and orstate ~~disclosure~~consumer ofprotection ~~individually~~laws, ~~identifiable~~many ~~health~~of ~~information,~~which ~~including~~differ ~~mandatory~~from ~~contractual~~each ~~terms,~~other ~~with~~in ~~respect~~significant toways ~~safeguarding~~and ~~the~~often ~~privacy,~~are ~~security~~not ~~and~~preempted ~~transmission~~by ofHIPAA, ~~individually~~thus ~~identifiable~~complicating ~~health~~compliance ~~information~~efforts; ~~and~~

•analogous state and foreign laws ~~that govern the privacy~~ and ~~security~~regulations ofrelating to health ~~information~~care infraud ~~certain~~and ~~circumstances~~abuse, ~~including~~such as state ~~security~~anti-kickback ~~breach~~and ~~notification~~false claims laws, ~~state~~that ~~health~~may ~~information~~apply ~~privacy~~to ~~laws~~sales ~~and~~or ~~federal~~marketing arrangements and ~~state~~claims ~~consumer~~involving ~~protection~~health ~~laws~~care items or services reimbursed by non-governmental third-party payors, including private insurers; and

many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts;

•analogous state and foreign laws and regulations relating to health care fraud and abuse, such as state anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers;

•state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

If our past or present operations are found to be in violation of any of such laws or any other governmental regulations that may apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from federal health care programs, and/or the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment, or restructuring of our operations could adversely affect our ability to operate our business and our financial results, action against us for violation of these laws, even if we successfully defend against them, it could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

us for violation of these laws, even if we successfully defend against them, it could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

Our business activities may be subject to the Foreign Corrupt Practices Act and similar anti-bribery and anti-corruption laws of other countries in which we operate.

We have conducted and ~~have ongoing studies in international locations, and~~ may in the future initiate additional studies in countries other than the United States. Our business activities may be subject to the Foreign Corrupt Practices Act, ~~or FCPA,~~ and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. The FCPA generally prohibits offering, promising, giving or authorizing others to give anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their governments, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA. Recently the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply with all applicable laws and regulations~~, particularly given the high level of complexity of these laws~~. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products, if approved, in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees and our business, prospects, operating results and financial condition.

Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.

In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs~~. For example~~, inand ~~March~~there ~~2010,~~continues ~~the~~to ~~Patient~~be ~~Protection~~significant ~~and~~uncertainty ~~Affordable~~regarding ~~Care~~health ~~Act~~care, ashealth ~~amended~~care bycoverage ~~the~~and ~~Health~~health ~~Care~~care ~~and~~insurance ~~Education~~markets. ~~Reconciliation~~The ~~Act,~~uncertainty oraround the future of the Affordable Care Act, ~~was~~and ~~passed,~~in ~~which~~particular ~~substantially~~the ~~changes~~impact ~~the~~to ~~way~~reimbursement ~~health~~levels, ~~care~~may islead ~~financed~~to byuncertainty ~~both~~or ~~governmental~~delay ~~and~~in ~~private~~the ~~insurers~~purchasing decisions of our customers, ~~and~~which ~~significantly~~may ~~impacts~~in ~~the~~turn ~~U.S.~~negatively ~~pharmaceutical~~impact ~~industry.~~our ~~The~~product ~~Affordable~~sales ~~Care~~and ~~Act,~~results ~~among~~of ~~other~~operations. ~~things~~Similarly, ~~addresses~~there are a ~~new~~number ~~methodology~~of bystate ~~which~~and ~~rebates~~local ~~owed~~legislative byand ~~manufacturers~~regulatory ~~under~~efforts ~~the~~related ~~Medicaid~~to ~~Drug~~drug ~~Rebate~~pricing, ~~Program~~including ~~are~~drug ~~calculated~~price ~~for~~transparency ~~drugs~~laws that ~~are~~apply ~~inhaled,~~to ~~infused,~~pharmaceutical ~~instilled~~manufacturers, ~~implanted~~that ormay ~~injected,~~have ~~increases~~an ~~the~~impact ~~minimum~~on ~~Medicaid~~our ~~rebates~~business. ~~owed~~We byexpect ~~manufacturers~~that ~~under~~additional ~~the~~healthcare ~~Medicaid~~reform ~~Drug~~measures ~~Rebate~~will ~~Program~~be ~~and~~adopted ~~extends~~in the ~~rebate~~future, ~~program~~any toof ~~individuals~~which ~~enrolled~~could limit reimbursement levels, which could result in ~~Medicaid~~reduced ~~managed~~demand ~~care~~for ~~organizations.~~our products or create additional pricing pressures.

There also continues to be uncertainty that any provisions of the Affordable Care Act will continue to exist in their current form. Certain legislators are continuing their efforts to repeal the Act, although there is little clarity on how such a repeal would

be implemented and what an Affordable Care Act replacement might look like, and there continue to be lawsuits in federal courts seeking to invalidate parts or all of the Act. For the immediate future, there continues to be significant uncertainty regarding the health care, health care coverage and health care insurance markets. Both Congress and President Trump have expressed an intention to repeal or repeal and replace the Affordable Care Act, and as a result certain sections of the Affordable Care Act have not been fully implemented or effectively repealed, and the Fifth Circuit Court of Appeals recently upheld a lower court decision finding the Affordable Care Act’s individual mandate to be unconstitutional. The uncertainty around the future of the Affordable Care Act, and in particular the impact to reimbursement levels, may lead to uncertainty or delay in the purchasing decisions of our customers, which may in turn negatively impact our product sales. If there are not adequate reimbursement levels, our business and results of operations could be adversely affected. Similarly, there are a number of state and local legislative and regulatory efforts related to drug pricing, including drug price transparency laws that apply to pharmaceutical manufacturers, that may have an impact on our business.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures. The recent COVID-19 pandemic may introduce temporary or permanent healthcare reform measures for which we cannot predict the financial implication of on our business.

Even after our products receive regulatory approval, such products may not achieve expected levels of market acceptance.

Even if we are able to obtain regulatory approvals for our generic pharmaceutical products the success of those products is dependent upon market acceptance. Levels of market acceptance for our products could be impacted by several factors, including but not limited to:

•the availability of alternative products from our competitors;

•the price of our products relative to that of our competitors;

•the effectiveness of our marketing relative to that of our competitors;

•the timing of our market entry;

•the ability to market our products effectively to the different levels in the distribution chain;

•other competitor actions; and

•the continued acceptance of and/or reimbursement for our products by government and private formularies and/or third party payors.

Additionally, studies of the proper utilization, safety, and efficacy of pharmaceutical products ~~are being~~ conducted by the industry, government agencies, and others. ~~Such studies, which increasingly employ sophisticated methods and techniques, including methods to investigate the comparative effectiveness of different products used for similar indications,~~ can call into question the utilization, safety, and efficacy of previously marketed as well as future products. In some cases, studies have resulted, and may in the future result, in the discontinuance of product marketing or other risk management programs, such as the need for a patient registry, as well as delays in approvals. The occurrence of any of the above risks could adversely affect our ~~profitability,~~ business, financial position, results of operations and/or cash flow~~, and could cause the market value of our common stock to decline~~.

Product recalls could harm our business.

Product recalls or product field alerts may be issued at our discretion or required by the FDA and Health Canada, other governmental agencies or other companies having regulatory authority for pharmaceutical product sales. From time to time, we may recall products for various reasons, including failure of our products to maintain their stability through their expiration dates or other quality issues. Any recall or product field alert has the potential of damaging our reputation or the reputation of the product. Any significant recalls could materially affect our sales. In these cases, our business, financial condition, results of operations and cash flows could be materially adversely affected.

We are susceptible to product liability claims that may not be covered by insurance and could require us to pay substantial sums.

We face the risk of loss resulting from, and adverse publicity and reputational harm associated with, product liability lawsuits, whether or not such claims are valid. We may not be able to avoid such claims. In addition, our product liability insurance may not be adequate to cover such claims and we may not be able to obtain adequate insurance coverage in the future at acceptable costs. A successful product liability claim that exceeds our policy limits could require us to pay substantial sums. In addition, product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain and, as a result, we may not be able to obtain the type and amount of coverage we desire or to maintain our current coverage.

The ~~manufacture~~testing ~~and~~required ~~storage~~for ofthe ~~pharmaceutical~~regulatory ~~and~~approval ~~other~~of our products ~~are~~is ~~subject~~conducted toby ~~inherent~~independent ~~risk~~third parties.

Because chemical ingredients are used in the manufacture of our products and due to the nature of the manufacturing process itself, there is a risk of incurring liability for damages caused by or during the storage or manufacture of both the chemical ingredients and the finished products. Although we have never incurred any material liability for damages of that nature, we may be subject to liability in the future. In addition, while we believe our insurance coverage is adequate, it is possible that a successful claim would exceed our coverage, requiring us to pay a substantial sum.

The testing required for the regulatory approval of our products is conducted by independent third parties. Any failure by any of these third parties to perform this testing properly and in a timely manner may have an adverse effect upon our ability to obtain regulatory approvals.

Our applications for the regulatory approval of our products incorporate the results of testing and other information that is conducted or gathered by independent third parties (including, for example, manufacturers of raw materials, testing laboratories, CROs or independent research facilities). Our ability to obtain regulatory approval of the products being tested is dependent upon the quality of the work performed by these third parties, the quality of the third parties’ facilities, and the accuracy of the information provided to us by third parties. We have little or no control over any of these factors. If this testing is not performed properly, our ability to obtain regulatory approvals could be restricted or delayed. In addition, if third party fraud or other recordkeeping problems are discovered after our products are approved for marketing, any government investigations or findings could result in any products that incorporated those fraudulent results having their regulatory approvals withdrawn. The recent COVID-19 pandemic may create additional risk and delays at our independent third party service providers.

The failure to obtain, maintain or protect patents, trade secrets, know-how and other intellectual property could impact our ability to compete effectively.

To compete effectively, we need to develop and maintain a proprietary position with regard to our own technology, products and business. We rely on a combination of patents, trade secrets, proprietary know-how and other intellectual property to protect our proprietary technology and rights. We also maintain a number of trade secrets, know-how and other intellectual property.

The risks and uncertainties that we face with respect to patents and other proprietary rights include the following:

•the pending patent applications we have filed or may file, or to which we have exclusive rights, may not result in issued patents, or may take longer than we expect to result in issued patents;

•changes in U.S. patent laws may adversely affect our ability to obtain or maintain our patent protection;

•we may be subject to interference proceedings;

•the claims of any patents that are issued may not provide meaningful protection;

•we may not be able to develop additional proprietary technologies that are patentable;

•the patents licensed or issued to us or our collaborators may not provide a competitive advantage;

•other companies may challenge patents licensed or issued to us or our collaborators;

•other companies may independently develop similar or alternative technologies, or duplicate our technology;

•other companies may design around technologies we have licensed or developed; and

•enforcement of patents is complex, uncertain and expensive.

The trademark applications we have filed or may file may not result in trademark registrations, which would result in lesser protections for our brands.

Our product offerings and our customers’ products may infringe on the intellectual property rights of third parties.

From time to time, third parties have asserted intellectual property infringement claims against us and our customers and there can be no assurance that third parties will not assert infringement claims against either us or our customers in the future. While we believe that our ~~product~~products ~~offerings~~ do not infringe in any material respect upon proprietary rights of other parties and/or that meritorious defenses would exist with respect to any assertions to the contrary, there can be no assurance that we would not be found to infringe on the proprietary rights of others. Any claims that our products or processes infringe these rights, regardless of their merit or resolutions, could be costly and may divert the efforts and attention of our management and technical personnel. We may not prevail in such proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation.

~~Patent~~In ~~applications~~addition, inour ~~the~~customers’ ~~U.S.~~products ~~and~~may ~~some~~be ~~foreign~~subject ~~countries~~to ~~are~~intellectual ~~generally~~property ~~not~~infringement ~~publicly~~claims, ~~disclosed~~which ~~until~~could ~~they~~materially ~~are~~affect ~~published~~our orbusiness ~~the~~if ~~patent~~their isproducts ~~issued,~~cease ~~and~~to ~~we may not~~ be ~~aware~~manufactured ofand ~~currently~~they ~~filed~~have ~~patent applications that relate~~ to ~~our~~discontinue ~~offerings~~the oruse ~~processes.~~of Ifthe ~~patents~~infringing ~~later~~technology ~~issue~~which onwe ~~these~~may ~~applications~~provide. Further, we may be ~~found~~responsible ~~liable~~ for ~~subsequent~~indemnifying ~~infringement.~~our ~~There~~customers ~~has~~for ~~been~~an ~~substantial~~intellectual ~~litigation~~property ininfringement ~~the pharmaceutical and biotechnology industries with respect to the manufacture, use and sale of products and processes that are the subject of conflicting patent rights~~claim.

~~Any~~If ~~claims~~we ~~that~~were ~~our~~to ~~product~~assert ~~offerings~~any orof ~~processes~~our ~~infringe~~own ~~these~~intellectual ~~rights,~~property ~~regardless~~infringement ofclaims ~~their~~against ~~merit~~third orparties ~~resolutions,~~and ~~could~~the bethird ~~costly~~parties ~~and~~were ~~may~~found ~~divert~~not ~~the~~to ~~efforts~~infringe ~~and~~our ~~attention~~intellectual ofproperty or our ~~management~~intellectual ~~and~~property ~~technical~~was ~~personnel.~~found Weto ~~may~~be ~~not~~invalid ~~prevail~~and/or inunenforceable, ~~such~~we ~~proceedings~~would ~~given~~lose the ~~complex~~opportunity ~~technical~~to ~~issues~~leverage ~~and~~our ~~inherent~~own ~~uncertainties in~~ intellectual property, ~~litigation.~~for Ifexample, ~~such~~through ~~proceedings~~licensing ~~result~~of inour antechnology ~~adverse~~to ~~outcome~~others, wecollection ~~could,~~of ~~among~~damages ~~other~~and/or ~~things,~~royalty bepayments ~~required~~based ~~to:~~upon successful assertion of our intellectual property rights via enjoining others from practicing the technology at issue.

•pay damages in the form of lost profits and/or a reasonable royalty for any infringement;

•pay substantial damages (potentially treble damages in the U.S. if any such infringement is found to be willful);

•pay attorney fees of a prevailing party, if the case is found to be exceptional;

•cease the manufacture, use or sale of the infringing offerings or processes;

•discontinue the use of the infringing technology;

•expend significant resources to design around patented technology and develop non-infringing technology; and

•license patented technology from the third party claiming infringement, which license may not be available on commercially reasonable terms, or may not be available at all.

In addition, our customers’ products may be subject to claims of intellectual property infringement and such claims could materially affect our business if their products cease to be manufactured and they have to discontinue the use of the infringing technology which we may provide. Further, depending on the particular circumstances of any given claim, it may be the case that we may be responsible for indemnifying our customers for a claim of intellectual property infringement.

If we were to assert any of our own intellectual property against third parties and the third parties were found not to infringe our intellectual property or our intellectual property was found to be invalid, and/or unenforceable, we would lose the opportunity to leverage our own intellectual property, for example, through licensing of our technology to others, collection of damages and/or royalty payments based upon successful assertion of our intellectual property rights via enjoining others from practicing the technology at issue.

Any of the foregoing could affect our ability to compete or have a material adverse effect on our business, financial condition and results of operations.

~~Significant~~Our ~~balances~~goodwill ofor other intangible assets, ~~including~~have ~~goodwill,~~been ~~are~~ subject to impairment ~~testing~~charges and may ~~result~~continue into ~~impairment~~be ~~charges,~~subject ~~which~~to ~~may~~impairment ~~materially~~in ~~and~~the ~~adversely affect our results of operations and financial condition~~future.

AWe ~~significant~~assess ~~amount~~the recoverability of our ~~total~~long-lived assets, iswhich ~~related~~include toproperty ~~goodwill~~and equipment and definite-lived intangible assets, annually or whenever significant events or changes in circumstances indicate impairment may have occurred. Impairment may result from various factors, including adverse changes in~~-process~~ ~~research~~assumptions ~~and~~used ~~development~~for valuation purposes, such as actual or projected revenue growth rates, profitability, or discount rates. AsIf indicators of ~~December 31~~impairment exist, ~~2019~~projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value ofis ~~our~~recoverable. ~~goodwill~~Any ~~and~~resulting ~~intangible~~impairment ~~assets~~is ~~net~~recorded as a reduction in the carrying value of ~~accumulated~~the ~~amortization~~related ~~was$45.1~~asset ~~million.~~in ~~Goodwill~~excess of fair value and ~~other~~a ~~intangible~~charge ~~assets~~to ~~are~~operating ~~tested~~results. For ~~for~~the ~~impairment~~twelve ~~annually~~months ~~when~~ended ~~events~~December ~~occur~~31, or2020, ~~circumstances~~we ~~change~~determined that ~~could~~there ~~potentially~~was ~~reduce~~an ~~the~~impairment ~~fair~~of ~~value~~$101.5 ofmillion to our long-lived assets, and we may experience such charges in the ~~reporting~~future, ~~unit~~particularly if our business performance continues to decline or ~~intangible~~expected ~~asset~~growth is not realized. ~~Impairment~~We ~~testing~~cannot ~~compares~~predict the ~~fair~~amount and timing of any future impairments, if

33any. Any future impairment of our goodwill, tangible assets or other intangible assets could have a material adverse effect on our financial condition and results of operations, as well as the trading price of our securities.

value of the reporting unit or intangible asset to its carrying amount. Any future goodwill or other intangible asset impairment, if any, would be recorded in operating income and could have a material adverse effect on our results of operations and financial condition.

We may not be able to fully realize the expected benefits from the acquisition of certain products and/or companies.

Our recent acquisition of certain products and a company subjects us to additional operational and financial risks, including the following:

•additional costs that we may need to incur in order to return the products to the market and to comply with regulatory requirements;

•difficulties in coordinating research and development activities;

•uncertainties in the business relationships with our customers and suppliers; and

•lack of previous experiences in manufacturing, commercializing, and distributing products in therapeutic areas outside of the topical generic pharmaceutical market and in markets outside of the United States.

Our approved products may not achieve commercialization at levels of market acceptance that allow us to achieve profitability, which could have a material adverse effect on our business, financial position and results of operations.

We seek to develop, license or acquire products that we can commercialize at levels of market acceptance that would allow us to recoup the costs of development and commercialization, grow market share, and achieve profitability. Even if we are able to obtain regulatory approvals for certain pharmaceutical products, if we fail to accurately predict demand for such products, our business, financial position, and results of operations could be adversely impacted. Levels of market acceptance for products could be impacted by several factors, including but not limited to:

•the availability of alternative products from our competitors;

•the price of our products relative to that of our competitors;

•the effectiveness of our marketing relative to that of our competitors;

•the timing of our market entry;

•the ability to market our products effectively to the retail level; and

•the acceptance of our products by government and private formularies.

Some of these factors are not within our control and, if any such factor arises, our profitability, business, financial position and results of operations could be materially adversely affected.

Future acquisitions and investments could disrupt our business and harm our financial condition and operating results.

Our growth will depend, in part, on our continued ability to develop, commercialize and expand our drug products, including in response to changing regulatory and competitive pressures. In some circumstances, we accelerate our growth through the acquisition of complementary products and technologies rather than through internal development. The identification of suitable products to be acquired can be difficult, time-consuming and costly, and we may not be able to successfully complete or successfully execute strategies for identified acquisitions. The risks faced in connection with acquisitions include:

•diversion of management time and focus from operating our business to addressing acquisition and/or product integration challenges;

•coordination of research and development and sales and marketing functions;

•retention of key employees from the acquired company;

•integration of the acquired company’s accounting, management information, human resources and other administrative systems;

•the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;

•liability for activities of the acquired company and/or products before the acquisition, including patent infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

•unanticipated write-offs or charges; and

•litigation or other claims in connection with the acquired company or product, including claims from product users, former stockholders or other third parties.

In any acquisition that we may undertake, our failure to address these risks or other problems encountered in connection with any acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.

We may become involved in legal proceedings from time to time which may result in losses, damage to our business and reputation and place a strain on our internal resources.

In the ordinary course of our business, we may be involved in legal proceedings with both private parties and certain government agencies, including the FDA. Enforcement actions and litigation may result in verdicts against us, which may include significant monetary awards, judgments that certain of our intellectual property rights are invalid or unenforceable and injunctions preventing the manufacture, marketing and sale of our products. If disputes are resolved unfavorably, our business, financial condition and results of operations may be adversely affected. Any government enforcement action or litigation, whether or not successful, may damage our reputation. Furthermore, we are likely to incur substantial expense in defending these actions and lawsuits, and the time demands of such enforcement actions and lawsuits could divert management’s attention from ongoing business concerns and interfere with our normal operations.

Any government enforcement action or litigation, whether or not successful, may damage our reputation. Furthermore, we are likely to incur substantial expense in defending these actions and lawsuits, and the time demands of such enforcement actions and lawsuits could divert management’s attention from ongoing business concerns and interfere with our normal operations.

In the normal course of business, we periodically enter into employment agreements, legal settlements, and other agreements which incorporate indemnification provisions. We maintain insurance coverage which we believe will effectively mitigate our obligations under these indemnification provisions. However, should our obligation under an indemnification provision exceed our coverage or should coverage be denied, it could have a material adverse effect on our business, financial position and results of operations.

We are currently involved in U.S. and Canadian antitrust litigation related to our pricing practices, each of which could result in significant fines, reputational harm or otherwise adverse effects on our business, financial condition and results of operations.

Thirteen putative class actions have been filed against us and certain other defendants and have been consolidated in Multidistrict Litigation in the Eastern District of Pennsylvania regarding the pricing of generic pharmaceuticals, including our antifungal skin cream Econazole Nitrate 1% product. In addition, “Opt-out” antitrust lawsuits have been filed against us by various plaintiffs and have been consolidated into the Multidistrict Litigation. Each of the opt-out complaints names several dozen defendants (including us) and involves allegations regarding the pricing of econazole (and in some cases fluocinolone acetonide) along with up to 180 other drug products, most of which were not manufactured or sold by us during the period at issue. A complaint has also been filed by certain state Attorneys General based on pricing of topical drugs, naming us as a defendant with respect to econazole nitrate. This action has also been consolidated into the Multidistrict Litigation. In addition, in June 2020, a putative class action lawsuit was filed in the Federal Court of Canada against us and our Canadian subsidiary, along with over 50 other pharmaceutical defendant companies, alleging that the generic drug manufacturer defendants conspired to allocate the Canadian market and customers, fix prices and maintain the supply of generic drugs in Canada to artificially maintain market share and higher generic drug prices in violation of Canada’s Competition Act. The Canadian lawsuit is at a very early stage and we are unable to form a judgment at this time as to whether an unfavorable outcome is probable or remote to provide an estimate of the amount or range of potential loss. While we intend to vigorously defend our position in connection with each of these lawsuits, the outcome of any of this litigation could result in serious fines being levied on us, along with harm to our reputation. Any negative outcome from any of these matters or any other investigation related to our pricing could have a material adverse effect on our business, financial condition and results of operations.

Our business and operations would suffer in the event of system failures.

Despite the implementation of security measures, our internal computer systems are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Any system failure, accident or security breach that causes interruptions in our operations could result in a material disruption of our product development programs. To the extent that any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur liability and the further development of our product candidates may be delayed.

In addition, we rely on complex information technology systems, including Internet-based systems, to support our supply chain processes as well as internal and external communications. The size and complexity of our systems make them potentially vulnerable to breakdown or interruption, whether due to computer viruses or other causes that may result in the loss of key information or the impairment of production and other supply chain processes. Such disruptions and breaches of security could adversely affect our business.

Compliance with ongoing post-marketing obligations for our approved ANDAs, NDAs, NDSs, and ANDSs may uncover new safety information that could give rise to a product recall, updated warnings, or other regulatory actions that could have an adverse impact on our business.

After the FDA or Health Canada approves a drug for marketing under an NDA, ANDA, NDS, or ANDS, the product’s sponsor must comply with several post-marketing obligations that continue until the product is discontinued. These post-marking obligations include the prompt reporting of serious adverse events to the appropriate regulatory agency or agencies, the

submission of product-specific annual reports that include changes in the distribution, manufacturing, and labeling information, and notification when a drug product is found to have significant deviations from its approved manufacturing specifications (among others). Our ongoing compliance with these types of mandatory reporting requirements could result in additional requests for information from the FDA or Health Canada and, depending on the scope of a potential product issue that the FDA or Health Canada may decide to pursue, potentially also result in a request from the agency to conduct a product recall or to strengthen warnings and/or revise other label information about the product. Any of these post-marketing regulatory actions could materially affect our sales and, therefore, they have the potential to adversely affect our business, financial condition, results of operations and cash flows.

Economic conditions could severely impact us.

Current economic conditions may cause a decline in business and consumer spending which could adversely affect our business and financial performance. Our ~~operating results are impacted by the health of the North American economies. Our~~ business and financial performance, including collection of our accounts receivable, realization of inventory, recoverability of assets including investments, may be adversely affected by current and future economic conditions, such as a reduction in the availability of credit, financial market volatility and recession. ~~The recent COVID-19 pandemic may negatively impact North American economies, introduce extreme market volatility and potentially trigger a global recession.~~

Adverse conditions in the economy and disruption of financial markets could negatively impact our customers and therefore our results of operations.

An economic downturn in the businesses or geographic areas in which we sell our products could reduce demand for these products and result in a decrease in sales volume that could have a negative impact on our results of operations. Volatility and disruption of financial markets could limit our customers’ ability to obtain adequate financing or credit to purchase and pay for our products in a timely manner, or to maintain operations, and result in a decrease in sales volume that could have a negative impact on our results of operations. Additionally, economic conditions and market turbulence may also impact our suppliers causing them to be unable to supply in a timely manner sufficient quantities of product components, thereby impairing our ability to manufacture on schedule and at commercially reasonable costs.

If the U.S. economy rapidly contracts or expands, we may have difficulty quickly scaling our operations in response, which may negatively impact our business and financial position. The recent COVID-19 coronavirus has negatively impacted the financial markets and may create additional risk for our customers and their ability to pay for our products.

If we are unable to hire additional qualified personnel, our ability to grow or maintain our business may be harmed.

We will need to hire or retain qualified personnel with expertise in quality systems, nonclinical testing, government regulation, formulation and manufacturing, sales and marketing and finance. We compete for qualified individuals with numerous pharmaceutical and consumer products companies, universities and other research institutions. Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be successful. Attracting and retaining qualified personnel will be critical to our success. ~~The recent COVID-19 pandemic may cause additional retention and recruitment challenges for the Company.~~

WeIf ~~have~~we ~~identified~~fail ~~material~~to ~~weaknesses~~comply inwith ~~our~~the ~~internal~~reporting ~~control~~obligations ~~over~~of ~~financial~~the ~~reporting,~~Exchange Act and Section 404 of the Sarbanes-Oxley Act of 2002, or if we ~~are~~fail ~~unable~~ to ~~satisfy~~achieve ~~regulatory~~and ~~requirements~~maintain ~~relating~~adequate todisclosure controls and procedures and internal ~~controls~~control over financial reporting, our ~~stock~~business ~~price~~results of operations and financial condition, and investors’ confidence in us, could ~~suffer~~be materially adversely affected.

~~Section 404~~As ofa ~~the~~public ~~Sarbanes-Oxley~~company, ~~Act~~we ofare ~~2002~~required ~~requires companies~~ to ~~conduct~~comply awith ~~comprehensive evaluation of~~ the ~~effectiveness~~periodic ~~of their internal control over financial~~ reporting. Atobligations ~~the end~~ of ~~each~~the ~~fiscal~~Exchange ~~year,~~Act weincluding ~~must~~preparing ~~perform~~annual anreports, ~~evaluation~~quarterly ofreports ~~our~~and ~~internal~~current ~~control~~reports. ~~over~~We ~~financial~~did ~~reporting,~~not ~~include~~timely infile our ~~annual~~Quarterly ~~report~~Report ~~the~~on ~~results~~Form of10-Q for the ~~evaluation.~~quarter Weended ~~have~~September ~~identified~~30, ~~material~~2020, ~~weaknesses~~which inquarterly ~~our~~report ~~internal~~was ~~control~~filed ~~over~~on ~~financial~~December ~~reporting~~31, ~~and~~2020. ifOur ~~additional~~failure ~~material~~to ~~weaknesses~~prepare ~~are~~and ~~found~~disclose inthis ~~our~~information ~~internal controls~~ in ~~the~~a ~~future,~~timely ormanner ifcould wesubject ~~fail~~us to ~~remediate~~penalties ~~our~~under ~~existing~~federal ~~material~~securities ~~weaknesses~~laws, weexpose ~~could~~us ~~fail~~ to ~~meet~~lawsuits ~~our regulatory reporting requirements~~ and berestrict ~~subject to regulatory scrutiny and a loss of public confidence in~~ our ~~internal~~ability ~~controls,~~to ~~which~~access ~~could have an adverse effect on our stock price~~financing.

WeIn ~~have~~addition, ~~identified~~we ~~material~~are ~~weaknesses~~required inunder applicable law and regulations to integrate our systems of disclosure controls and procedures and internal control over financial reporting,. ~~which~~Our ~~could~~management ~~continue~~assessed toour ~~impact~~existing ~~negatively~~disclosure ~~our~~controls ~~ability~~and toprocedures ~~report~~as ~~our~~of ~~results~~December of31, ~~operations~~2020, and our management concluded that we did not maintain effective control over financial ~~condition~~reporting ~~accurately~~based ~~and~~on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. For a ~~timely~~detailed ~~manner~~description of these material weaknesses, see Item 9A, "Controls and Procedures" below.

AsOur ~~required~~remediation byefforts ~~Section 404~~identified ofin ~~the~~Item ~~Sarbanes-Oxley Act of 2002~~9A, ~~management~~“Controls ~~has~~and ~~conducted~~Procedures” anbelow ~~evaluation~~are ofongoing ~~the~~and ~~effectiveness~~we ofcontinue our ~~internal~~initiatives ~~control~~to ~~over~~implement ~~financial~~and ~~reporting~~document atpolicies, ~~December 31~~procedures, ~~2019.~~and Weinternal ~~identified~~controls. aRemediation ~~number~~ of the identified material weaknesses inand strengthening our internal control ~~over~~environment ~~financial~~will ~~reporting~~require ~~and~~a ~~concluded~~substantial ~~that,~~effort asthroughout of2021 ~~December 31,~~and ~~2019~~beyond, weas ~~did not maintain effective control~~ necessary.

36If we are unsuccessful in implementing or following our remediation plan, or fail to update our internal control over financial reporting as our business evolves, or if additional material weaknesses are found in our internal controls in the future, we may not be able to timely or accurately report our financial condition, results of operations or cash flows or to maintain effective disclosure controls and procedures. If we are unable to report financial information in a timely and accurate manner or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, an inability for us to be accepted for listing on any national securities exchange in the near future, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our Common Stock. Further, there are inherent limitations to the effectiveness of any system of controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. We could face additional litigation exposure and a greater likelihood of an SEC enforcement or other regulatory action if further restatements were to occur or other accounting-related problems emerge. In addition, any future restatements or other accounting-related problems may adversely affect our financial condition, results of operations and cash flows.

~~over~~Our ~~financial~~past ~~reporting~~failure ~~based~~to onprepare criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. For a detailed description of these material weaknesses, see Item 9A, "Controls and ~~Procedures."~~timely ~~Each~~file of our ~~material~~periodic ~~weaknesses~~report ~~results~~with ~~in more than a remote likelihood that a material misstatement of~~ the ~~annual~~SEC ormay ~~interim~~limit ~~financial statements that we prepare will not be prevented or detected. As a result, we must perform extensive additional work to obtain reasonable assurance regarding the reliability of~~ our ~~financial~~access ~~statements. In addition, on March 15, 2018, we filed an amendment~~ to ~~our Quarterly Report on Form 10-Q for~~ the ~~quarter~~public ~~ended~~markets ~~September 30, 2017 and on December 12, 2018, we filed an amendment~~ to ~~our~~raise ~~Quarterly~~debt ~~Report~~or onequity ~~Form 10-Q for the quarter ended June 30, 2018, in each case in order to revise and restate certain items disclosed in such reports~~capital. ~~Moreover, other material weaknesses may be identified.~~

WeSince ~~are~~we indid ~~the~~not ~~process~~file ofa ~~remedying~~prior ~~all~~periodic ofreport within the ~~identified~~timeframe ~~material~~required ~~weaknesses~~by the SEC, ~~and~~we ~~this~~are ~~work~~not ~~will~~currently ~~continue~~eligible ~~during~~to ~~fiscal~~use ~~2020~~a ~~and~~registration ~~beyond.~~statement ~~For~~on aForm ~~detailed~~S-3 ~~description~~that ofwould allow us to continuously incorporate by reference our ~~remedial~~SEC ~~efforts,~~reports ~~see~~into ~~Item 9A~~the registration statement, ~~"Controls~~or ~~and~~to ~~Procedures."~~use ~~There~~“shelf” ~~can~~registration bestatements noto ~~assurance~~conduct asofferings, tountil ~~when~~approximately ~~all~~one ofyear from the ~~material~~date ~~weaknesses~~we ~~will~~regained beand ~~remedied.~~maintain ~~Until~~status ~~our~~as ~~remedial~~a ~~efforts~~current ~~are~~and ~~completed,~~timely ~~management~~filer. ~~will~~If ~~continue~~we wish to ~~devote~~pursue ~~significant~~an ~~time~~equity ~~and~~or ~~attention~~debt tooffering ~~these~~within ~~efforts,~~the ~~and~~next year, we ~~will~~would ~~continue~~be required to ~~incur~~conduct ~~expenses~~the ~~associated~~offering ~~with~~on ~~the~~an ~~additional~~exempt ~~procedures~~basis, ~~and~~such ~~resources~~as ~~required~~in toaccordance ~~prepare~~with ~~our~~Rule ~~Consolidated~~144A, ~~Financial~~or ~~Statements~~file a registration statement on Form S-1. ~~Certain~~Using ofa ~~our~~Form ~~remedial~~S-1 ~~actions,~~registration ~~such~~statement asfor ~~hiring~~a ~~additional~~public ~~qualified~~offering ~~personnel~~would tolikely ~~implement~~take ~~our~~significantly ~~reconciliation~~longer than using a registration statement on Form S-3 and ~~review~~increase ~~procedures~~our transaction costs, ~~will~~and becould, ~~ongoing~~to ~~and~~the ~~will~~extent ~~result~~we inare ~~our~~not ~~incurring~~able ~~additional~~to ~~costs~~conduct ~~even~~offerings ~~after~~using alternative methods, adversely impact our ~~material~~liquidity ~~weaknesses~~or ~~are~~ability ~~remedied~~to raise capital in a timely manner.

If we are unsuccessful in implementing or following our remediation plan, or fail to update our internal control over financial reporting as our business evolves or to integrate acquired businesses into our controls system, or if additional material weaknesses are found in our internal controls in the future, we may not be able to timely or accurately report our financial condition, results of operations or cash flows or to maintain effective disclosure controls and procedures. If we are unable to report financial information in a timely and accurate manner or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, an inability for us to be accepted for listing on any national securities exchange in the near future, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our Common Stock. Further, there are inherent limitations to the effectiveness of any system of controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. We could face additional litigation exposure and a greater likelihood of an SEC enforcement or other regulatory action if further restatements were to occur or other accounting-related problems emerge. In addition, any future restatements or other accounting-related problems may adversely affect our financial condition, results of operations and cash flows.

Currency fluctuations and changes in exchange rates could adversely affect our business, financial condition, results of operations, cash flows, and/or common stock price.

Although we report our financial results in U.S. Dollars, a portion of our revenues and other liabilities and our costs are denominated in non-U.S. currencies, including the Euro and Canadian Dollar. Our results of operations and, in some cases, cash flows, have in the past been and may in the future be adversely affected by certain movements in currency exchange rates. The occurrence of any of the above risks could cause a material adverse effect on our business, financial condition, results of operations, cash flows, and/or share price. The recent COVID-19 pandemic could potentially create incremental foreign currency volatility and increase our risks.

The Company is exposed to market risk from fluctuations in currency exchange rates.

The Company operates in multiple jurisdictions denominated in currencies of the local jurisdiction. Additionally, the Company

may enter into acquisition, licensing, borrowing or other financial transactions that may give rise to currency exposure. Since

the Company cannot, with certainty, foresee and mitigate against such adverse fluctuations, fluctuations in currency exchange

rates could negatively affect the Company’s results of operations, financial position and cash flows.

Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited.

As of December 31, ~~2019~~2020, we had federal net operating loss carry forwards, or NOLs, of approximately $4810.57 million which expire from ~~2020~~2021 through 2037. Federal operating losses arising during and after 2018 are not subject to expiration; however, their usage except for losses incurred in the years 2018 through 2020 is limited to 80% of taxable income during the year of use assuming that they qualify for use under the CARES Act. Our ability to utilize our NOLs ~~may~~is be limited under Section 382 of the Internal Revenue Code. ~~The~~Our ~~limitations~~ability ~~apply~~to ifuse anNOLs ~~ownership~~is ~~change,~~subject asto ~~defined~~substantial bylimitation in future periods under certain provisions of Section 382, ~~occurs.~~of ~~Generally,~~the anInternal ~~ownership~~Revenue ~~change~~Code, ~~occurs~~which ~~when~~limit ~~certain~~the ~~shareholders~~utilization ~~increase~~of ~~their~~net ~~aggregate~~operating ~~ownership~~losses byupon a more than 50% ~~percentage~~change ~~points~~in ~~over~~ownership ~~their~~of ~~lowest~~our ~~ownership~~stock ~~percentage~~that inis aheld ~~testing~~by ~~period~~5% ~~(typically~~or ~~three~~greater ~~years)~~stockholders. ~~Our~~We ~~ability~~examined the application of Section 382 with respect to ~~use~~an ownership change that took place during 2010, as well as the limitation on the application of net operating loss carry forwards. isWe ~~subject~~believe that operating losses subsequent to ~~substantial~~the ~~limitation~~change date in ~~future~~2010 ~~periods~~(aggregating ~~under~~$26.5 ~~certain~~million) ~~provisions~~are ofnot subject to Section 382 oflimitations unless additional ownership changes occur. We reexamined the ~~Internal~~application ~~Revenue~~of ~~Code~~Section 382 for years after 2010 and discovered that changes in ownership occurred on August 19, ~~which~~2020, ~~limit~~October 31, 2020 and December 31, 2020. Additionally, as of December 31, 2020, we estimated an annual limitation of $28 thousand per year. The Company has also estimated the ~~utilization~~amounts of net operating ~~losses~~loss ~~upon~~and research and development tax credit carryforwards which will expire unutilized as a ~~more~~result ~~than~~of ~~50%~~its ~~change~~estimated annual limitations under Section 382 and has made the decision to write them down, detail of which is in ~~ownership~~the tax footnote. Finally, future use of ~~our~~the NOLs can be limited again if the Company has any additional changes in ownership under Section 382.

37We are subject to the provisions of ASC 740-10-25, Income Taxes (ASC 740) which prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, we undergo a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. For federal purposes, post 1998 tax years remain open to examination as a result of NOLs. We are currently open to audit by the appropriate state income taxing authorities for tax years 2016 to 2019. Currently, we are under audit by the state of New Jersey for the period 2015 to 2020.

~~stock~~For ~~that is held by 5% or greater stockholders. We examined~~ the ~~application~~tax ofyear ~~Section~~ended ~~382~~December ~~with~~31 ~~respect to an ownership change that took place during 2010~~2020, aswe ~~well~~have asrecorded ~~the~~an ~~limitation~~unrecognized ontax ~~the~~benefit ~~application~~ of ~~net operating loss carry forwards. We believe that operating losses subsequent to the change date in 2010 (aggregating~~ $~~26.5 million) are not subject to Section 382 limitations. We have estimated that the annual limitation starting in 2010 aggregates from $1.0 million to $~~2.3 million ~~per year including the effect of amortization of built in gains~~.

WeRisks ~~are~~Related ~~subject~~ to ~~the~~Our provisions of ASC 740-10-25, Income Taxes (ASC 740). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, we undergo a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. For federal purposes, (except for the years 2014 and 2015, which have been examined by the Internal Revenue Services), post 1998 tax years remain open to examination as a result of net operating loss carryforwards. We are currently open to audit by the appropriate state income taxing authorities for tax years 2014 through 2018. Indebtedness

~~The~~Our ~~2017~~substantial ~~comprehensive~~level ~~federal~~of ~~tax~~indebtedness ~~reform~~and ~~bill~~our current liquidity constraints could adversely affect our ~~business~~financial condition, cash flows and ~~financial~~our ~~condition~~ability to service our indebtedness.

OnWe ~~December~~have ~~22,~~a ~~2017,~~substantial ~~President~~amount ~~Trump~~of ~~signed~~indebtedness ~~into~~which ~~law~~will ~~the~~require ~~“United~~significant ~~States~~cash ~~Tax~~to ~~Cuts and Jobs Act,” or U~~service.S. ~~TCJA,~~As ~~significantly~~of ~~revising~~ the ~~Internal~~date ~~Revenue Code~~ of ~~1986,~~this asForm ~~amended,~~10-K orfiling ~~the~~and ~~Code.~~after ~~The~~giving ~~U.S.~~effect ~~TCJA,~~to ~~among~~the ~~other~~January ~~things,~~2021 ~~includes~~Debt ~~changes~~Exchange toTransactions, ~~U.S.~~our ~~federal~~total ~~tax~~consolidated ~~rates,~~indebtedness ~~imposes~~was ~~significant~~approximately ~~additional~~$109.7 ~~limitations~~million. onOur ~~the~~substantial ~~deductibility~~level of ~~interest~~indebtedness, ~~and~~coupled ~~net~~with ~~operating~~our ~~loss~~expectation ~~carryforwards,~~that ~~allows~~we ~~for~~will ~~the~~continue ~~expensing~~to ofincur ~~capital~~losses ~~expenditures,~~ and ~~puts~~generate ~~into~~negative ~~effect~~cash ~~the~~flows ~~migration~~ from aoperations ~~“worldwide”~~for ~~system~~the offoreseeable ~~taxation~~future, tomakes ait ~~territorial~~unlikely ~~system.~~that ~~Our~~we ~~net~~will ~~deferred~~be ~~tax~~able ~~assets~~to ~~and~~generate ~~liabilities~~sufficient ~~have~~cash ~~been~~to ~~revalued~~pay, atwhen due, the ~~newly~~principal ~~enacted~~of, ~~U.S.~~interest ~~corporate rate~~on, ~~and~~or ~~the~~other ~~impact~~amounts ~~was~~due ~~recognized~~ in ~~our~~respect ~~tax expense in the year~~ of ~~enactment~~our indebtedness. WeOur ~~continue~~substantial toindebtedness, ~~examine~~combined ~~the~~with ~~impact this tax reform legislation may have on~~ our ~~business.~~significant Weliquidity ~~urge~~constraints ~~investors~~and toother ~~consult~~financial ~~with~~obligations ~~their legal~~ and ~~tax~~contractual ~~advisers~~commitments, ~~regarding~~may ~~the~~have ~~implications~~a ofmaterial ~~the~~adverse ~~U.S.~~impact ~~TCJA~~ on ~~an investment in our common stock~~us.

WeTo ~~are~~the ~~currently~~extent ~~involved~~we inincur ~~antitrust~~new ~~litigation~~indebtedness, the related torisks we now face regarding our ~~pricing~~substantial ~~practices~~leverage could be intensified. ~~which~~Further, isour ~~also~~ability ~~part~~to meet our expenses, to remain in compliance with our covenants under our debt instruments and to make future payments in respect of aour ~~larger~~indebtedness ~~investigation~~depends on, among other factors, our operating performance, competitive developments and financial market conditions, all of which are significantly affected by ~~the~~financial, ~~attorneys~~business, ~~general~~economic, regulatory and other factors. We are not able to control many of ~~forty-five~~these ~~states~~factors. ~~into~~Given ~~alleged~~current ~~generic~~industry ~~drug~~and ~~price~~economic ~~fixing~~conditions, ~~schemes~~our cash flow may not be sufficient to allow us to pay principal and ~~asserting~~interest ~~claims~~on our debt and meet our other obligations. If we fail to meet our obligations under ~~federal~~our ~~antitrust~~existing ~~law~~or ~~(specifically~~future indebtedness and the lenders declare one or more events of default thereunder, ~~section~~you 1will suffer a total loss of your investment in our common stock, whether through pursuit of a reorganization under the ~~Sherman~~U.S. ~~Act)~~Bankruptcy Code, foreclosure or otherwise.

~~Thirteen~~If ~~putative~~we ~~class~~fail ~~actions~~to ~~have~~comply ~~been~~with ~~filed~~the ~~against~~financial uscovenants ~~and~~contained ~~have been consolidated~~ in ~~Multidistrict~~our ~~Litigation~~Senior inCredit ~~the Eastern District of Pennsylvania regarding the pricing of generic pharmaceuticals~~Facilities, ~~including~~ our ~~antifungal~~senior ~~skin~~lenders ~~cream~~could ~~Econazole~~accelerate ~~Nitrate 1% product. In addition, “Opt-out” antitrust lawsuits have been filed against us by various plaintiffs and~~ all ~~but~~amounts ~~one~~owing ~~has~~thereunder been consolidated into the Multidistrict Litigation. Each of the opt-out complaints names up to forty-seven defendants (including us) and involves allegations regarding the pricing of econazole along with up to 180 other drug productswhich, ~~most of which were not manufactured or sold by us during the period at issue. While we intend to vigorously defend our position~~ in ~~connection with these lawsuits~~turn, ~~the outcome of the litigation~~ could result in ~~serious~~the ~~fines~~acceleration ~~being~~of ~~levied~~all onamounts ~~us,~~owing ~~along~~under ~~with harm to~~ our ~~reputation.~~Series ~~Any~~D ~~negative outcome from this or any other investigation related to our pricing could have a material adverse effect on our business, financial condition and results of operations~~Notes.

We ~~may~~are be subject to, orcertain ~~may~~financial covenants as set forth in ~~the~~our ~~future~~Senior ~~become~~Credit ~~subject~~Facilities. ~~to,~~These Ufinancial covenants include a minimum liquidity covenant of $3.S.0 ~~federal~~million ~~and~~(on ~~state~~a consolidated basis) at all times, ~~and~~which ~~foreign~~increases ~~laws~~to ~~and~~$4.0 ~~regulations~~million ~~imposing~~(on ~~obligations~~a consolidated basis) on ~~how~~March we31, ~~collect~~2022. In addition, ~~use~~until March 31, ~~disclose~~2022, ~~store~~the ~~and~~Senior ~~process~~Credit ~~personal~~Facilities ~~information~~suspend testing of the minimum consolidated adjusted EBITDA covenant, at which time such minimum consolidated adjusted EBITDA covenant levels will resume to the levels in effect prior to the Second Lien Amendment. ~~Our~~ ~~actual~~In orthe ~~perceived~~event ~~failure~~that we are unable to comply with ~~such~~these ~~obligations~~covenants, ~~could~~or ~~result~~obtain a waiver from our senior lenders, the senior lenders would have the right, but not the obligation, to permanently reduce the commitments under the Senior Credit Facilities in ~~liability~~whole or ~~reputational~~in ~~harm~~part or to declare all or any portion of the outstanding balances thereunder due and ~~could~~payable. ~~harm~~We ~~our~~do ~~business~~not currently have available liquidity to repay these outstanding borrowings in the event of a default and acceleration. ~~Ensuring~~If ~~compliance~~we ~~with~~are ~~such~~unable ~~laws~~to ~~could~~raise ~~also~~additional ~~impair~~capital ~~our~~to ~~efforts~~meet these obligations, we may have to ~~maintain~~delay ~~and~~expenditures, ~~expand~~reduce the scope of our ~~customer~~manufacturing ~~base~~operations, ~~and~~reduce ~~thereby~~or ~~decrease~~eliminate one or more of our ~~revenue~~development programs, make significant changes to our operating plan, pursue a merger or other transaction involving a change of control, restructure our outstanding debt, or seek relief under the U.S. Bankruptcy Code.

InRestrictive ~~many~~covenants ~~activities,~~in including the conduct of clinical trials, we are subject to laws and regulations governing data privacy and the protection of health-related and other personal information. These laws and regulations govern our ~~processing~~Senior ofCredit ~~personal~~Facilities ~~data,~~may ~~including~~interfere ~~the collection, access, use, analysis, modification, storage, transfer, security breach notification, destruction and disposal of personal data. We must comply~~ with ~~laws~~our ~~and~~ability ~~regulations~~to ~~associated~~obtain ~~with~~additional ~~the~~advances ~~international~~under ~~transfer~~existing ofcredit ~~personal~~facilities ~~data based on the location in which the personal data originates and the location in which it is processed. In May 2016, the EU Parliament adopted the comprehensive General Data Privacy Regulation,~~ or ~~the GDPR~~ to, ~~among~~obtain ~~other~~new ~~things,~~financing ~~impose~~or ~~more stringent data protection requirements for processors and controllers of personal data and provide for greater penalties and fines for noncompliance, including fines in amounts up~~ to ~~€20~~engage ~~million or 4% of total worldwide annual turnover, whichever is higher. The GDPR became fully effective~~ in May 2018. In addition, in 2018, California adopted a new privacy law that went into effect on January 1, 2020, which borrows heavily from the GDPR. Complying with the enhanced obligations imposed by the GDPR and other ~~applicable international and US privacy laws and regulations may result in significant costs to our~~ business ~~and require us to amend certain of our business practices~~activities. ~~Further, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase. The future enactment of more restrictive laws,~~

38Our Senior Credit Facilities contain certain affirmative, negative, and financial covenants, including cross-defaults on other material indebtedness, as well as events of default triggered by a change of control and certain actions initiated by the FDA. These restrictions may interfere with our ability to obtain additional advances under our credit facilities or to obtain new financing or to engage in other business activities, which may inhibit our ability to grow our business and increase revenue.

rules or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our businesses, and noncompliance could result in regulatory penalties and significant legal liability.

Risks Related to Our Common Stock

~~Shares~~There ofis ~~our~~substantial ~~common~~doubt ~~stock~~about ~~can~~our beability ~~relatively~~to ~~illiquid~~continue ~~which~~as ~~may~~a ~~affect~~going ~~the trading price of our common stock~~concern.

~~For~~We ~~the~~have ~~year~~recently ~~ended~~experienced ~~December 31,~~significant ~~2019~~liquidity issues, ~~the~~and ~~average~~we ~~daily~~continue ~~trading~~to ~~volume~~experience ofsignificant ~~our~~financial ~~common~~and ~~stock~~operating onchallenges ~~the~~that ~~Nasdaq~~present ~~Global~~substantial ~~Select~~doubt ~~Market~~as ~~was~~to ~~411,037~~our ~~shares.~~ability Asto continue as a ~~result~~going concern. As of ~~our~~the ~~relatively~~date ~~small~~of ~~public~~this ~~float~~Form 10-K filing, ~~our~~we ~~common~~had ~~stock~~approximately ~~may~~$25.2 bemillion ~~less~~in ~~liquid~~cash ~~than~~and ~~the~~cash ~~stock~~equivalents. ofWe ~~companies~~have ~~with~~incurred ~~broader~~significant ~~public~~losses ~~ownership.~~and ~~Among~~generated ~~other~~negative ~~things~~cash flows from operations in recent years, ~~trading~~and ofwe aexpect ~~relatively~~to ~~small~~continue ~~volume~~to ofincur ~~our~~losses ~~common~~and ~~stock~~generate ~~may~~negative ~~have~~cash aflows ~~greater~~from ~~impact~~operations onfor the ~~trading~~foreseeable ~~price~~future. ~~for~~We ~~our~~are ~~shares~~not ~~than~~currently ~~would~~generating berevenues ~~the~~from ~~case~~operations ifthat are sufficient to cover our ~~public~~operating ~~float~~expenses, ~~were~~and ~~larger.~~our ~~The~~available ~~recent~~capital ~~COVID-19~~resources ~~pandemic~~are ~~may~~not ~~cause~~sufficient ~~increased~~for ~~risk~~us to continue to meet our ~~common~~obligations ~~stock’s~~as ~~liquidity~~they ~~and~~become ~~trading~~due, ~~price~~presenting substantial doubt as to our ability to continue as a going concern.

We are actively exploring additional sources of liquidity and we have ~~not~~engaged ~~paid~~financial ~~dividends~~and legal advisors to assist us in, among other matters, analyzing all available strategic alternatives to address our ~~common~~liquidity ~~stockholders~~and capital structure including, but not limited to, significant changes in our operating plan, pursuit of a merger or other change of control transaction, restructuring our outstanding debt via out of court methods. Should the ~~past~~company’s ~~nor~~liquidity dodrop below acceptable operating limits, we ~~expect~~may toalso ~~pay~~pursue ~~dividends~~additional inoptions including a reorganization under the ~~foreseeable~~U.S. ~~future~~Bankruptcy Code, ~~and~~or ceasing operations. However, we are unable to determine at this time whether any ~~return~~of these potential sources of liquidity will be available to us on ~~investment~~commercially ~~may~~acceptable terms, if at all, or if any such sources of liquidity, individually or taken together, will be ~~limited~~sufficient to address our liquidity needs. There is substantial doubt that these potential ~~future~~sources ~~appreciation~~of onliquidity will be realized or that they will be sufficient to generate the ~~value~~material amounts of additional liquidity we will require to fund our ~~common~~operations ~~stock~~for the foreseeable future.

WeIn ~~currently~~the ~~intend~~event towe ~~retain~~were ~~any future earnings~~ to ~~support~~pursue ~~the~~an ~~development~~in-court ~~and~~bankruptcy ~~expansion~~reorganization ofunder ~~our business and do not anticipate paying cash dividends in~~ the ~~foreseeable future~~U.S. ~~Our~~Bankruptcy ~~payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors~~Code, ~~including without limitation, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that~~ we ~~may~~would be asubject ~~party~~ to at the ~~time.~~risks Toand ~~the~~uncertainties ~~extent~~associated wewith dobankruptcy ~~not pay dividends~~proceedings, ~~our~~including ~~stock may be less valuable because a return on investment will only occur if and to~~ the ~~extent~~potential ~~our~~delisting ~~stock price appreciates, which may never occur. In addition, investors must rely on sales~~ of ~~their~~our common stock ~~after~~from ~~price~~trading ~~appreciation as the only way to realize their investment, and if the price of our stock does not appreciate, then there will be no return~~ on ~~investment~~Nasdaq. ~~Investors seeking cash dividends should not purchase our common stock.~~

IfWhile weour ~~fail~~recent toequitization ~~comply~~and ~~with~~refinancing transactions and our at-the-market ~~reporting~~equity ~~obligations~~offering ofhave ~~the~~reduced ~~Exchange~~our ~~Act~~leverage and ~~Section~~increased ~~404~~our cash and cash equivalents to approximately $25.2 million as of the ~~Sarbanes-Oxley~~date ~~Act~~ of ~~2002~~this Form 10-K filing, we nonetheless continue to experience significant financial and operating challenges that present substantial doubt as to our ability to continue as a going concern. We expect to continue to explore and pursue other strategic cash raising options to address our liquidity issues. If we continue to experience financial and operating challenges or ifare unsuccessful in raising additional capital, there is risk that it will be necessary for us to commence in-court reorganization proceedings. In the event we ~~fail~~were to ~~achieve~~pursue such a restructuring, our operations, our ability to develop and ~~maintain~~execute ~~adequate~~our ~~disclosure~~business ~~controls~~plan and ~~procedures~~our continuation as a going concern would be subject to the risks and ~~internal~~uncertainties ~~control~~associated ~~over~~with ~~financial~~bankruptcy ~~reporting~~proceedings, including, among others: the high costs of bankruptcy proceedings and related fees; our ~~business~~ability ~~results~~to maintain the listing of ~~operations~~our common stock on the Nasdaq Global Select Market; our ability to obtain sufficient financing to allow us to emerge from bankruptcy and ~~financial~~execute ~~condition~~our business plan post-emergence, and ~~investors’~~our ~~confidence~~ability into uscomply with terms and conditions of that financing; our ability to maintain our relationships with our lenders, ~~could~~counterparties, bevendors, ~~materially~~suppliers, ~~adversely~~employees ~~affected.~~and other third parties; our ability to maintain contracts that are

Ascritical ato ~~public~~our ~~company,~~operations weon ~~are~~reasonably ~~required~~acceptable toterms ~~comply~~and ~~with~~conditions; the ~~periodic~~ability ~~reporting obligations~~ of ~~the~~third ~~Exchange~~parties ~~Act~~to ~~including~~use ~~preparing~~certain ~~annual~~limited ~~reports,~~safe ~~quarterly~~harbor ~~reports~~provisions ~~and~~of ~~current reports. We did not timely file our Quarterly Report on Form 10-Q for~~ the ~~quarter ended September 30, 2018, which quarterly report was filed on December 12, 2018~~U.S. ~~Our~~Bankruptcy ~~failure~~Code to ~~prepare~~terminate ~~and~~contracts ~~disclose~~without ~~this~~first ~~information~~seeking inbankruptcy acourt ~~timely~~approval; ~~manner could subject us to penalties under federal securities laws, expose us to lawsuits~~ and ~~restrict~~the ~~our~~actions ~~ability to access financing. In addition, we are required under applicable law~~ and ~~regulations~~decisions toof ~~integrate~~ our ~~systems~~existing ofnoteholders ~~disclosure controls~~ and ~~procedures~~other ~~and~~third ~~internal~~parties ~~control~~who ~~over~~have ~~financial~~claims ~~reporting.~~and/or ~~Our~~interests ~~management~~in ~~assessed~~ our ~~existing~~bankruptcy ~~disclosure~~proceedings ~~controls~~that ~~and~~may ~~procedures~~be asinconsistent ofwith ~~December 31,~~our ~~2019,~~operational and ~~our~~strategic ~~management~~plans. ~~concluded~~Any ~~that~~reorganization ~~our~~effected ~~disclosure~~under ~~controls~~the ~~and~~U.S. ~~procedures~~Bankruptcy ~~were~~Code ~~not~~will ~~effective~~result asin ofa ~~December 31,~~total ~~2019,~~loss ~~solely because~~ of ~~the~~your ~~material~~investment ~~weaknesses~~ in our ~~internal~~common ~~control over financial reporting described herein in Item 9A(ii)~~stock.

IfIn addition, if we ~~fail~~were to ~~achieve~~commence ~~and~~bankruptcy ~~maintain~~proceedings, ~~the~~our ~~adequacy~~shares of ~~our~~common ~~disclosure~~stock ~~controls~~would ~~and~~likely ~~procedures~~be ~~and~~delisted ~~internal~~from ~~control~~trading ~~over~~on ~~financial~~Nasdaq. ~~reporting,~~Nasdaq werules ~~may~~provide ~~not~~that besecurities ~~able~~of toa ~~ensure~~company that wetrades ~~can~~on ~~conclude~~Nasdaq ~~that~~may webe ~~have~~delisted ~~effective~~in ~~disclosure~~the ~~controls~~event ~~and~~that ~~procedures~~such ~~and~~company ~~internal~~seeks ~~control~~bankruptcy ~~over~~protection. ~~financial~~In ~~reporting~~response into ~~accordance~~a ~~with~~Chapter ~~the~~11 ~~Sarbanes-Oxley~~filing, ~~Act~~Nasdaq ofwould ~~2002.~~likely ~~Moreover,~~issue ~~effective~~a ~~disclosure~~delisting ~~controls~~letter ~~and~~immediately ~~procedures~~following ~~and~~such ~~internal~~a ~~control~~filing. ~~over~~If ~~financial~~Nasdaq ~~reporting~~were ~~are~~to ~~necessary~~issue ~~for~~such usa toletter, ~~produce~~we ~~reliable~~would ~~financial~~have ~~reports~~the ~~and~~opportunity ~~are~~to ~~important~~appeal tothe ~~help~~determination ~~prevent~~during ~~fraud.~~which Astime athe ~~result~~delisting would be stayed, ~~our~~but ~~failure~~if towe ~~satisfy~~did ~~the~~not ~~requirements~~appeal ofor ~~Section~~otherwise ~~404~~were ofnot ~~the~~successful ~~Sarbanes-Oxley~~in ~~Act~~our ofappeal, ~~2002~~our oncommon astock ~~timely~~would ~~basis~~soon ~~could~~thereafter ~~result~~be indelisted ~~the~~and ~~loss~~our ofcommon ~~investor~~stock ~~confidence~~could be traded in the ~~reliability~~over-the-counter markets. Any delisting of our ~~financial~~common ~~statements,~~stock ~~which~~could result in ~~turn~~a ~~could~~substantial ~~harm~~decline in the value of our ~~business~~common ~~and~~stock ~~negatively~~including, ~~impact~~among other reasons, for the ~~trading~~reduced ~~price~~liquidity of our common stock.

Our principal stockholders, directors and executive officers own a significant percentage of our stock and will be able to exercise significant influence over our affairs.

Our current principal stockholders, directors and executive officers own in the aggregate a significant portion of the voting power of our capital stock. As a result, these stockholders, if acting together, would be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

Due to the concentration of common stock owned by significant stockholders, the sale of such stock might adversely affect the price of our common stock.

Our largest stockholders own shares of common stock that have been registered for resale under the Securities Act. The sale of such stock, depending on the interplay of numerous factors, including, without limitation, the method and timing of the sales, could substantially depress the value of our common stock. If such stockholders sold a significant amount of stock it could have an adverse effect on the price of the stock.

Our stock price is, and we expect it to remain, volatile and subject to wide fluctuations, which may make it difficult for stockholders to sell shares of common stock at or above the price for which they were acquired.

Our stock price is, and we expect it to remain, volatile,. ~~which~~In ~~could~~addition, ~~limit~~the ~~investors’~~trading ~~ability~~volume toin ~~sell~~our common stock athas aexperienced ~~profit~~significant swings and could cause significant price variations to occur. During the last two fiscal years, our stock price has closed at a low of $0.4048 in ~~the~~November ~~fourth~~2020 ~~quarter of 2019~~ and a high of $418.4670 in ~~the~~January ~~third quarter of 2018~~2019. The volatile price of our stock makes it difficult for investors to predict the value of their investment, to sell shares at a profit at any given time, or to plan purchases and sales in advance. A variety of factors may affect the market price of our common stock. These include, but are not limited, to:

•~~publicity~~the ~~regarding~~substantial ~~actual~~doubt oras ~~potential~~to ~~clinical~~our ~~results~~ability ~~relating~~ to ~~products~~continue ~~under~~as ~~development~~a bygoing ~~our competitors or us~~concern;

•~~delay~~the orexpectation ~~failure~~that inwe ~~initiating,~~will ~~completing~~continue orto ~~analyzing~~incur ~~nonclinical~~losses orand ~~clinical~~generate ~~trials~~negative orcash ~~the~~flows ~~unsatisfactory~~from ~~design~~operations orfor ~~results~~the offoreseeable ~~these trials~~future;

•~~achievement~~our orsubstantially ~~rejection~~limited ofavailable ~~regulatory~~liquidity ~~approvals~~and bycapital resources to meet our ~~competitors~~obligations oras usthey become due;

•the prospect that at some point in the future we may be forced to pursue a reorganization under the U.S. Bankruptcy Code;

•the amounts outstanding in borrowings under our Senior Credit Facilities which, as of the date of this Form 10-K filing, were approximately $102.9 million, and the potential we may experience one or more defaults or events of default under our Senior Credit Facilities;

•the ongoing impacts and developments related to the COVID-19 pandemic;

•the delays in production relating to the FDA Warning Letter, the FDA’s significant reduction of on-site inspections during the COVID-19 pandemic and the product recalls, long-term production pauses, short-term clear path to market production pauses, and continued production with minor process corrections arising out of issues identified in connection with our review of matters related to the FDA Warning Letter;

•receipt or rejection of regulatory approvals by our competitors or us;

•announcements of technological innovations or new commercial products by our competitors or us;

•developments concerning proprietary rights, including patents;

•developments concerning our collaborations;

•legislative, administrative, regulatory ~~developments~~or inother actions affecting our business or our industry, including positions taken by the ~~U.S.~~FDA, ~~and~~the ~~foreign~~Internal ~~countries~~Revenue Service or other governmental or quasi-governmental agencies;

•anticipated or pending investigations, proceedings or litigation that involve or affect us;

•economic or other crises in the markets in which we compete, and other external factors;

•stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the cosmetic, pharmaceutical and consumer products industry;

•actual or anticipated sales of our common stock, including sales by our directors, officers or significant stockholders;

•additions or departures of key personnel;

•period-to-period fluctuations in our revenues and other results of operations;

•speculation about our business in the press or the investment community; ~~and~~

•~~global~~the ~~events~~occurrence ~~such~~of asany ~~natural~~of ~~disasters,~~the ~~pandemics~~other risk factors included or ~~acts~~incorporated ofby ~~terrorism.~~reference in this prospectus supplement; and

•global and domestic events such as natural disasters, pandemics or acts of terrorism or insurrection.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation, even if it does not result in liability for us, could result in substantial costs to us and divert management’s attention and resources.

~~Risks~~The ~~Related~~Series D Preferred Stock ranks senior to our ~~Notes~~common stock with respect to dividends, distributions and ~~Senior~~liquidation. ~~Credit~~In ~~Facilities~~addition, the conversion of our shares of Series D Preferred Stock could cause substantial dilution to the holders of shares of our common stock.

WeThe ~~may~~Series ~~not~~D ~~have~~Preferred ~~the~~Stock ~~ability~~ranks, with respect to ~~raise~~dividend ~~the~~rights ~~funds~~and ~~necessary~~rights toupon ~~settle~~our ~~conversions~~liquidation, ofdissolution ~~the~~or ~~Notes~~winding up, ~~purchase~~senior ~~the~~to ~~Notes~~our ascommon ~~required~~stock. ~~pursuant~~The holders of Series D Preferred Stock are entitled to ~~the~~dividends ~~terms~~on shares of ~~the~~Series ~~indentures~~D ~~governing~~Preferred Stock equal (on an as-if-converted-to-common-stock basis) to and in the ~~Notes~~same orform ~~pay~~as dividends (other than dividends in the ~~redemption~~form ~~price~~of ~~for~~common ~~any~~stock) ~~Notes~~actually wepaid ~~redeem~~on shares of common stock when, as and ~~our~~if ~~future~~such ~~debt~~dividends ~~may~~(other ~~contain~~than ~~limitations~~dividends in the form of common stock) are paid on ~~our~~shares ~~ability~~of common stock. No other dividends shall be paid on shares of Series D Preferred Stock and we are not permitted to pay ~~cash~~any ~~upon~~dividends ~~conversion~~(other orthan ~~repurchase~~dividends in the form of common stock) on shares of common stock unless it simultaneously complies with the ~~Notes~~immediately preceding sentence.

OnUpon ~~December~~the ~~16,~~occurrence ~~2014~~of a Corporation Sale (as defined below), we ~~completed~~must ~~the~~redeem ~~sale~~each share of ~~$125~~Series ~~million~~D ~~aggregate~~Preferred ~~principal~~Stock by paying each holder of Series D Preferred Stock an amount equal to the amount such holder would have received in connection with such Corporation Sale had such holder converted such share of 3Series D Preferred Stock into common stock immediately prior to such Corporation Sale.~~75%~~ ~~Convertible~~Such ~~Senior~~payment ~~Notes~~must ~~due~~be ~~2019~~made ~~(the~~prior and in preference to any payments made on our common stock in respect of such Corporation Sale. A “~~2019~~Corporation ~~Notes~~Sale” means (i) toour ~~Deutsche~~consolidation ~~Bank~~or ~~Securities~~merger ~~Inc.~~with ~~and~~or ~~J.P.~~into ~~Morgan~~another ~~Securities~~entity ~~LLC~~or asother corporate reorganization in which we are not the ~~initial~~surviving ~~purchasers~~entity ~~and~~(excluding onany merger effected exclusively for the purpose of changing our domicile), (ii) a transaction or series of related transactions in which in excess of fifty percent (50%) of our voting power is transferred to a third party (or group of affiliated third parties), excluding a bona fide equity financing transaction, or (iii) a sale, transfer, exclusive license or other disposition (but not including a transfer or disposition by pledge or mortgage to a bona fide lender) of all or substantially all of our assets.

40Additionally, each share of Series D Preferred Stock is convertible into 200 shares of common stock as follows: (i) at any time and from time to time to the extent that the aggregate number of shares of common stock to be issued upon such conversion is less than or equal to the number of authorized shares of common stock available for issuance and not reserved or set aside for other purposes and (ii) at any time and from time to time, in full or in part, from and after stockholder approval of an increase in the number of authorized shares of common stock or a reverse split of our common stock to allow for full conversion of the Series D Preferred Stock. The number of shares of common stock issuable upon conversion of the Series D Preferred Stock is subject to appropriate adjustment in the event of stock dividends, stock splits or similar events affecting our common stock. Any conversion of shares of Series D Preferred Stock into shares of common stock may cause substantial dilution to the holders of our common stock, including purchasers of our common stock in connection with any offering.

~~December~~We ~~22,~~may ~~2014,~~need ~~we issued~~ to ~~the~~raise ~~initial purchasers an~~ additional ~~$18.75~~funds million aggregate principal amount of the Notes. On May 1, 2018, we entered into separate, privately negotiated exchange agreements with certain holders of the Notes to exchange an aggregate principal amount of approximately $75 million of the 2019 Notes in ~~exchange for an equal amount of our 4.75% Convertible Senior Notes due May 1, 2023 (~~the ~~“2023 Notes”). On October 31~~future, ~~2019,~~which the Company closed its offering of the 2023 Series B Notes in the aggregate principal amount of $34.4 million due May 1, 2023 (“2023 Series B Notes” and together with the 2023 Notes, the “Notes”). As part of the offering, the Company entered into agreements with certain holders of its existing 2023 Notes to exchange $9.0 million of the 2023 Notes for $5.1 million of the 2023 Series B Notes. The gross cash proceeds of approximately $29.3 million from the financing were used to extinguish the Company’s existing 2019 Notes in December 2019 and intended to pay amounts owing with respect to other indebtedness and to fund general corporate and working capital requirements. Pursuant to the terms of the indentures governing the Notes, following certain events, holders of the Notes will have the right to require us to purchase their Notes for cash. Such event may ~~also~~not constitute an event of default or prepayment under, and result in the acceleration of the maturity of, our then-existing indebtedness. We cannot assure you that we will have sufficient financial resources, or will be ~~able~~available toon ~~arrange~~acceptable financing, to pay the purchase price in cash with respect to any Notes surrendered by holders for purchase at that time, make cash payments upon conversions or pay the redemption price for any Notes we redeem. In addition, restrictions in our then existing credit facilities or other indebtedness, if any, may not allow us to purchase the Notes (even if required pursuant to the terms ~~of the indentures), make cash payments upon conversions of the Notes~~ or ~~pay~~at ~~the redemption price for any Notes we redeem would result in an event of default with respect to the Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any~~all. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and purchase the Notes, make cash payments upon conversions thereof or pay the redemption price for any Notes we redeem. The recent COVID-19 pandemic may create incremental challenges in securing the funds required to pay our Notes.

~~Our~~In ~~substantial~~order ~~indebtedness~~to ~~could~~raise ~~materially~~additional ~~adversely~~capital, ~~affect~~we may need to continue to engage in additional financings in the future in order to cover our ~~business~~operating expenses and to otherwise meet our obligations as they come due. While there can be no assurances that any such future financings will ever be completed, ~~financial~~they ~~condition~~would orlikely ~~results~~involve ofsignificant ~~operations~~additional ~~and~~dilution ~~prevent~~of usthe ~~from~~interests ~~fulfilling~~of our ~~obligations~~stockholders ~~under~~upon the ~~Notes~~issuance of convertible debt instruments, common stock or other securities. Attaining such additional financing may not be possible, or if additional capital may be otherwise available, the terms on which such capital may be available may not be commercially feasible or advantageous to investors participating in such offering, including in respect of our current inability to utilize a shelf registration statement on Form S-3.

AsShares of ~~December 31, 2019,~~ our ~~total~~common ~~consolidated~~stock ~~indebtedness~~can ~~was~~be ~~$214.0~~relatively ~~million.~~illiquid ~~Our~~which ~~substantial level of indebtedness coupled with our net loss increases the possibility that we~~ may beaffect ~~unable to generate cash sufficient to pay, when due,~~ the ~~principal~~trading ~~of,~~price ~~interest on, or other amounts due in respect~~ of our ~~indebtedness.~~common ~~The recent COVID-19 pandemic may add to our indebtedness~~stock. ~~Our substantial indebtedness, combined with our other financial obligations and contractual commitments, may have a material adverse impact on us. For example, it could~~

~~•make~~As ita ~~difficult~~result ~~for~~of usour torelatively ~~satisfy~~small public float, our ~~obligations~~common stock may be less liquid than the stock of companies with ~~respect~~broader public ownership. Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our shares than would be the case if our public float were larger. The recent COVID-19 pandemic may cause increased risk to our ~~outstanding~~common ~~and~~stock’s ~~other~~liquidity ~~future~~and ~~debt~~trading ~~obligations;~~price.

~~•increase~~Our ~~our~~principal ~~vulnerability~~stockholders toown ~~general~~a ~~adverse~~significant ~~economic~~percentage ~~conditions~~of orour astock ~~downturn~~and inwill ~~the~~be ~~industries~~able into ~~which~~exercise wesignificant ~~operate;~~influence over our affairs.

~~•impair~~Our principal stockholders own in the aggregate a significant portion of our ~~ability~~capital stock. As a result, these stockholders, if acting together, would be able to ~~obtain~~influence ~~additional~~or ~~financing~~control inmatters ~~the~~requiring ~~future~~approval ~~for~~by ~~working~~our ~~capital~~stockholders, ~~investments~~including the election of directors and the approval of mergers, acquisitions ~~and~~or other ~~general~~extraordinary ~~corporate~~transactions. ~~purposes;~~This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an

~~•require~~opportunity us to ~~dedicate~~receive a ~~substantial~~premium ~~portion~~for oftheir ~~our~~common ~~cash~~stock ~~flows~~as topart ~~the~~of ~~payment~~a tosale ~~our financing sources, thereby reducing the availability~~ of our ~~cash~~company ~~flows~~and tomight ~~fund~~ultimately ~~working~~affect ~~capital,~~the ~~investments,~~market ~~acquisitions~~price ~~and~~of ~~other~~our ~~general~~common ~~corporate~~stock. ~~purposes; and~~

~~•place~~Due usto atthe aconcentration ~~disadvantage~~of ~~compared~~common tostock owned by significant stockholders, the sale of such stock might adversely affect the price of our ~~competitors~~common stock.

~~Servicing~~Our ~~our~~largest ~~debt~~stockholders ~~requires~~own ashares ~~significant~~of ~~amount~~common stock that are subject to registration rights or that are otherwise eligible for resale under the Securities Act. The sale of ~~cash~~such stock, depending on the interplay of numerous factors, including, without limitation, the method and wetiming ~~may~~of ~~not~~the ~~have~~sales, ~~sufficient~~could ~~cash~~substantially ~~flow~~depress ~~from~~the value of our ~~business~~common tostock. ~~pay~~If ~~our~~such ~~debt~~stockholders sold a significant amount of stock it could have an adverse effect on the price of the stock.

~~Our~~We ~~ability~~have tonot ~~make~~paid ~~payments~~dividends ~~of the principal of,~~ to ~~pay interest on, to pay any cash due upon conversion of or to refinance~~ our ~~indebtedness,~~common ~~including~~stockholders ~~the~~in ~~Notes and Senior Credit Facilities, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control, which is increased as a result of~~ the ~~recent~~past ~~COVID-19~~nor ~~pandemic.~~do ~~Our~~we ~~business~~expect ~~may not continue~~ to ~~generate~~pay ~~cash~~dividends ~~flow from operations~~ in the foreseeable future, ~~sufficient to service our debt~~ and ~~make~~any ~~necessary~~return capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on ~~terms~~investment ~~that~~ may be ~~onerous~~limited ~~or highly dilutive. Our ability~~ to ~~refinance~~potential ~~our~~future ~~indebtedness~~appreciation ~~will depend~~ on the ~~capital~~value ~~markets and our financial condition at such time. We may not be able to engage in any~~ of ~~these activities or engage in these activities on desirable terms, which could result in a default on~~ our ~~debt~~common ~~obligations~~stock.

We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including without limitation, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. To the extent we ~~issue~~do ~~shares~~not ofpay dividends, our ~~common~~ stock tomay ~~satisfy~~be ~~all~~less orvaluable because a ~~portion~~return ofon investment will only occur if and to the extent our ~~conversion~~stock ~~obligation~~price appreciates, ~~conversions~~which may never occur. In addition, investors must rely on sales of ~~the~~their ~~Notes~~common ~~will~~stock ~~dilute~~after price appreciation as the ~~ownership~~only ~~interest~~way to realize their investment, and if the price of our ~~existing~~stock ~~stockholders~~does not appreciate, ~~including~~then ~~holders~~there ~~who~~will ~~had~~be ~~previously~~no ~~converted~~return ~~their~~on ~~Notes~~investment. Investors seeking cash dividends should not purchase our common stock.

The holders of our Notes can require us, under certain circumstances, to convert their Notes into shares of our common stock. We have the option to satisfy this conversion obligation with cash, shares of our common stock or a combination of cash and shares of our common stock at our election. To the extent we issue shares of our common stock to satisfy all or a portion of our conversion obligation, the conversion of some or all of the Notes will dilute the ownership interests of our existing stockholders. Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could depress the price of our common stock.

Restrictive covenants in our Senior Credit Facilities may interfere with our ability to obtain additional advances under existing credit facilities or to obtain new financing or to engage in other business activities.

Our Senior Credit Facilities contain certain affirmative, negative, and financial covenants, including cross-defaults on other material indebtedness, as well as events of default triggered by a change of control and certain actions initiated by the FDA.

These restrictions may interfere with our ability to obtain additional advances under our credit facilities or to obtain restrictions may interfere with our ability to obtain additional advances under existing credit facilities or to obtain new financing or to engage in other business activities, which may inhibit our ability to grow our business and increase revenue.

Our ability to satisfy our obligations pursuant to our Senior Credit Facilities depends on our future operating performance and on economic, financial, competitive, and other factors beyond our control.

On December 13, 2018, we entered into: (i) a First Lien Revolving Credit Agreement, by and among us, as the borrower, certain of our subsidiaries, as guarantors, the lenders from time to time party thereto, and ACF Finco I LP, as administrative agent (the “First Lien Agent”) (as amended on October 31, 2019, the “First Lien Credit Agreement”) and (ii) a Second Lien Credit Agreement, by and among us, as the borrower, certain of our subsidiaries, as guarantors, the lenders from time to time party thereto, and Ares Capital Corporation, as administrative agent (the “Second Lien Agent”) (as amended on February 8, 2019, June 29, 2019 and October 31, 2019, the “Second Lien Credit Agreement” and, together with the First Credit Agreement, the “Senior Credit Facilities”). The Senior Credit Facilities consist of a first lien asset based revolving credit facility of up to $25.0 million ("Revolver") and an aggregate of $80.0 million in original principal amount of second lien term loans consisting of a $50.0 million initial term loan and a $30.0 million delayed draw term loan A (collectively, the “Term Loans”). The Senior Credit Facilities also included a $15.0 million delayed draw term loan b commitment, which remained undrawn and expired on October 31, 2019. As of December 31, 2019, $25.0 million was drawn under the Revolver and $88.5 million of Term Loans were outstanding. As of December 31, 2019, the Revolver was fully drawn. The Revolver bears interest at a fluctuating rate of interest equal to one, two, three or six-month LIBOR plus a margin of 3.75% or a rate based on the prime rate plus a margin of 2.75%. The Revolver matures on the earliest to occur of the June 23, 2024 and the date of that is 91 days prior to the maturity date of each of (x) the 2023 Notes and (y) the 2023 Series B Notes. The Term Loans bear interest at a fluctuating rate of interest equal to one, two, three or six-month LIBOR plus a margin of 8.75% or a rate based on the prime rate plus a margin of 7.75%. The Term Loans mature on the earliest to occur of the June 23, 2024 and the date of that is 181 days prior to the maturity date of each of (x) the 2023 Notes and (y) the 2023 Series B Notes. Interest on the Senior Credit Facilities is payable in cash quarterly in arrears (or more frequently in connection with customary LIBOR interest provisions), provided, that the Company may elect (and has covenanted to the lenders under its First Lien Credit Agreement to) pay interest on the Term Loans in kind until the earlier to occur of the date upon which Company has provided financial statements demonstrating twelve-months of revenue of at least $125,000,000 and (ii) December 28, 2020. As the interest rates applicable to the Senior Facilities are fluctuating, we do have market risk related thereto.

We may not generate sufficient cash flow from operations to cover required interest and principal payments, which could result in an event of default and acceleration of our obligations under these agreements, which may require us to seek additional financing or restructure existing debt on unfavorable terms. In addition, adverse changes in credit markets could increase our cost of borrowing and make it more difficult for us to obtain financing. The recent COVID-19 pandemic may negatively impact our ability to make scheduled payments or satisfy other obligations pursuant to our Senior Credit Facility.

We will continue to have the ability to incur debt; if we incur substantial additional debt, these higher levels of debt may affect our ability to pay the principal of and interest on the Notes and the Senior Credit Facilities.

We and our subsidiaries may be able to incur substantial additional debt in the future, subject to the restrictions contained in our debt instruments, some of which may be secured debt. The indentures governing the 2023 Notes do not restrict our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of net worth or liquidity. Thereafter, we and the subsidiary guarantors of the 2023 Series B Notes will continue to be restricted from incurring indebtedness, with

exceptions and baskets as further set forth in the indenture governing the 2023 Series B Notes. All restrictions on the incurrence of indebtedness by us and the subsidiary guarantors in the indenture governing the 2023 Series B Notes will terminate on the first date on which the aggregate outstanding principal balance of the notes is equal to or less than 10% of the original principal balance of the 2023 Series B Notes. If we incur substantial additional indebtedness in the future, these higher levels of indebtedness may affect our ability to pay the principal of and interest on the Notes, or any fundamental change purchase price or any cash due upon conversion, to pay the principal of and interest on our Senior Credit Facilities, and our creditworthiness generally.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

The Company’s executive administrative offices are located in Buena, New Jersey, in two facilities now totaling approximately 110,000 square feet with the expansion of the facility completed in the fourth quarter of 2018 isand was built on 8.44 acres of land in 1995, which we own. In 2017 we acquired an additional 3.0 acres of adjacent land in support of our facility expansion. We now own a total of 11.44 acres at our Buena facility. One of those facilities is used for production, product development, marketing and warehousing for our own generic prescription pharmaceutical products and pharmaceutical, cosmeceutical and cosmetic products. In July 2016, the Company completed the first phase of the facility expansion in the Buena, New Jersey location. The facility now houses our new product development laboratory for work on topical and sterile pharmaceuticals. The other facility is currently being expanded to increase our manufacturing capacity for topical products, and will also enable the production of sterile injectable products in both vial and ampule presentations. We lease additional square feet of warehouse space as needed in Vineland, New Jersey, lease approximately 9,500 square feet of corporate office space in Iselin, New Jersey, and lease approximately 4,000 square feet of office space in Mississauga, Canada. ~~The Company also leases approximately 3,000 square feet of office and laboratory space in Tallinn, Estonia.~~

Item 3. LEGAL PROCEEDINGS

To date, thirteen putative class action antitrust lawsuits have been filed against the Company along with co-defendants, including Taro Pharmaceuticals U.S.A., Inc. and Perrigo New York Inc., regarding the pricing of generic pharmaceuticals, including econazole nitrate. The class plaintiffs seek to represent nationwide or state classes consisting of persons who directly purchased, indirectly purchased, paid and/or reimbursed patients for the purchase of generic pharmaceuticals from as early as July 1, 2009 until the time the defendants’ allegedly unlawful conduct ceased or will cease. The class plaintiffs seek treble damages for alleged overcharges during the alleged period of conspiracy, and certain of the class plaintiffs also seek injunctive relief against the defendants. The actions have been consolidated by the Judicial Panel on Multidistrict Litigation to the U.S. District Court, Eastern District of Pennsylvania for pre-trial proceedings as part of the In re Generic Pharmaceuticals Pricing Antitrust Litigation matter. On October 16, 2018 the court dismissed the class plaintiffs’ claims against the Company with leave to replead. On December 21, 2018 the class plaintiffs filed amended complaints, which the Company moved to dismiss on February 21, 2019. ~~This motion remains pending.~~ On December 19, 2019 certain class plaintiffs filed a further complaint that included additional claims against the Company based on the Company’s sales of fluocinolone acetonide. A ~~motion~~On October 16, 2020 and October 21, 2020, class plaintiffs amended or moved to ~~dismiss~~amend ~~this~~their ~~complaint~~complaints ~~has~~to ~~not~~add ~~yet~~additional ~~been~~allegations, ~~filed~~mooting the motion to dismiss.

“Opt-out” antitrust lawsuits have additionally been filed against the Company by various plaintiffs, including Humana Inc.; The Kroger Co. et al.; United HealthCare Services, Inc.; Molina Healthcare, Inc.; MSP Recovery Claims, Series LLC; Health Care Service Corp.; ~~and~~ Harris County, Texas~~. All~~; ~~but~~Rite ~~one~~Aid ofCorporation; ~~these~~JM Smith Corporation; and Suffolk County, New York. These complaints have been consolidated into the In re Generic Pharmaceuticals Pricing Antitrust Litigation matter in the U.S. District Court, Eastern District of Pennsylvania by the Judicial Panel on Multidistrict Litigation. Each of the opt-out complaints names upseveral todozen ~~forty-seven~~ defendants (including the Company) and involves allegations regarding the pricing of econazole (and in some cases fluocinolone acetonide) along with up to 180 other drug products, most of which were not manufactured or sold by the Company during the period at issue. The opt-out plaintiffs seek treble damages for alleged overcharges for the drug products identified in the complaint during the alleged period of conspiracy, and some also seek injunctive relief. A motion to dismiss the Humana Inc. and The Kroger Co., et al. opt-out complaints was filed on February 21, 2019. Aand ~~motion~~remains ~~to dismiss the remaining opt-out complaints has not yet been filed~~pending.

~~Due~~A tocomplaint ~~the~~has ~~early~~also ~~stage~~been filed by state Attorneys General based on pricing of ~~these~~topical ~~cases~~drugs, weand ~~are~~naming ~~unable~~the toCompany ~~form~~as a ~~judgment~~defendant atwith ~~this~~respect ~~time~~to aseconazole tonitrate. ~~whether~~The anAttorney ~~unfavorable~~General ~~outcome~~plaintiffs isseek ~~either~~treble ~~probable~~damages orfor ~~remote~~alleged orovercharges toduring ~~provide~~the analleged ~~estimate~~period of conspiracy. This action has been consolidated by the ~~amount~~Judicial orPanel ~~range~~on ofMultidistrict ~~potential~~Litigation ~~loss~~to the U.S. WeDistrict ~~believe~~Court, ~~these~~Eastern ~~cases~~District ~~are~~of ~~without~~Pennsylvania ~~merit,~~for ~~and~~pre-trial weproceedings ~~intend~~as topart ~~vigorously~~of ~~defend~~the ~~against~~In ~~these~~re ~~claims~~Generic Pharmaceuticals Pricing Antitrust Litigation matter.

OnIn ~~October~~addition, 20on June 3, ~~2017~~2020, a ~~Demand~~putative ~~for~~class ~~Arbitration~~action lawsuit was filed ~~with~~in the ~~American~~Federal ~~Arbitration~~Court ~~Association~~of byCanada ~~Stayma~~against ~~Consulting~~the ~~Services~~Company and its Canadian subsidiary, ~~Inc.~~Teligent ~~(“Stayma”)~~Canada, ~~against~~along ~~the~~with ~~Company~~over ~~regarding~~fifty ~~the~~other ~~Company’s~~pharmaceutical ~~development~~defendant ~~and~~companies. ~~manufacture~~The ~~for~~Canadian ~~Stayma~~lawsuit ofalleges ~~two~~that the generic drug ~~products,~~manufacturer ~~one~~defendants aconspired ~~lotion~~to ~~and~~allocate ~~one~~the aCanadian ~~cream~~market and customers, ~~containing~~fix ~~0.05%~~prices ofand maintain the ~~active~~supply ~~pharmaceutical~~of ~~ingredient~~generic ~~flurandrenolide. The~~drugs ~~Company~~in ~~developed~~Canada ~~the~~to ~~two~~artificially ~~products~~maintain market share and ~~Stayma~~higher ~~purchased~~generic ~~commercial~~drug ~~quantities~~prices in violation of ~~each;~~Canada’s ~~however,~~Competition ~~Stayma~~Act. ~~alleges~~In ~~that~~terms of the Company ~~breached~~and ~~agreements~~Teligent ~~between~~Canada, without limiting the ~~parties~~general byallegation ~~developing~~of ana ~~additional~~general ~~and~~conspiracy ~~different~~over the generic drug ~~product~~market, anthe ~~ointment,~~lawsuit ~~containing~~specifically ~~flurandrenolide,~~asserts ~~and~~allegations ~~failing~~in relation to ~~meet~~econzaole ~~certain~~dating ~~contractual~~back ~~requirements.~~to ~~Stayma~~September ~~seeks~~2013 ~~monetary~~and ~~damages~~continuing to the present. The ~~arbitrator~~representative ~~has~~individual ~~issued~~plaintiff anseeks ~~interim~~to ~~award~~represent ~~finding~~a ~~that~~class ~~the~~comprised ~~Company~~of isall ~~not~~persons ~~liable~~and toentities ~~Stayma~~in onCanada ~~two~~who, offrom ~~Stayma’s~~January ~~three~~1, ~~claims~~2012 ~~against~~to the ~~Company~~present, purchased generic drugs in the private sector (i. ~~The~~e. ~~third~~purchases ~~claim~~made ~~will~~by ~~proceed~~individuals toout-of-pocket aand ~~damages~~by ~~phase~~individuals and businesses through private drug plans). The ~~Company~~plaintiff ~~has~~is ~~argued~~alleging ~~that~~aggregate ~~Stayma~~damages ~~did~~of ~~not~~CDN$2.75 ~~suffer~~billion ~~any~~for ~~damages~~harm ~~related~~caused to ~~this~~class ~~claim~~members ~~and~~being ~~will~~charged ~~vigorously~~increased ~~pursue~~prices ~~complete~~as ~~dismissal~~a result of the ~~third~~alleged ~~claim~~conspiracy. In ~~addition,~~The ~~the~~Canadian ~~arbitrator~~lawsuit ~~will~~is ~~determine~~at ~~money~~a ~~damages~~very ~~owed~~early bystage ~~Stayma~~and to the Company ~~relating~~is unable to ~~Stayma’s~~form ~~failure~~a judgment at this time as to ~~pay~~whether ~~several~~an ~~past~~unfavorable ~~due~~outcome ~~invoices~~is probable or remote or to provide an estimate of ~~approximately~~the $1amount or range of potential loss.~~7 million~~ The Company believes this lawsuit is without merit and it intends to vigorously defend against the claim.

On December 13, 2018, Valdepharm SA filed a lawsuit alleging that the Company breached contracts regarding two drug products that the Company had sought to have Valdepharm manufacture. On February 12, 2019 the Company answered the complaint and counterclaimed, alleging that Valdepharm breached the contracts by failing to perform its work in compliance with FDA regulations and current Good Manufacturing Practices. Each party seeks damages associated with the alleged breach and related claims. Due to the early stage of ~~the~~these ~~case~~cases, wethe ~~are~~Company is unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss. WeThe ~~believe~~Company ~~the~~believes ~~claims~~these ~~against~~cases ~~Teligent~~ are without merit, and weit ~~intend~~intends to vigorously defend against ~~them~~these claims.

On ~~April~~October 1520, ~~2019~~2017, a ~~federal~~Demand ~~class~~for ~~action~~Arbitration was filed with the ~~Oklahoma~~American ~~Police~~Arbitration ~~Pension~~Association ~~Fund~~by ~~and~~Stayma ~~Retirement~~Consulting ~~System~~Services, Inc. (“Stayma”) against the Company ~~and~~regarding ~~certain individual defendants in~~ the ~~U.S.~~Company’s ~~District~~development ~~Court,~~and ~~Southern~~manufacture ~~District~~for ofStayma ~~New York. The lawsuit was brought on behalf~~ of ~~persons~~two orgeneric ~~entities~~drug ~~who purchased or otherwise acquired publicly-traded Teligent~~products, ~~Inc.~~one ~~securities~~a ~~from~~lotion ~~March~~and 7,one ~~2017~~a ~~through November 6~~cream, ~~2017~~containing 0. ~~The~~05% ~~complaint~~of ~~alleges~~the ~~that~~active ~~defendants~~pharmaceutical ~~made~~ingredient ~~false~~flurandrenolide. orThe ~~misleading~~Company ~~statements~~developed ~~regarding~~ the ~~Company’s~~two ~~business,~~products ~~operational,~~ and ~~compliance~~Stayma ~~policies~~purchased incommercial ~~violation~~quantities of ~~U.S.~~each; ~~securities~~however, ~~laws. The~~Stayma ~~plaintiff~~alleges ~~seeks~~that tothe ~~recover~~Company ~~compensable~~breached ~~damages. Due~~agreements tobetween the ~~early~~parties ~~stage~~by ofdeveloping ~~these~~an ~~cases,~~additional weand ~~are~~different ~~unable~~generic todrug ~~form~~product, aan ~~judgment~~ointment, atcontaining ~~this~~flurandrenolide, ~~time~~and asfailing to ~~whether~~meet ancertain ~~unfavorable~~contractual ~~outcome~~requirements. isStayma ~~either~~seeks ~~probable~~monetary ordamages. ~~remote~~The orarbitrator tohas ~~provide~~issued an ~~estimate~~interim ofaward ~~the~~finding ~~amount~~that orthe ~~range~~Company ofis ~~potential~~not ~~loss.~~liable Weto ~~believe~~Stayma ~~these~~on ~~cases~~two ~~are~~of ~~without~~Stayma’s ~~merit,~~three ~~and we intend to vigorously defend against these~~ claims.

44against the Company. The third claim has proceeded to a damages phase, which is ongoing. The Company has argued that Stayma did not suffer any damages related to this claim and will vigorously pursue complete dismissal of the third claim. In addition, the arbitrator will determine money damages owed by Stayma to the Company relating to Stayma’s failure to pay several past due invoices of approximately $1.7 million.

On April 15, 2019 a federal class action was filed the Oklahoma Police Pension Fund and Retirement System against the Company and certain individual defendants in the U.S. District Court, Southern District of New York. The lawsuit was brought on behalf of persons or entities who purchased or otherwise acquired publicly-traded Teligent, Inc. securities from March 7, 2017 through November 6, 2017. The complaint alleges that defendants made false or misleading statements regarding the Company’s business, operational, and compliance policies in violation of U.S. securities laws. The plaintiff seeks to recover compensable damages. On June 17, 2020, the court, deeming pre-motion letters as a motion to dismiss, granted in part and denied in part the Company’s motion to dismiss.

On July 15, 2020, a derivative complaint was filed by George Gonzalez, purportedly a shareholder of the Company, against certain past and current officers and directors of the Company in the U.S. District Court, Southern District of New York, naming the Company as nominal Defendant. The lawsuit asserts a breach of fiduciary duty claim against the board members and a contribution claim against a former officer for allegedly participating in the alleged misstatements underlying the securities litigation discussed above.

Due to the early stage of these shareholder cases, the Company is unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss. The Company believes these cases are without merit and it intends to vigorously defend against these claims.

On June 18, 2020, the State of New Mexico filed a lawsuit in the 1st Judicial District Court, County of Santa Fe, State of New Mexico against various brand drug manufacturers, generic drug manufacturers, and stores that manufactured, designed, distributed, supplied, marketed, promoted, advertised, and/or sold ranitidine and/or Zantac® to New Mexico residents. The lawsuit alleges that these products contain unsafe levels on N-Nitrosodimethylamine (NDMA), a known carcinogen. It further alleges that Defendants withheld the known dangers of the products from the U.S. Food and Drug Administration (“FDA”) and knew or should have known of various studies demonstrating that Zantac®/ranitidine products contained and/or produced levels of NDMA well above FDA’s daily acceptable limit of 90ng. As to the Company specifically, New Mexico states that the Company maintains an active pharmacy wholesaler license in New Mexico and manufactures injectable prescription Zantac which is sold into New Mexico through its aforementioned license. It asserts that the Company created a public nuisance and was also negligent in its sale of this product. As to the public nuisance claim, New Mexico seeks unspecified funding for a statewide medical monitoring program. As to the negligence claim, New Mexico seeks unspecified monetary damages. Due to the early stage of this case, the Company is unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss, if any. The Company believes this case to be without merit and it intends to vigorously defend against these claims.

On November 12, 2020, the Mayor and City Council of Baltimore filed a lawsuit in the Circuit Court of Maryland for Baltimore City against various brand drug manufacturers, generic drug manufacturers, and stores that manufactured, designed, distributed, supplied, marketed, promoted, advertised, and/or sold ranitidine and/or Zantac® to Baltimore, MD residents. The lawsuit was transferred to MDL No. 2924, In Re Zantac (Ranitidine) Products Liability Litigation in the United States of Florida on February 1, 2021, and Plaintiffs have a pending motion to remand the case back to Maryland. The lawsuit alleges that these products contain unsafe levels on N-Nitrosodimethylamine (NDMA), a known carcinogen. It further alleges that Defendants withheld the known dangers of the products and/or knew or should have known of various studies demonstrating that Zantac®/ranitidine products posed serious health risks. As to the Company specifically, the Mayor and City Council of Baltimore state that the Company maintains an active pharmacy wholesaler license in Maryland and manufactures injectable prescription Zantac which was sold by retailers and supplied by distributors with Baltimore locations during the relevant period. It asserts that the Company created a public nuisance and was also negligent in its sale of this product. As to the common law public nuisance claim, the Mayor and City Council of Baltimore seek unspecified funding for a citywide medical monitoring program. As to the common law negligence claim, the Mayor and City Council of Baltimore seek unspecified monetary damages. Due to the early stage of this case, the Company is unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss, if any. The Company believes this case to be without merit and it intends to vigorously defend against these claims once it is served.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

~~We transferred the listing of our common stock from the NYSE MKT to the NASDAQ Global Select Market.~~ Our common stock ~~ceased~~is ~~trading~~traded on the ~~NYSE MKT under the symbol “IG” at the close of business on October 23, 2015 and began trading on the~~ Nasdaq Global Select Market under the symbol “TLGT~~” on October 26, 2015~~.”

Stockholders

As of ~~March~~April 2530, ~~2020~~2021, there were approximately ~~342~~46 stockholders of record of our 5392,~~899~~817,~~495~~493 outstanding shares of common stock.

Dividends

We have not paid cash dividends to our stockholders since inception and we do not plan to pay cash dividends in the foreseeable future. We currently intend to retain earnings, if any, to finance the growth of the Company.

Equity Compensation Plans

The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.

Unregistered Sales of Securities

None.

Issuer Purchases of Equity Securities

None.

Item 6. SELECTED FINANCIAL DATA

The selected consolidated financial data presented below should be read in conjunction with the Company's consolidated financial statements included in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in Item 7.

	As of and For the Years Ended December 31,
	2019		2018		2017		2016		2015
	2020		2019		2018		2017		2016
(In thousands, except per share data)
Revenues	$	6545,~~896~~309	$	65,~~865~~896	$	6065,~~202~~865	$	6360,~~012~~202	$	3763,~~940~~012
Gross profit	23,523		22,385		27,372		34,687		21,315
Gross (loss)/profit	(3,722)		23,523		22,385		27,372		34,687
Operating (loss) income	(8,020)		(15,099)		(11,797)		2,542		(3,192)
Operating (loss)/income	(139,940)		(8,020)		(15,099)		(11,797)		2,542
Interest and other non-operating income (expense)	~~(21~~14,~~339)~~895		(21,~~219~~339)		(321,~~479~~219)		(143,~~240~~479)		9(14,~~895~~240)
Foreign currency exchange (loss) gain	(1,523)		(3,371)		7,719		(936)		109
Foreign currency exchange gain/(loss)	4,961		(1,523)		(3,371)		7,719		(936)
Loss before income tax expense	(25120,~~033~~084)		(3625,~~318~~033)		(1536,~~276~~318)		(1115,~~698~~276)		6(11,~~703~~698)
Income tax (benefit) provision	91		(62)		(85)		287		35
Income tax expense/(benefit)	1,938		91		(62)		(85)		287
Net (loss) income	(25,124)		(36,256)		(15,191)		(11,985)		6,668
Net loss	(122,022)		(25,124)		(36,256)		(15,191)		(11,985)
Net (loss) income attributable to common stockholders	(25,124)		(36,256)		(15,191)		(11,985)		6,668
Net loss attributable to common stockholders	(122,022)		(25,124)		(36,256)		(15,191)		(11,985)
Weighted average shares outstanding:
Basic	538,~~839~~319		535,~~593~~384		535,~~324~~359		535,~~078~~332		525,~~873~~308
Diluted	538,~~839~~319		535,~~593~~384		535,~~324~~359		535,~~078~~332		675,~~112~~308
PER SHARE:
Net (loss) income:
Net loss:
Basic	(014.4767)		(04.6867)		(06.2877)		(02.2385)		0(2.1326)
Diluted	(014.4767)		(04.6867)		(06.2877)		(02.2385)		(02.0726)
BALANCE SHEET DATA:
Current assets	$	6144,~~644~~291	$	4861,~~386~~644	$	5948,~~131~~386	$	~~101~~59,~~965~~131	$	~~115~~101,~~542~~965
Property, plant and equipment, net	9616,~~349~~131		9196,~~775~~349		6891,~~355~~775		2668,~~215~~355		826,~~706~~215
Total assets	~~206~~87,~~905~~788		~~190~~206,~~892~~905		~~184~~190,~~585~~892		~~181~~184,~~895~~585		~~183~~181,~~503~~895
Current liabilities	1623,~~606~~121		3216,~~612~~606		1832,~~696~~612		1318,~~632~~696		913,~~509~~632
Long-term obligations, less current installments	~~195~~174,~~606~~819		~~139~~195,~~859~~606		~~121~~139,~~136~~859		~~111~~121,~~596~~136		~~107~~111,~~235~~596
Stockholders’ (deficit)/equity	(5110,~~307~~152)		18(5,~~421~~307)		4418,~~753~~421		5644,~~667~~753		6656,~~759~~667
CASH FLOW DATA:
Net cash (used in) provided by operating activities	$	(1816,~~419~~768)	$	(1318,~~275~~419)	$	~~398~~(13,275)	$	~~(447)~~398	$	(~~15,459~~447)
Net cash used in investing activities	(83,~~203~~895)		(258,~~294~~203)		(4025,~~429~~294)		(2040,~~076~~429)		(5320,~~068~~076)
Net cash provided by (used in) financing activities	308,~~449~~952		2530,~~333~~449		~~269~~25,333		~~(10)~~269		(~~3,111~~10)
Net (decrease)/increase in cash, cash equivalents and restricted cash	3(9,~~827~~470)		~~(13~~3,~~236)~~827		(3913,~~762~~236)		(2039,~~533~~762)		(7120,~~638~~533)

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of this Annual Report on Form 10-K contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates and on management’s beliefs and

assumptions. In addition, other written or oral statements, which constitute forward-looking statements, may be made by or on behalf of the Company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance, and involve certain risks, uncertainties and assumptions, which are difficult to predict. See “Item 1A: Risk Factors” above. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Company Overview

Strategic Overview

Teligent, Inc. and its subsidiaries (collectively (the "“Company"”) is a ~~specialty~~ generic pharmaceutical company. ~~Our~~All ~~mission~~references is to ~~become~~"Teligent," ~~a leader in~~ the ~~specialty generic pharmaceutical market. Under our own label~~"Company," "we," ~~currently~~"us," ~~market~~ and ~~sell~~"our" ~~generic~~refer ~~topical~~to ~~and~~Teligent, ~~generic~~Inc. and ~~branded~~its ~~generic~~subsidiaries. Our ~~injectable~~mission ~~pharmaceutical~~is ~~products~~to inbecome ~~the~~a ~~United~~leader ~~States~~in ~~and Canada. In~~ the ~~United~~high-barrier ~~States~~to weentry ~~currently market 38~~ generic ~~topical~~ pharmaceutical ~~products~~market. ~~and~~Our ~~four~~platform ~~branded~~for ~~generic~~growth ~~pharmaceutical~~is ~~products. In~~centered ~~Canada~~around wethe ~~sell~~development, 32manufacturing ~~generic~~ and ~~branded~~marketing ~~generic~~of ~~injectable~~a ~~products~~portfolio ~~and~~of ~~medical~~generic ~~devices. Generic~~ pharmaceutical products ~~are~~under ~~bioequivalent~~our toown ~~their~~label ~~brand~~and ~~name~~private ~~counterparts.~~label Wefor ~~also~~other ~~provide~~pharmaceutical ~~contract~~companies ~~manufacturing~~in ~~services to the pharmaceutical~~topical, ~~over-the-counter~~injectable, ~~("OTC"),~~complex and ~~cosmetic~~other ~~markets. We~~high-barrier ~~operate~~dosage ~~our business under one segment~~forms. ~~Our~~We ~~common~~believe ~~stock~~that isexpanding ~~trading~~our ondevelopment ~~the~~and ~~Nasdaq~~commercial ~~Global~~base ~~Select~~beyond ~~Market~~topical ~~under~~generics, historically the ~~trading~~cornerstone ~~symbol~~of ~~“TLGT.” Our~~our ~~principal executive office~~expertise, ~~laboratories~~to ~~and~~include ~~manufacturing~~injectable ~~facilities~~generics ~~are~~and ~~located~~other athigh-barrier ~~105 Lincoln Avenue~~generics, ~~Buena,~~will ~~New~~leverage ~~Jersey.~~our Weexisting ~~have~~expertise ~~additional~~and ~~offices~~capabilities, ~~located~~and inbroaden ~~Iselin,~~our ~~New~~platform ~~Jersey,~~for ~~Mississauga,~~more ~~Canada,~~diversified ~~and~~strategic ~~Tallinn, Estonia~~growth.

~~Currently~~We currently market and sell generic topical and generic and branded generic injectable pharmaceutical products in the United States and Canada. In the United States, we ~~have~~currently market thirty-seven generic topical pharmaceutical products and two ~~platforms~~branded injectable pharmaceutical products. We have received FDA approvals for ~~growth:~~thirty-six topical generic products from our internally developed pipeline, and we have seven Abbreviated New Drug Applications, ("ANDAs") and three New Drug Application ("NDA") Prior Approval Supplements ("PASs") submitted to the FDA that are awaiting approval. In Canada, we market 25 generic injectable, three generic topical, and three generic ophthalmic products. We have one Abbreviated New Drug Submission (“ANDS”) pending at Health Canada. Generic pharmaceutical products are bioequivalent to their brand name counterparts. In the United States, approved ANDA generic drugs are usually interchangeable with the innovator drug. This means that the generic version may generally be substituted for the branded product by either a physician or pharmacist when dispensing a prescription. We also provide contract development and manufacturing services to the prescription and over-the-counter ("OTC") pharmaceutical and cosmetic markets. We operate our business under one operating segment. Our common stock is traded on the Nasdaq Global Select Market under the trading symbol “TLGT.” Our principal executive office, laboratories and manufacturing facilities are located at 105 Lincoln Avenue, Buena, New Jersey. We have additional offices located in Iselin, New Jersey, and Mississauga, Canada. In late 2020, we decided to reposition the research and development operation mainly performed at our Tallinn, Estonia office to our US manufacturing site at Buena, New Jersey and consequently we are in the process of working to dissolve our Estonia operations.

~~•Developing,~~The manufacturing and ~~marketing~~commercialization ~~a portfolio~~ of generic high-barrier pharmaceutical products ~~under~~is ~~our~~competitive, ~~own~~and orthere aare ~~private~~established ~~label~~manufacturers, suppliers and distributors actively engaged in all phases of our business. We currently manufacture and sell topical, injectable, ~~complex~~ and ophthalmic ~~dosage~~generic ~~forms;~~pharmaceutical products under our own label in both the US and Canada.

~~•Managing~~In ~~our~~the ~~current~~United ~~contract~~States, ~~manufacturing~~the three large wholesale drug distributors are Amerisource Bergen Corporation ("ABC"); Cardinal Health, Inc. ("Cardinal"); and ~~formulation~~McKesson ~~services~~Drug Company, ("McKesson"). ABC, Cardinal and McKesson are key distributors of our products, as well as a broad range of health care products for many other companies. None of these distributors is an end user of our products. Generally, if sales to any one of these distributors were to diminish or cease, we believe that the end users of our products would likely find little difficulty obtaining our products either directly from us or from another distributor. However, the loss of one or more of these distributors, together with a delay or inability to secure an alternative distribution source for end users, could have a material negative impact on our revenue, business, financial condition and results of operations. There are generally three major negotiating entities in the US market. Walgreens Boots Alliance Development (WBAD) consists of Walgreens and Amerisource Bergen's PRxO Generics program. Red Oak Sourcing consists of CVS and Cardinal’s source programs. Finally, ClarusOne consists of Walmart, RiteAid and McKesson’s OneStop program. A loss of any of these major entities could result in a significant reduction in revenue.

We ~~have~~consider ~~been~~our inbusiness ~~the~~relationships ~~contract~~with ~~manufacturing~~ABC, Cardinal and ~~development~~McKesson ofto ~~topical~~be ~~products~~in ~~business~~good ~~since the early 1990s~~standing, ~~but~~and ~~our~~we ~~strategy~~have ~~since~~fee ~~2010~~for ~~has~~services ~~been~~contracts ~~focused~~with oneach ~~the growth~~ of ~~our own generic pharmaceutical business~~them. ~~Since 2010~~However, wea ~~have~~change ~~focused~~in onpurchasing ~~transitioning~~patterns, ~~our~~a ~~business~~decrease ~~to include more customers~~ in ~~the~~inventory ~~topical~~levels, ~~pharmaceutical~~an ~~industry.~~increase Inin ~~2014,~~returns weof ~~broadened~~ our ~~target~~products, ~~product~~delays ~~focus~~in ~~from~~purchasing ~~topical~~products ~~pharmaceuticals~~and todelays ~~include~~in apayment ~~wider~~for ~~specialty~~products ~~pharmaceutical~~by ~~approach.~~one Weor ~~believe~~more ~~that~~of ~~expanding~~these ~~our~~distributors ~~development~~could ~~and~~have ~~commercial~~a ~~base~~material ~~beyond~~negative ~~topical~~impact ~~generics,~~on toour ~~include injectable generics~~revenue, ~~complex generics and ophthalmic generics (what we call our “TICO strategy”)~~business, ~~will~~financial ~~leverage~~condition ~~our existing expertise~~ and ~~capabilities,~~results ~~and~~of ~~broaden~~operations. ~~our~~We ~~platform~~continue ~~for~~to ~~more~~explore ~~diversified strategic growth.~~

Inbusiness ~~2014,~~development weopportunities ~~acquired~~to 23add ~~drug~~additional products ~~that had been previously approved by the United States Food~~ and ~~Drug Administration,~~ /or ~~FDA.~~capabilities Our pipeline includes 18 Abbreviated New Drug Applications ("ANDAs") for additional pharmaceutical products filed with the FDA. We have two abbreviated new drug submissions ("ANDSs") on file with Health Canada. In addition, we have 45 product candidates at various stages of our development pipeline. We expect to ~~continue to expand~~ our ~~presence~~existing inportfolio ~~the generic pharmaceutical market through the filing of additional ANDAs with the FDA, the filing of applications to Health Canada~~ and ~~the subsequent launch of products as these applications are approved. We will also seek~~ to ~~license or acquire further products, intellectual property, or pending applications to~~ expand our ~~portfolio.~~private Onlabel ~~November 13, 2015, we acquired all of the rights, title~~ and ~~interest~~contract inmanufacturing ~~the~~service ~~development, production, marketing, import and distribution of all products of Alveda Pharmaceuticals Inc~~opportunities., or Alveda, pursuant to two asset purchase agreements, one relating to the acquisition of all of the intellectual property-related assets of Alveda and the other relating to the acquisition of all other assets of Alveda.

We ~~also~~have ~~develop,~~two ~~manufacture,~~platforms ~~fill, and package topical semi-solid and liquid products~~ for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis, and eczema. growth:

•Developing, manufacturing and marketing a portfolio of generic pharmaceutical products under our own or a private label in topical, injectable and other high-barrier forms; and

•Managing and expanding our current private label and contract development and manufacturing business.

Since 2010, the primary focus of our strategy has been on the growth of our own generic prescription pharmaceutical business particularly within the generic topical pharmaceutical product market, while moderating our contract development and manufacturing to the prescription and OTC pharmaceutical and cosmetic markets. In 2014, we broadened our primary target product focus from topical pharmaceuticals to include a wider approach focused on high-barrier generic prescription pharmaceutical products and generic and branded generic injectable pharmaceutical products. We believed that expanding our development and commercial base beyond topical generics, historically the cornerstone of our expertise, to include injectable generics and other high-barrier dosage forms would leverage our existing expertise and capabilities, and broaden our platform for diversified strategic growth. While we experienced some success in that regard, during the last year, as we have experienced the unfavorable impacts of the COVID-19 pandemic on our business, we have begun to reexamine all of our expertise and assets in order to reinvigorate and bolster our business. This has resulted in our placing additional emphasis on the development of our private label business as well as our contract development and manufacturing business.

Following five approvals from our internally developed pipeline of topical generic products in 2019, there were no approvals from our internally developed pipeline of topical generic products in 2020. We continue to be opportunistic in efforts to license or acquire further products, intellectual property, or pending applications to expand our portfolio. We expect to accelerate our growth through the creation of unique opportunities based on the acquisition of additional intellectual property and/or the expansion of the use of our existing intellectual property. We are also exploring the options to monetize certain of our non-core assets.

Based on IQVIA (NYSE: IQV) data, the addressable market for the seven ANDA topical filings and three NDAs that we have pending with the FDA is estimated to total over $140 million per annum. We expect to continue to expand our presence in the generic topical and generic injectable pharmaceutical markets through the submission of additional ANDAs to the FDA and the subsequent launch of products if and when these applications are approved by the FDA.

Product and Pipeline Approvals

There were no significant approvals announced in 2020.

The following is a summary of significant approvals announced in 2019:

On January 2, 2019, we announced approval of an ANDA for Gentamicin Sulfate Ointment USP, 0.1%. This was our thirty-second approval from our internally developed pipeline of topical generic pharmaceutical medicines. We launched this product in the first quarter of 2019.

On January 24, 2019, we announced approval of an ANDA for Clobetasol Propionate Ointment USP, 0.05%. This was our first approval for 2019, and our thirty-third approval from our internally developed pipeline of topical generic pharmaceutical medicines. We launched this product in the first quarter of 2019.

On March 14, 2019, we announced approval of an ANDA for Desonide ointment, 0.05%. This was our second approval of 2019, and our thirty-fourth approval from our internally developed pipeline of topical generic pharmaceutical medicines. We launched this product in the second quarter of 2019.

On March 19, 2019, we announced approval of an ANDA for Fluocinonide Topical Solution USP, 0.05%. This was our third approval of 2019, and our thirty-fifth approval from our internally developed pipeline of topical generic pharmaceutical medicines. We launched this product in the early third quarter of 2019.

On April 4, 2019, we announced approval of an ANDA for Fluocinonide Cream USP, 0.1%. This was our fourth approval of 2019, and our thirty-sixth approval from our internally developed pipeline of topical generic pharmaceutical medicines. We expect to launch this product in the second half of 2021.

On October 18, 2019, we announced approval of an ANDA for Gentamicin Sulfate Cream USP, 0.1% (gentamicin base). This was our fifth approval of 2019, and our thirty-seventh approval from our internally developed pipeline of topical generic pharmaceutical medicines. We launched this product in the fourth quarter of 2019.

Results of Operations

Fiscal year ended December 31, ~~2019~~2020 compared to fiscal year ended December 31, ~~2018~~2019

We had a net loss of $25122.10 million, or $014.4767 per share, during the year ended December 31, ~~2019~~2020 ("Current Year") compared to a net loss of $3625.31 million, or $04.6867 per share, during the year ended December 31, ~~2018~~2019 ("Prior Year"). Product Sales, net, include Company Product Sales and Contract Manufacturing Sales, as follows:

Revenues (in thousands):

	Year Ended December 31,				Increase/(Decrease)		~~Increase/(Decrease)~~
Components of Revenue:	~~2019~~2020		~~2018~~2019		$		%
Product sales, net	$	6443,~~291~~604	$	5964,~~591~~291	$	4(20,~~700~~687)	8(32)	%
Contract manufacturing sales	1,~~362~~157		61,~~047~~362		(~~4,685~~205)		(7715)	%
Research and development services and other income	~~243~~548		~~227~~243		16305		7126	%
Total Revenues	$	6545,~~896~~309	$	65,~~865~~896	$	31(20,587)	—(31)	%

Total revenues were $6545.93 million in the Current Year compared to $65.9 million in the Prior Year.

Research and development services and other income will not be consistent and will vary, from period to period, depending on the required timeline of each development project and/or agreement.

Costs and expenses (in thousands):


	Year Ended December 31,				Increase/(Decrease)
	2020		2019		$		%
Cost of revenues	$	49,031	$	42,373	$	6,658	16	%
Selling, general and administrative	27,011		20,785		6,226		30	%
Impairment charges	101,533		—		101,533		100	%
Product development and research	7,674		10,758		(3,084)		(29)	%
Totals costs and expenditures	$	185,249	$	73,916	$	111,333	151	%

	Year Ended December 31,						Increase/(Decrease)
	2019		2018		$		%
Cost of revenues	$	42,373	$	43,480	$	(1,107)	(3)	%
Selling, general and administrative	20,785		23,408		(2,623)		(11)	%
Product development and research	10,758		14,076		(3,318)		(24)	%
Totals costs and expenditures	$	73,916	$	80,964	$	(7,048)	(9)	%

Total costs and expenditures increased 151%, or $111.3 million to $185.2 million in the Current Year from $73.9 million in the Prior Year. Cost of revenues increased as a percentage of total revenue to 108% in the Current Year as compared to 64% in the Prior Year. Cost of revenues increased $6.7 million in the Current Year mainly due to (i) lower sales volume increased absorption expense (ii) additional quality expenses (iii) excess inventory reserve.

~~Total~~Selling, ~~costs~~general and ~~expenditures~~administrative ~~decreased~~expenses ~~9%, or $7.0 million to $73.9 million~~ in the Current Year ~~from~~increased by $816.02 million ~~in the Prior Year. Cost of revenues decreased~~ as ~~a percentage of total revenue to 64% in the Current Year as~~ compared to ~~66% in~~ the Prior Year. ~~Cost~~ ofThe ~~revenues~~increase ~~decreased~~was ~~$1.1~~primarily ~~million in the Current Year mainly~~ due to (i) ~~product~~increased ~~mix~~professional ~~with~~fees ~~lower~~of ~~standard~~$2.0 ~~costs~~million, (ii) ~~favorable~~increased ~~material~~bad ~~revaluations~~debt inexpenses ~~2019~~of $1.2 million, (iii) ~~less~~increased ~~impact~~personnel costs of ~~annual~~$1.4 ~~physical~~million, ~~inventory~~ and (iv) ~~lower~~increased ~~direct~~legal, ~~salaries~~audit fees and ~~related~~all ~~costs~~other ~~inclusive~~ of ~~stock-based~~$2.7 ~~compensation~~million, ~~related~~partially tooffset ~~options~~by ~~and~~(v) ~~restricted~~reduced ~~stock~~ANDA ~~offset~~filing byfees ~~increases~~of to$0.5 ~~indirect~~million, ~~salaries~~(vi) asa ~~the~~write ~~Company~~off ~~increased~~to ~~quality~~clinical ~~staffing~~studies inof ~~2019~~$0.3 million and ~~depreciation~~(vii) ~~due~~reduced totravel ~~the~~expenses ~~opening~~ of ~~portions~~$0.3 ~~of the new facility~~million.

~~Selling,~~Impairment ~~general~~charges ~~and~~of ~~administrative expenses in the Current Year decreased by~~ $2101.65 million aswere ~~compared~~recorded toin the ~~Prior~~Current Year. ~~The~~A ~~changes~~property, ~~primarily~~plant ~~consist~~and ofequipment ~~(i)~~impairment charge of $179.98 million ~~impairment~~was ~~loss~~recorded in the ~~Prior~~Current Year,. An ~~(ii)~~intangible assets impairment charge of $021.7 million ~~decrease~~was recorded in ~~salaries~~the ~~and~~Current ~~related~~Year ~~costs inclusive of stock-based compensation~~ related to ~~options~~product ~~and~~acquisition ~~restricted~~costs ~~stock,~~of ~~(iii)~~ $013.85 million, ~~decrease~~trademark ~~in bad debt expense~~ and ~~(iv)~~technology of $08.41 million ~~decrease~~and inIPR&D ~~other costs partially offset by an increase~~ of $0.61 million. There inwere ~~professional~~no ~~fees~~impairment ~~including~~charges ~~legal~~in ~~fees~~the ~~and~~Prior ~~audit fees and an increase of $0~~Year.~~6 million in lease expense.~~

Product development and research expenses decreased by $3.31 million as compared to the Prior Year. AsThe wedecrease ~~shift focus from our portfolio of topical generic prescription pharmaceutical products to injectable generic pharmaceutical products with the addition of our new facility, we invested less~~ in ~~topical~~product ~~R&D~~development ~~for~~and ~~2019. This~~research expenses was ~~mainly~~primarily due to (i) a $01.47 million decrease in ~~clinical~~personnel ~~studies~~costs, (ii) a $1.10 million decrease in ~~salaries~~outside ~~and related costs inclusive of stock based compensation related to options and restricted stock~~testings, (iii) an $0.8 million decrease in ~~exhibit~~clinical ~~and pilot batch costs~~studies, (iv) ~~$0.8~~a ~~million~~ decrease in GDUFA ~~and~~fees, ~~associated~~ANDA ~~fees~~filings and lab supplies aggregating $1.0 million, partially offset by (v) a $01.24 million ~~decrease~~increase in ~~contract~~write off of material costs associated with research and development activities.

Other (Expense) Income, net (in thousands):

	Year Ended December 31,				(Increase)/Decrease		~~Increase/(Decrease)~~
	2019		2018		$		%
	2020		2019		$		%
Interest and other expense, net	$	(21,154)	$	(12,298)	$	8,856	72	%
Other income	$	3,349	$	—	$	3,349	100	%
Foreign exchange loss	$	(1,523)	$	(3,371)	(1,848)		55	%
Foreign exchange gain/(loss)	$	4,961	$	(1,523)	$	6,484	(426)	%
Loss on debt restructuring	$	(920)	$	—	920		—	%
Debt partial extinguishment of 2019 Notes	—		(185)		185		(100)	%
Debt partial extinguishment of 2019 Notes	$	(185)	$	(4,235)	(4,050)		100	%
Interest and other expense, net	(28,824)		(21,154)		(7,670)		(36)	%
Change in the fair value of derivative liability	$	6,769	$	—	(6,769)		—	%
Gain/(loss) on debt restructuring	51,858		(920)		52,778		(5737)	%
Debt extinguishment of prior term loan	$	—	$	(1,315)	(1,315)		100	%
Inducement loss	(9,183)		—		(9,183)		100	%
Change in the fair value of derivative liabilities	$	(2,305)	$	6,769	(9,074)		(134)	%

~~Interest~~Other ~~and~~income ~~other~~of ~~expense,~~$3.4 ~~net~~million ~~increased~~ in the Current Year ~~primarily~~is asrelated ~~a result of a decrease in capitalized interest of $4.6 million from Prior Year pertaining~~ to the ~~Buena~~forgiveness ~~Facility and an increase in interest expense~~ of ~~$4.3 million related to~~ the ~~current~~PPP ~~debt~~government ~~structure~~grant advance.

Foreign exchange ~~loss~~gain of $1.5.0 million in the Current Year is related to the foreign currency translation of our intercompany loans denominated in U.S. dollars to our foreign subsidiaries to be repaid in November 2022. Depending on the changes in foreign currency exchange rates, we will continue to record a non-cash gain or loss on translation for the remaining term of these loans.

Debt partial extinguishment on the 2019 Notes was $0.2 million in the ~~Current Year compared to $4.2 million in the~~ Prior Year. ~~Debt extinguishment of the Prior Term Loan was zero in the Current Year compared to $1.3 million in the Prior Year.~~

The ~~gain~~net onincrease ~~the change~~ in ~~fair~~interest ~~value~~and ofother ~~derivative~~expense ofin the ~~2023~~Current ~~Series~~Year Bof ~~Notes was~~ $67.87 million inis related to the ~~Current~~increase ~~Year~~in total debt and a higher cost of capital.

50The gain on debt restructuring and inducement loss of $42.7 million in the Current Year is due to the exchange of Series A and Series B Convertible Notes for Series C and Series D Convertible Notes in the amount of $8.2 million as well as the conversion of Series D Convertible Notes in the amount of $34.5 million.

~~Loss~~The change in the fair value of derivatives of $2.3 million included a $2.0 million loss on ~~debt~~the ~~restructuring~~derivative liability pertaining to the Series C Notes and a $0.8 million loss on the Warrants, partially offset by a $0.5 million gain on the 2023 Series B Notes. The change in fair value of derivative liabilities of $6.8 million in the ~~Current~~Prior Year ~~was~~included a $06.98 million loss on the derivative liability pertaining to the Series B Notes.

Net loss attributable to common stockholders (in thousands, except per share numbers):

	Year Ended December 31,				Increase/(Decrease)		~~Increase/(Decrease)~~
	2019		2018		$		%
	2020		2019		$		%
Net loss attributable to common stockholders	$	(25122,~~124~~022)	$	(3625,~~256~~124)	$	~~(11~~96,~~132)~~898	31386	%
Basic and diluted loss per share	$	(014.4767)	$	(04.6867)	$	(010.~~21)~~00	31214	%

Net loss for the Current Year was $25122.10 million as compared to net loss of $3625.31 million for the Prior Year. The ~~decrease~~increase isin ~~primarily~~net loss for the Current Year was due primarily to ~~decrease~~ (i) ina ~~costs~~decrease ~~and~~in ~~expenses~~revenues of $720.06 million, (ii) an increase in ~~foreign~~costs ~~exchange~~and ~~loss~~expenses of $1111.83 million, (iii) ~~debt~~an ~~extinguishment~~increase ~~losses~~in interest expense of $57.47 million, and (iv) the derivative liability increase of $69.81 million, ~~partially~~ offset by an(v) ~~increase~~the ingain ~~interest~~on debt restructuring and ~~other~~inducement ~~expenses~~loss of $843.96 million, ~~and~~(vi) ~~loss~~a on$6.5 ~~debt~~million ~~restructuring~~increase in foreign exchange gain, and (vii) gain of $03.94 million in ~~the~~other ~~Current~~income ~~Year~~from government grant as ~~discussed~~stated above.

Liquidity and Capital Resources

The Company has incurred significant losses and generated negative cash flows from operations in recent years and expects to continue to incur losses and generate negative cash flow for the foreseeable future. As a result, ~~the~~we ~~Company~~ had an accumulated deficit of $~~121~~243.5 million, total principal amount of outstanding borrowings of $~~214~~181.06 million, and limited capital resources to fund ongoing operations at December 31, ~~2019~~2020. These capital resources were comprised of cash and equivalents of $156.57 million at December 31, ~~2019~~2020 and the generation of cash inflows from working capital. WeThe ~~had~~Company ~~working~~is ~~capital~~not ofcurrently ~~$45.0~~generating ~~million~~revenues atfrom ~~December~~operations 31that are sufficient to cover its operating expenses, ~~2019. The~~and ~~Company’s~~its available capital resources ~~may~~are not be sufficient for it to continue to meet its obligations as they become due. ~~over~~As ~~the~~a ~~next~~result, ~~twelve months if we cannot improve our operating results or increase our operating cash inflows. In~~ the ~~event~~Company ~~these~~has ~~capital~~engaged ~~resources~~financial ~~are~~and ~~not~~legal ~~sufficient,~~advisors ~~we may need~~ to ~~raise~~assist ~~additional~~it ~~capital~~in, ~~through~~among ~~the~~other ~~sale of equity or debt securities~~things, ~~enter~~analyzing ~~into~~all available strategic ~~business~~alternatives ~~collaboration~~to ~~agreements~~address ~~with~~its ~~other~~liquidity ~~companies,~~and ~~seek~~capital ~~other funding facilities, or sell assets~~structure. However, the Company cannot provide assurances that additional capital will be available ~~on acceptable terms or at all. Moreover, if the Company is unable to meet its obligations~~ when ~~they~~needed ~~become due over the next twelve months through our available capital resources,~~ or ~~obtain~~that ~~new~~any ~~sources~~strategic ofalternatives ~~capital when needed, the Company may have to delay expenditures, reduce the scope of our manufacturing operations, reduce~~ or ~~eliminate~~restructuring ~~one~~pursued orwill ~~more~~be ofon ~~our~~acceptable ~~development programs, make significant changes to our operating plan, or cease operations~~terms.

~~Our~~The Company’s liquidity needs have typically arisen from the funding of ~~our~~its new manufacturing facility, product manufacturing costs, research and development programs, and the launch of new products. In the past, wethe ~~have~~Company has met these cash requirements through cash inflows from operations, working capital management, and proceeds from borrowings ~~discussed in Note 6~~. Although the construction of ~~our~~the Company’s new manufacturing facility was substantially completed in October of 2018, additional investment was made in order to prepare the facility and ~~our~~the Company’s employees for a prior approval inspection from the FDA for ~~our~~the new injectable line. In ~~addition,~~The weCompany’s ~~expect~~liquidity towas ~~continue~~negatively toimpacted ~~incur~~in ~~significant~~2020 ~~expenditures~~as ~~for~~a ~~the~~result ~~development~~ of ~~new~~the ~~products~~COVID-19 ~~in our pipeline~~pandemic, and the ~~manufacturing,~~Company ~~sales~~believes its liquidity will be negatively impacted during 2021 by disruptions with respect to certain of its products and ~~marketing~~the diversion of ~~our~~resources ~~existing~~to remediate the product~~. While~~ wequality ~~rely~~issues ~~heavily~~identified onin ~~cash~~connection ~~flows~~with ~~from~~the ~~operating~~Company’s ~~activities~~response ~~and~~to ~~borrowings~~the ~~from~~FDA’s ~~outside~~warning ~~sources~~letter. In addition, the Company expects to ~~execute~~continue ~~our~~to ~~operational~~incur ~~strategy,~~significant ~~meet~~expenditures ~~our~~for ~~financial~~the ~~commitments~~development ~~and~~of ~~other~~new ~~short-term~~products ~~financial~~in ~~needs~~its pipeline, weand ~~cannot~~the bemanufacturing, ~~certain~~sales ~~that~~and ~~sufficient~~marketing ~~capital~~of ~~will~~its beexisting ~~generated~~products. ~~through~~As ~~operations~~described orabove, ~~will~~notwithstanding bethe ~~available~~Company’s tosignificant current liquidity needs, the Company tocannot ~~the~~provide ~~extent~~assurances ~~required~~that ~~and~~additional capital will be available on acceptable terms or at all.

The $39.8 5 million ~~increase~~decrease in our cash during the twelve months ended December 31, ~~2019~~2020 was ~~largely~~mainly ~~due~~ to ~~the~~support ~~issuance~~our ofoperational ~~the~~activities, ~~2023~~which ~~Series~~included Bcontinued ~~Notes~~inventory ~~issued~~management/build byto ~~the~~help ~~Company~~avoid infailure-to-supply ~~the~~fees ~~fourth~~and ~~quarter~~normal oftiming ~~2019,~~differences ~~offset by the settlement of the 2019 Notes also~~ in ~~the~~working ~~fourth~~capital ~~quarter of 2019~~balances. In addition, we had an accumulated deficit of $~~121~~243.5 million as of December 31, ~~2019~~2020, ~~and~~inclusive ~~incurred~~of a $25122.1 0 million net loss ~~and used $18.4 million~~ in ~~net~~this ~~cash from operating activities during the twelve months ended December 31, 2019~~year.

OnSeries ~~April~~A ~~27, 2018, we entered into separate exchange agreements with certain holders of the 2019~~ Notes. The agreements gave the holders the right to exchange, in aggregate, $75.1 million of the 2019 Notes for $75.1 million of the 2023 Notes. The 2023 Notes bear a fixed interest rate of 4.75% per year, payable semi-annually with the principal payable in May 2023. At the option of the holders, the 2023 Notes are convertible into shares of our common stock, cash or a combination thereof. The initial conversion rate is $4.45 per share, subject to certain adjustments, related to either our stock price volatility, or the Company's declaration of a stock dividend, stock distribution, share combination or share split expected dividends or other anti-dilutive activities. In addition, holders will be entitled to receive additional shares of common stock for a potential increase of the

51In the beginning of 2019, the Company used a total of $2.7 million of proceeds from the Senior Credit Facilities to repurchase a portion of the remaining 2019 Convertible 3.75% Senior Notes (the “2019 Notes”). The repurchase of the 2019 Notes was considered a debt extinguishment under ASC 470-50. The 2019 Notes were accounted for under cash conversion guidance ASC 470-20, which required the Company to allocate the fair value of the consideration transferred upon settlement to the extinguishment of the liability component and the reacquisition of the equity component upon derecognition. In accordance with the guidance above, the Company allocated a portion of the $2.7 million to the extinguishment of the liability component equal to the fair value of that component immediately before extinguishment and recognized a $0.2 million extinguishment loss in the Condensed Consolidated Statement of Operations to measure the difference between (i) the fair value of the liability component and (ii) the net carrying value amount of the liability component (which was already net of any unamortized debt issuance costs). The reduction of Additional Paid in Capital in connection with this extinguishment was immaterial. The Company settled the remaining 2019 Notes of $13.0 million in principal upon its maturity in December 2019.

~~conversion~~Following ~~rate~~the upissuance toof ~~$280.90~~the ~~per~~Series ~~share~~D ~~under~~Notes adescribed ~~make-whole~~below, ~~provision~~all inamounts ~~some~~owing ~~circumstances.~~with Werespect ~~incurred~~to ~~debt~~the ~~issuance~~Series ~~costs~~A ofNotes ~~$1.6~~were ~~million~~extinguished ~~upon~~through ~~the~~exchange ~~issuance~~ of ~~the~~Series ~~2023~~C Notes. and Series D Notes (see below).

InSeries ~~addition,~~B on May 4, 2018, we filed a Registration Statement on Form S-3 ("the Form S-3") pursuant to the Securities Act of 1933, as amended. The Form S-3 registration allows us to issue, from time to time and at prices to be determined at or prior to the offering, up to $50.0 million of any combination of the securities described in the prospectus, either individually or in units should the need to raise cash arise. We did not timely file our financial statements for the quarter ended September 30, 2018. The third quarter 2018 Form 10-Q was filed on December 12, 2018, after our extended deadline. As a result, our access to offer up to $50.0 million of the identified securities was suspended for twelve months. On December 12, 2019 the Form S-3 registration was once again made available to the Company.Notes

On December 13, 2018, we entered into the Senior Credit Facilities, consisting of the Revolver and Term Loans. The Senior Credit Facilities also included a $15.0 million delayed draw term loan B commitment, which remained undrawn and expired on October 31, 2019~~. As of December 31~~, ~~2019, $25.0 million was drawn under~~ the ~~Revolver~~Company ~~and~~closed ~~$88.5~~its ~~million~~offering of ~~Term~~the ~~Loans~~Series ~~were~~B ~~outstanding~~Notes. The ~~Initial~~Series ~~Term~~B ~~Loan matures on the earlier to occur of (a) prior to maturity of the 2023~~ Notes ~~and~~were ~~(b)~~scheduled ~~June 13, 2024. We extended commitments related~~ to ~~undrawn~~mature amounts of the Delayed Draw Term Loan A from June 30, 2019 to December 13, 2019, pursuant to an amendment we entered with the Second Lien Agent on July 18, 2019. The extended Delayed Draw Term Loan A was subsequently drawn down by us in ~~December~~May 2019. Drawn amounts under the Delayed Draw Term Loans mature at the same time as the Initial Term Loan. The Term Loans mature on the earliest to occur of the June 23, 2024 and the date of that is 181 days prior to the maturity date of each of (x) the 2023 ~~Notes~~ and ~~(y)~~were ~~the~~convertible ~~2023~~at ~~Series B Notes. The Revolver matures on~~ the ~~earliest~~option ~~to occur~~ of the ~~June~~holder ~~23,~~at ~~2024~~any ~~and~~time ~~the date of that is 91 days~~ prior to ~~the~~their maturity ~~date of each of (x) the 2023 Notes and (y) the 2023 Series B Notes~~. ~~Our~~ ~~ability to borrow under the Revolver is subject to a borrowing base determined based upon eligible inventory, eligible equipment, eligible real estate and eligible receivables.~~ The ~~Senior~~initial ~~Credit~~conversion ~~Facilities~~price ~~are~~was ~~secured by the Collateral~~$7.20 ~~All~~per ofshare, ~~our~~subject ~~debt is subordinated~~ to ~~the~~adjustment ~~Senior~~under Credit Facilities. The liens securing the Term Loans are subordinated to the liens securing the Revolver. The Senior Credit Facilities had customary financial and non-financial covenants, including affirmative, negative and reporting covenants, representations and warranties, and events of default, including cross-defaults on other material indebtedness, as well as events of default triggered by a change of control and certain ~~actions initiated by the FDA which were superseded by the amendments noted below~~circumstances. ~~The financial covenants consisted of a minimum revenue test, a minimum adjusted EBITDA test and a maximum total net leverage ratio.~~

InAs ~~December~~part ~~2018 the Company used $52.8 million~~ of ~~proceeds from~~ the ~~Senior~~offering, ~~Credit Facilities to repurchase~~ the ~~2019~~Company ~~Notes~~entered asinto ~~well~~agreements aswith ~~$0.3~~certain ~~million~~holders of ~~proceeds~~its toexisting ~~pay~~Series ~~for~~A ~~transaction costs. The repurchase of the 2019~~ Notes ~~for is considered a debt extinguishment under ASC 470-50. The 2019 Notes are accounted for under cash conversion guidance ASC 470-20, which requires us~~ to ~~allocate~~exchange the fair value of the consideration transferred upon settlement to the extinguishment of the liability component and the reacquisition of the equity component upon derecognition. We allocated the total amount of unamortized debt issuance costs incurred to the liability and equity components using the same proportions as the consideration transferred to extinguish the 2019 Notes. In accordance with the guidance above, we recorded $19.70 million ~~as an extinguishment loss related to the repurchase~~ of the ~~2019~~Series A Notes infor ~~the Consolidated Statement of Operations. In addition, we recorded a~~ $25.91 million ~~reduction~~ of ~~Additional Paid in Capital in connection with~~ the ~~extinguishment~~Series ofB ~~the 2019~~ Notes.

InThe ~~the~~gross ~~beginning~~cash ofproceeds ~~2019, the Company used a total~~ of approximately $229.73 million ofon ~~proceeds~~ from the ~~Senior~~financing ~~Credit~~were ~~Facilities~~used to ~~repurchase~~extinguish ~~a portion of~~ the ~~remaining~~Company’s ~~2019~~existing ~~Notes. The repurchase of the~~ 2019 Notes isin ~~considered~~December ~~a debt extinguishment under ASC 470-50. The~~ 2019 ~~Notes~~and ~~are~~intended ~~accounted~~to ~~for~~pay ~~under~~amounts ~~cash~~owing ~~conversion~~with ~~guidance~~respect ~~ASC~~to ~~470-20,~~other ~~which~~indebtedness ~~requires~~and ~~the Company~~ to ~~allocate~~fund ~~the~~general ~~fair~~corporate ~~value~~and ofworking ~~the~~capital ~~consideration~~requirements. ~~transferred~~The ~~upon~~net ~~settlement~~proceeds tofrom the ~~extinguishment~~financing ofwere ~~the~~$26.9 ~~liability~~million ~~component~~after ~~and~~deducting ~~the~~a ~~reacquisition~~total of ~~the equity component upon derecognition~~$2. In3 ~~accordance~~million ~~with~~of the ~~guidance~~initial ~~above,~~purchasers’ ~~the~~discounts ~~Company~~and ~~allocated~~professional afees ~~portion~~associated ofwith the $2transaction.7 ~~million~~The toSeries ~~the~~B ~~extinguishment~~Notes ofbore ~~the~~interest ~~liability~~at ~~component~~a ~~equal~~rate ~~to the fair value~~ of ~~that~~7.00% ~~component~~per ~~immediately~~annum ~~before~~if ~~extinguishment~~paid ~~and~~in ~~recognized~~cash, asemiannually ~~$0.2~~in ~~million~~arrears ~~extinguishment~~on ~~loss~~May in1 ~~the~~and ~~Consolidated~~November ~~Statement~~1 of ~~Operations~~each toyear, ~~measure~~beginning ~~the~~on ~~difference~~May ~~between~~1, ~~(i)~~2020. ~~the~~The ~~fair~~Company ~~value~~also ofhad ~~the~~an ~~liability~~option, ~~component~~ and ~~(ii)~~agreed ~~the~~with ~~net~~its ~~carrying~~senior ~~value~~lender, ~~amount~~to ofPIK the ~~liability~~interest ~~component~~at ~~(which~~8.00% isper ~~already~~annum, ~~net~~to ofdefer ~~any~~cash ~~unamortized debt issuance costs)~~payments. The ~~reduction~~Company ofelected ~~Additional~~the ~~Paid~~ paid-in-kind ~~Capital~~interest inoption ~~connection~~and ~~with~~increased ~~this~~the ~~extinguishment~~principal ~~was~~balance ~~immaterial.~~of ~~The Company settled~~ the ~~remaining~~Series ~~2019~~B Notes ofby $132.0 million infor ~~principal~~the ~~upon~~year ~~its~~ended ~~maturity in~~ December 31, ~~2019~~2020.

~~The~~Following ~~Initial Term Loan of $50.0 million and $15.0 million of~~ the ~~Revolver~~issuance ~~were drawn by the Company on December 13, 2018. On December 21, 2018, the Company drew $20.0 million~~ of the ~~Delayed~~Series ~~Draw~~D ~~Term~~Notes ~~Loan~~described ~~A. In January 2019~~below, ~~the~~all ~~Company~~outstanding ~~drew~~debt ~~$5.0~~with ~~million~~respect ~~and subsequently the remaining $5.0 million under the Revolver were drawn down by the Company in April 2019. On September 18, 2019, pursuant~~ to the ~~Protective~~Series ~~Advance~~B ~~clause~~Notes inhad ~~the~~been ~~Company’s~~extinguished ~~First~~through ~~Lien~~exchange ~~Credit Agreement with Ares Capital, the Company borrowed an incremental $2.5 million from its existing revolving credit facility. Consistent with the terms~~ of ~~the~~Series ~~revolving~~C ~~credit facility, Protective Advances are secured by the Administrative Agent’s liens, constitute Obligations pursuant to the First Lien Credit Agreement,~~ and ~~bear~~Series ~~interest~~D atNotes ~~the~~(see ~~rate applicable to the outstanding revolving credit facility balances, however, the Protective Advance is repayable on demand~~below). ~~The liability was subsequently paid off in November 2019 along with repayment fee of $0.1 million. The Company drew down the remaining $10 million under its~~

52Series C Notes

~~borrowing~~On ~~capacity~~July of20, ~~Delayed~~2020, ~~Draw~~the ~~Term~~Company ~~Loan~~completed Athe ~~before~~sale ~~its~~and ~~expiry~~issuance inof ~~December~~$13.8 million aggregate principal amount of ~~2019~~Series C Notes.~~The~~ ~~$15~~After ~~million~~taking ~~Delayed~~into ~~Draw~~account ~~Term~~an ~~Loan~~original Bissue ~~expired~~discount ~~upon~~and ~~the~~other ~~issuance~~fees ofpayable to the ~~Series~~Purchasers, Bthe ~~Notes,~~Company ~~prior~~received tonet cash proceeds of approximately $10.0 million, which the Company ~~drawing~~is ~~down~~using ~~any~~for ~~monies.~~general corporate purposes.

The ~~Term~~Company ~~Loans~~also ~~are~~issued ~~governed~~approximately by$32.3 ~~the~~million ~~Second~~in ~~Lien~~aggregate ~~Credit~~principal ~~Agreement.~~amount ~~The~~of ~~2023~~Series ~~Term~~C ~~Loans~~Notes ~~include~~in aexchange ~~24-month~~for ~~paid-~~approximately $35.9 million in~~-kind~~ ~~interest~~aggregate ~~option~~principal ~~available~~amount, toplus accrued but unpaid interest thereon, of the Company’s ~~should~~outstanding itSeries ~~choose~~B toNotes, ~~defer~~giving ~~cash~~effect ~~payments~~to ina ~~order~~10% todiscount ~~maintain~~on the ~~liquidity~~principal ~~needed~~amount toof ~~continue~~the ~~launching~~Series ~~new~~B ~~products~~Notes exchanged. In addition, ~~and~~the ~~preparing~~Company ~~for~~issued anapproximately ~~FDA~~$3.7 ~~prior~~million ~~approval~~in ~~inspection~~aggregate principal amount of ~~its~~Series ~~new~~C ~~injectable~~Notes ~~manufacturing~~in ~~facility~~exchange for approximately $8.2 ~~The~~million ~~Company~~in ~~has~~aggregate ~~elected~~principal ~~the~~amount, ~~paid-in-kind~~plus ~~interest~~accrued ~~option~~but ~~and~~unpaid ~~increased~~interest thereon, of the ~~principal~~Company’s ~~balance~~outstanding ofSeries ~~2023~~A ~~Term~~Notes, ~~Loans~~giving ~~by$8.5 million~~effect ~~for~~to a 55% discount on the ~~year~~principal ~~ended~~amount ~~December~~of ~~31,~~the ~~2019~~Series A Notes exchanged.

OnInterest ~~October~~on ~~31,~~the ~~2019,~~Series C Notes accrues at the ~~Company~~rate ~~closed~~of ~~its~~9.5% ~~Series~~per Bannum ~~Notes~~and ~~offering~~is payable in ~~the~~kind ~~aggregate~~and capitalized with principal ~~amount~~semiannually in arrears on March 1 and September 1 of ~~$34.4~~each ~~million~~year, beginning on September 1, 2020. The Series BC Notes will mature inon ~~May~~March 30, 2023, unless earlier converted or repurchased and are ~~convertible~~subordinate atto the ~~option~~indebtedness ofunder the ~~holder~~Senior atCredit ~~any~~Facilities. ~~time~~The ~~prior~~Company tohas ~~maturity~~elected atthe anpaid-in-kind ~~initial~~interest ~~conversion~~option ~~price~~and increased the principal balance of the Series C Notes by $0.725 ~~per~~million ~~share~~in the year ended December 31, ~~subject~~2020. The Company has agreed to ~~adjustment~~use its commercially reasonable best efforts to obtain the approval of its stockholders that is required under ~~certain~~applicable ~~circumstances.~~Nasdaq ~~The~~rules and regulations to permit holders of the Series BC Notes ~~and~~to ~~any~~beneficially own shares of common stock ~~issuable~~without ~~upon~~being ~~conversion~~subject ofto the ~~Series~~Nasdaq BChange ~~Notes~~of (Control Cap. In the ~~“Conversion~~event ~~Shares”)~~that ~~have~~the Company did not ~~been~~obtain ~~registered~~such ~~under~~stockholder ~~the~~approval ~~Securities~~at ~~Act~~an annual or special meeting of ~~1933,~~its asstockholders ~~amended~~on ~~(the~~or ~~“Securities~~before ~~Act”)~~October 31, or2020, ~~any~~holders ~~state~~of ora ~~other~~majority ~~jurisdiction’s~~in ~~securities~~aggregate ~~laws,~~principal ~~and~~amount of outstanding Series C Secured Convertible Notes may elect to increase the ~~New~~interest rate payable on the 2023 Series C Secured Convertible Notes ~~and~~to ~~the~~18.0% ~~Conversion~~per ~~Shares~~annum ~~may~~until ~~not~~such stockholder approval is obtained, which will continue to be ~~offered~~paid orin ~~sold~~kind in the ~~United~~form ~~States~~of ~~absent~~additional ~~registration~~principal orwith anrespect to any applicable ~~exemption~~period ~~from~~in which the ~~registration~~increased ~~requirements~~interest rate remains in effect. Pursuant to a notice dated November 2, 2020, the holders of a majority in principal amount of the ~~Securities~~outstanding ~~Act~~2023 ~~and~~Series ~~applicable~~C ~~state~~Secured orConvertible ~~other~~Notes ~~jurisdictions’~~elected ~~securities~~to ~~laws~~increase the interest rate payable on the 2023 Series C Secured Convertible Notes from 9.5% to 18.0%. The Company ~~does~~convened ~~not~~and ~~intend~~adjourned toa ~~file~~special meeting of stockholders on October 22, 2020, and further adjourned such special meeting on November 11, 2020 and November 25, 2020 due to a ~~registration~~lack ~~statement~~of ~~for~~quorum. The special meeting of stockholders was held on December 16, 2020, pursuant to which the ~~resale~~stockholders of the Company approved the holders of the 2023 Series BC Secured Convertible Notes orbeneficially ~~any~~owning ~~Conversion~~shares ~~Shares~~of common stock without being subject to the Nasdaq Change of Control Cap. As a result of the approval, the interest rate payable on the 2023 Series C Secured Convertible Notes was decreased to 9.5%.

~~As part of the offering, the Company entered into agreements with certain holders of its existing 2023 Notes to exchange $9.0 million of the 2023~~ Series AD ~~Unsecured Convertible~~ Notes for $5.1 million of the Series B Senior Unsecured Convertible Notes. The gross cash proceeds of approximately $29.3 million from the financing were used to extinguish the Company’s existing 2019 Notes in December 2019 and intended to pay amounts owing with respect to other indebtedness and to fund general corporate and working capital requirements. The Series B Notes bear interest at a rate of 7.00% per annum if paid in cash, semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The Company also has an option, and has agreed with its senior lender, to PIK the interest at 8.00% per annum, to defer cash payments. The net proceeds from the financing were $26.9 million after deducting a total of $2.3 million of the initial purchasers’ discounts and professional fees associated with the transaction.

~~Under~~On ~~ASC~~September ~~470-60~~22, ~~Troubled~~2020, ~~Debt~~the ~~Restructurings~~Company bycompleted ~~Debtors,~~ the ~~exchange~~issuance of ~~the~~approximately $927.05 million ofaggregate ~~the~~principal amount of Series AD ~~2023~~Notes ~~notes~~in exchange for ~~the~~approximately $559.10 million ofin ~~the~~aggregate ~~Series~~principal Bamount, ~~Notes~~plus ~~represents~~accrued abut ~~troubled~~unpaid ~~debt~~interest, ~~restructuring~~of ~~("TDR").~~Series ~~The~~A ~~TDR~~Notes, ~~did~~giving ~~not~~effect ~~result~~to in a ~~gain recognition~~53.4% Asdiscount aon ~~result,~~the aprincipal ~~new~~amount ~~effective~~of ~~interest~~the ~~rate~~Series ~~was~~A ~~established~~Notes ~~based on the $7~~exchanged.2 ~~million~~The ~~carrying~~Company ~~value~~also ofissued ~~the~~approximately ~~original debt, net of the~~ $2.0.4 million ~~fair~~aggregate ~~value~~principal amount of the ~~embedded~~Series ~~derivative~~D ~~liability~~Notes ~~related to the new debt issued~~ in ~~the~~exchange ~~TDR~~for ~~and~~approximately $0.25 million ~~issuance~~in ~~costs~~aggregate principal amount, ~~getting~~plus ~~accreted~~accrued tobut ~~$6.8~~unpaid ~~million~~interest, ~~representing~~of the ~~total~~Company’s ~~amount~~outstanding ofSeries ~~the~~B ~~future~~Notes, ~~undiscounted~~giving ~~cash~~effect ~~flows~~to ~~related~~a to31.9% discount on the ~~$5.1~~principal ~~million~~amount of the Series B Notes exchanged.

InFollowing ~~accordance with ASC 815-15, Derivatives and hedging, Embedded Derivatives,~~ the embedded conversion option should be bifurcated and separately accounted for as a derivative instrument, because the Company did not have enough authorized shares available to share-settle the conversion option. Such derivative instruments should be initially and subsequently measured at fair value, with changes in fair value recognized in earnings (see Note 7). The derivative liability recorded at the issuance ~~date was $13.5 million, including the $2.0 million above accounted for in the TDR, which was subsequently remeasured to $6.8 million as~~ of ~~December 31, 2019, with $6.8 million recognized as a gain on change in fair value of derivative in~~ the ~~Company's~~Series ~~statement~~D ~~of operations. Further~~Notes, ~~the~~all ~~$0.9~~amounts ~~million~~owing ~~of allocated issuance costs associated~~ with ~~the~~respect ~~bifurcated~~to ~~conversion features embedded in~~ the notes was recognized as a loss on debt restructuring in the Company’s statement of operations for the year ended December 31, 2019. In accordance with ASC 470-20, the initial carrying amount of the liability component of the Series BA Notes, ~~excluding the $5.1 million portion above is accounted for as a TDR, upon issuance is the residual amount between total proceeds from the transaction~~ and the derivative liability net of allocated issuance costs. The $1.4 million debt issuance costs attributable to the liability component were recorded as a direct deduction from the liability component of the Series B Notes ~~and~~had ~~are~~been ~~being~~paid ~~amortized~~and ~~to interest expense using~~ the ~~effective~~related ~~interest~~indentures ~~method~~and ~~through~~ the ~~maturity~~Company’s ~~date. The~~obligations ~~discount~~thereunder ~~from~~were ~~the~~satisfied par amount of the Notes will be accreted to par utilizing the effective-interest rate method over the term of the Notes from the issuance date through May 2023. The effective interest rate of the 2023 Notes, inclusive of the debt discount and ~~issuance costs is 27~~discharged.~~4%.~~

OnSenior ~~April~~Credit 6, 2020, the Company entered (i) Amendment No. 2 of the Revolver and Amendment No. 4 of the Term Loans, effective as of December 31, 2019. The amendments collectively among other things, (i) increase the interest rates, (ii) reset certain prepayment premiums and modify the terms of certain mandatory prepayments and (iii) modify certain financial covenant levels inclusive of the disposition of prior covenants as of and for the period ended December 31, 2019. These financial covenants include a trailing twelve months (“TTM”) Minimum Revenue covenant that is required to be met each quarterly period from March 31, 2020 through December 31, 2020, a TTM Minimum Adjusted EBITDA that is required to be met each quarterly period from March 31, 2021 through maturity, and a minimum liquidity covenant tested at all times through the term of the agreement. These amendments supersede the financial covenants included in the original and amended Facilities

53On November 12, 2018, the Company secured a credit agreement for $120.0 million. The facility includes three tranches of funding, an asset based revolving credit facility of $25.0 million due November 2022 (“Revolver”), a term loan of $80.0 million due February 2023 (“2023 Term Loan”), and a delayed draw term loan of $15.0 million also due in February 2023 (“2023 Delayed Draw Term Loan”). The interest rate under the Revolver was calculated, at the option of the Company, at either the one, two, three or six-month LIBOR plus 3.75% or the base rate plus 2.75%. The interest rate on the 2023 Term Loan and the 2023 Delayed Draw Term Loan bore interest, at the option of the Company, at either the one, two, three or six-month LIBOR plus 8.75% or the base rate plus 7.75%, with a 24-month paid-in-kind interest option available to the Company should it choose to defer cash payments in order to maintain the liquidity needed to continue launching new products, build inventory, and prepare for the FDA prior approval inspection.

~~agreements.~~The ~~Pursuant~~Initial toTerm ~~the~~Loan ~~amended~~of ~~Ares~~$50.0 ~~Credit~~million ~~Agreements,~~and in$15.0 million of the ~~event~~Revolver were drawn by the Company ison ~~unable~~December to13, ~~comply~~2018. ~~with~~On ~~these~~December ~~covenants~~21, or2018, ~~obtain~~the aCompany ~~waiver~~drew ~~from~~$20.0 ~~its~~million ~~lenders,~~of the ~~lender~~Delayed ~~shall~~Draw ~~have~~Term ~~the~~Loan ~~right~~A. In January 2019, ~~but~~the ~~not~~Company drew $5.0 million and subsequently the ~~obligation,~~remaining to$5.0 ~~permanently~~million ~~reduce~~under the ~~commitment~~Revolver inwere ~~whole~~drawn ordown by the Company in ~~part~~April or2019. toOn ~~declare~~September ~~all~~18, or2019, ~~any~~pursuant ~~portion~~to terms of the ~~outstanding~~First ~~balance~~Lien ~~due~~Credit ~~and payable. Furthermore~~Agreement, in the ~~event~~Company ~~that~~borrowed ~~outstanding~~an ~~balances~~advance ~~under~~in the ~~Ares~~aggregate ~~Credit~~principal ~~agreements~~amount ~~are~~of ~~declared~~$2.5 ~~due~~million ~~and~~(the ~~payable~~"Protective byAdvance"). ~~the~~The ~~lender,~~Protective ~~the~~Advance ~~lenders~~is ofa secured Obligation under the ~~2023~~First ~~Series~~Lien ACredit Agreement and ~~Series~~bears Binterest ~~Unsecured~~at ~~Convertible~~the ~~Notes~~rate ~~shall~~applicable ~~have~~to the ~~right,~~Revolver. ~~but~~The ~~not~~Protective ~~the~~Advance ~~obligation,~~was tosubsequently ~~declare~~repaid ~~all~~in ofNovember ~~the~~2019 ~~outstanding~~along ~~balance~~with ~~due~~a ~~and~~repayment ~~payable~~fee asof ~~well~~$0.1 million. The Company ~~does~~drew ~~not~~down ~~currently~~the ~~have~~remaining ~~available~~$10.0 ~~liquidity~~million tounder ~~repay~~its ~~these~~borrowing ~~outstanding~~capacity ~~borrowings~~of inDelayed ~~the~~Draw ~~event~~Term ofLoan aA ~~default.~~before Ifits ~~the~~expiry ~~Company~~in isDecember ~~unable~~of to2019. ~~raise~~The ~~additional~~$15.0 ~~capital~~million toDelayed ~~meet~~Draw ~~these~~Term ~~obligations,~~Loan ~~the~~B ~~Company~~expired ~~may~~upon ~~have~~the toissuance ~~seek~~of ~~other~~the ~~strategic~~Series ~~alternatives~~B Notes, ~~including~~prior ~~ceasing~~to ~~its~~the ~~operations~~Company drawing down any monies.

InThe ~~June~~Term ~~2019,~~Loans ~~the~~are ~~Company~~governed ~~received~~by ~~a de-listing notice from~~ the ~~NASDAQ~~Second ~~due~~Lien toCredit ~~its share price being below $1~~Agreement.00 ~~for 30 consecutive trading days.~~ The ~~notice~~Term ~~specified~~Loans ~~that~~include ~~the~~a ~~Company's~~24-month ~~share price must trade above $1.00 per share for ten consecutive trading days prior to December 2, 2019~~ paid-in ~~order to prevent its common stock from being de~~-~~listed. For~~kind ~~the~~interest ~~180~~option ~~days~~available ~~preceding~~to ~~December 2, 2019~~ the Company's ~~share~~should ~~price~~it ~~remained~~choose ~~below $1.00. The Company requested a second 180-day extension. NASDAQ denied its request and the Company chose~~ to ~~file~~defer ~~for~~cash anpayments appeal. The Company was granted a hearing date for the end of January 2020. Subsequent to the appeal hearing, NASDAQ set a deadline of April 17, 2020 for the Company to regain compliance with NASDAQ’s continuing listing requirements. In early March 2020 the COVID-19 global pandemic triggered a significant decline in ~~global~~order ~~capital markets, including NASDAQ. In light of this significant decline, the Company requested NASDAQ~~ to ~~reconsider~~maintain the ~~April~~liquidity ~~17,~~needed ~~2020 deadline. NASDAQ agreed~~ to ~~the~~continue ~~Company’s~~launching ~~request and set a~~ new ~~deadline to regain compliance by June 1~~products, ~~2020. In January 2020, the Company’s Board of Directors~~ and ~~shareholders~~preparing ~~approved~~for aan ~~reverse~~FDA ~~stock~~prior ~~split~~approval ininspection ~~the range~~ of ~~any whole number between five (5) and ten (10) to one (1). While the Company believes that the reverse stock split will ultimately increase~~ its ~~share~~new ~~price~~injectable ~~above~~manufacturing $1facility.00 ~~for~~The the required ten consecutive trading days, it can provide no assurances that its shares will trade above $1.00 per share for the required time period. A de-listing from the NASDAQ would be a “Fundamental Change” under the Company’s ~~2023~~has ~~Series~~elected ~~A and Series B Unsecured Convertible Notes which triggers a right by~~ the holders to require the Company repurchase the Convertible Notes. In such an event, the Company would need to seek financing to repurchase the Convertible Notes and there is no guarantee that such financing would be available or on terms acceptable to the Company. If noteholders demanded a repurchase of the notes and the Company could not finance the repurchase, it would be paid-in-kind ~~default~~interest ~~under~~option ~~the Indentures governing the Convertible Notes,~~ and inincreased ~~that event~~ the ~~lenders~~principal ofbalance ~~the Ares Credit agreements would have the right, but not the obligation, to declare all~~ of ~~the~~Term ~~outstanding~~Loans ~~balance~~by ~~under~~$14.4 ~~those~~million ~~agreements due~~ and ~~payable as well~~$22.9 ~~Therefore,~~million infor the ~~event~~twelve ofmonths ~~the Company’s shares are de-listed from the NASDAQ, the Company would likely have to seek some combination of waivers from its lenders~~ and ~~noteholders~~since ~~and~~inception ~~seek new capital~~ through the ~~sale~~period ofended ~~equity or debt securities. If the Company is unable to obtain such waivers or raise new capital to meet these obligations if they become due~~December 31, it2020 ~~may have to seek other strategic alternatives, including ceasing operations~~respectively.

On April 6, 2020, the Company entered (i) Amendment No. 2 of the Revolver and Amendment No. 4 of the Term Loans (the "Amendment 4"), effective as of December 31, 2019 (together, the “April 2020 Amendments”). The ~~negative~~April 2020 Amendments together, among other things, (i) increase the interest rates, (ii) reset certain prepayment premiums and modify the terms of certain mandatory prepayments and (iii) modify certain financial ~~conditions~~covenant ~~described~~levels ~~above~~inclusive ~~raise~~of ~~substantial~~the ~~doubt~~disposition ~~about~~of ~~our~~prior ~~ability~~covenants as of and for the period ended December 31, 2019. The additions and changes to ~~continue~~financial ascovenants set forth in the April 2020 Amendments: (i) add a ~~going~~new ~~concern~~minimum asnet revenue covenant that is tested on the last day of each fiscal quarter from March 31, 2020 until the quarter ending December 31, ~~2019~~2020, (ii) reset a minimum consolidated adjusted EBITDA covenant that is tested on the last day of each fiscal quarter ending during the period from March 31, 2021 to maturity, (iii) eliminate a total net leverage covenant and (iv) add a minimum liquidity covenant tested at all times during the term of the Senior Credit Facilities.

The associated increases in interest rates were effective as of April 6, 2020. The Revolver bears interest at a fluctuating rate of interest equal to the one, two, three or six-month LIBOR plus a margin of 5.5% or a rate based on the prime rate plus a margin of 4.5%, with a LIBOR floor of 1.5%. The Term Loans bear interest at a fluctuating rate of interest equal to the one, two, three or six-month LIBOR plus a margin of 13.0% or a rate based on the prime rate plus a margin of 12.0%, with a LIBOR floor of 1.5%. Interest on the Senior Credit Facilities is payable in cash quarterly in arrears (or more frequently in connection with customary LIBOR interest provisions), provided, that the Company may elect (and has covenanted to the lenders under its Senior Credit Facilities and subsequent amendments thereto) to pay interest on the Term Loans in kind through December 13, 2021 but only if the following occurs: (1) the Company receives a “warning letter close-out letter” from the Federal Drug Administration in response to corrective actions taken by the Company since receipt of the warning letter in November 2019 and (2) the Company receives a written recommendation from the Federal Drug Administration setting forth its approval decision in respect of the pre-approval inspection for commercial production on the newly installed injectable line at the Company’s New Jersey facility. If only one of those items occurs by December 13, 2020, then the Company may still elect to pay interest in kind during 2021, but only from the time the second condition has been satisfied until December 13, 2021. Thereafter, a portion of interest on the loans accruing at a rate of 4.25% per annum may continue to be paid in kind.

Both April 2020 Amendments provide that in the event of receipt of net proceeds from a disposition triggering a mandatory prepayment, net proceeds of such disposition will be applied as follows: (i) first, to be retained by the Company or applied to

amounts outstanding under the First Lien Credit Agreement until such time as liquidity of the Company and its subsidiaries equals $10.0 million, (ii) next to amounts outstanding under the Revolver (without a permanent reduction in the revolving loan commitments of the lenders) until such amounts are paid in full (with the first lien administrative agent having the right to waive such prepayment, in which event, such net proceeds are applied to amounts outstanding under the Second Lien Credit Agreement), and (iii) finally, to amounts outstanding under the Term Loans. In addition, pursuant to the Revolver, the Company has agreed at all times to maintain book cash of the Company and its subsidiaries not in excess of $10.0 million with any excess being required to prepay the outstanding obligations under the Revolver.

After giving effect to the April Amendments, the effective interest rates, inclusive of the debt discounts and issuance costs for the Initial Term Loan and Delayed Draw Term Loan A were between 16.6% and 17.7% and for the various borrowing tranches of the Revolver, were between 9.6% and 10.9%.

In connection with the Term Loan Amendments dated April 6, 2020, the Company issued to the Term Loan lenders certain Warrants to purchase up to, in the aggregate, 538,995 of post reverse stock split shares of the Company’s common stock at an exercise price of $0.01 per share. The Warrants initially were recorded at fair value upon issuance and classified as a liability as the Company did not have sufficient authorized unissued shares for the Warrants’ exercise. The Warrants were remeasured to fair value up to the reverse stock split date, with any fair value adjustments recognized in the condensed consolidated statements of operations. The Warrants were reclassified as equity at their fair value upon the reverse stock split date and will not be remeasured subsequently. The estimated fair value of the Warrants on the date of issuance of $1.4 million was recorded as a debt discount. The Warrants had a fair value of $2.2 million as of the reverse stock split date which was reclassified to equity. The Warrants are exercisable at any time after the reverse stock split which occurred on May 28, 2020 and will remain exercisable, in whole or in part, for a period of 5 years from the issuance date. As of December 31, 2020, all 538,995 Warrants remain outstanding (Note 9).

The number of shares issuable upon the exercise of the Warrants is subject to customary adjustments upon the occurrence of certain events, including (i) payment of a dividend or distribution to holders of shares of the Company’s common stock payable in shares of the Company’s common stock, (ii) a subdivision, capital reorganization or reclassification of the Company’s common stock or (iii) a merger, sale or other change of control transaction.

On July 20, 2020, the Company entered into (i) a Consent and Amendment No. 3 to First Lien Revolving Credit Agreement (the “First Lien Amendment”), and (ii) a Consent and Amendment No. 5 to Second Lien Credit Agreement (the “Second Lien Amendment”). The First Lien Amendment amended the First Lien Credit Agreement to, among other things, (i) permit the issuance of the Series C Notes and the other transactions contemplated by the indenture related thereto, (ii) modify the terms of certain mandatory prepayments, (iii) modify certain negative covenants and (iv) modify certain financial covenants. The July 2020 Second Lien Amendment amended the Second Lien Credit Agreement to, among other things, (i) permit the issuance of the Series C Notes and the other transactions contemplated by the indenture related thereto, (ii) modify the terms of certain mandatory prepayments, (iii) modify certain negative covenants, (iv) modify certain financial covenants and (v) extend the time period in which the Company may elect to pay interest in kind.

In connection with the transactions contemplated by the July 2020 Second Lien Amendment, the Company issued to the lenders party to the Second Lien Credit Agreement certain Warrants to purchase shares of the Company’s common stock. The Warrants are exercisable for up to, in the aggregate, 134,667 shares of the Company’s common stock at an exercise price of $0.01 per share of common stock. The Warrants are immediately exercisable upon issuance and will remain exercisable, in whole or in part, for a period of five years from the original issuance date. The number of shares issuable upon the exercise of the Warrants is subject to customary adjustments upon the occurrence of certain events, including (i) payment of a dividend or distribution to holders of shares of the Company’s common stock payable in shares of the Company’s common stock, (ii) a subdivision, capital reorganization or reclassification of the Company’s common stock or (iii) a merger, sale or other change of control transaction. As of December 31, 2020, all 134,667 Warrants remain outstanding.

The Company was in compliance with its financial covenants as of December 31, 2020. However, the Company is at risk of failing the trailing twelve month Adjusted EBITDA covenant for the first quarter of 2022. If the Company fails to comply with its trailing twelve months revenue covenant, events of default under the First Lien Credit Agreement and the Second Lien Credit Agreement would be triggered and its obligations under the Senior Credit Facilities or other agreements (including as a result of cross-default provisions of the indentures relating to the Series C Notes and Series D Notes) may be accelerated. As such, the Company recorded a $5.6 million derivative liability associated with certain mandatory prepayment penalties and the recognition of future interest payments in the anticipation of a potential future default on its Senior Credit Facilities. The Company reversed the event of default liability of in the third quarter of 2020 based on the Series C Notes offering which terminates the previous revenue covenant under the Senior Credit Facilities, according to which the Company recognized a $5.6

million gain in change in the fair value of the derivative liability line on the Condensed Consolidated Statement of Operations for twelve months ended December 31, 2020 (Note 7).

Government Grant Advance

On May 15, 2020, the Company received $3.4 million of proceeds from the U.S. Small Business Administration (the "SBA") Paycheck Protection Program (the "Government Grant Advance") and utilized the advance to balance its employee-related actions previously taken with the business needs to ensure a significant portion of the loan will be forgiven. The Government Grant Advance matures in 2 years with accrued interest at an annual rate of 1.00%, being deferred for payments on amounts not forgiven at the later of (a) 10 months following the borrower's covered period, or (b) when the SBA remits any amounts forgiven to the lender. According to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, the Company recorded $3.4 million in other income on the Consolidated Statements of Operations for the year ended December 31, 2020.

Nasdaq Delisting Notice

On April 9, 2021, the Company received a notice (the “Notice”) from The Nasdaq Stock Market informing the Company that for the last 30 consecutive business days, the bid price of the Company’s securities had closed below $1.00 per share, which is the minimum required closing bid price for continued listing on Nasdaq pursuant to Listing Rule 5450(a)(1) (the “Bid Price Requirement”). The Notice has no immediate effect on the Company’s Nasdaq listing or trading of the Company’s common stock. The Company has 180 calendar days, or until October 6, 2021, to regain compliance. To regain compliance, the closing bid price of the Company’s securities must be at least $1.00 per share for a minimum of ten consecutive business days. If the Company does not regain compliance by October 6, 2021, the Company may be eligible for additional time to regain compliance or if the Company is otherwise not eligible, the Company may request a hearing before a Hearings Panel.

The negative financial conditions described above raise substantial doubt about our ability to continue as a going concern as of December 31, 2020. To that end, and as described above, the Company is not currently generating revenues from operations that are sufficient to cover its operating expenses, and its available capital resources are not sufficient for it to continue to meet its obligations as they become due. As a result, the Company has engaged financial and legal advisors to assist it in, among other things, analyzing all available strategic alternatives to address its liquidity and capital structure. However, the Company cannot provide assurances that additional capital will be available when needed or that any strategic alternatives or restructuring pursued will be on acceptable. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Operating Activities

Our operating activities used $1816.48 million of cash during the year ended December 31, ~~2019~~2020 compared to $1318.34 million during the year ended December 31, ~~2018~~2019. The cash used for the year ended December 31, ~~2019~~2020 was mostly due to an increase in ~~accounts receivable of $3.7 million and~~ inventories of $69.18 million, and a reduction in deferred income of $2.4 million, in addition to $53.63 million of interest paid on our Notes, Revolver, and Term Loans. The cash used for the year ended December 31, ~~2018~~2019 was mostly due to an increase in accounts receivable of $43.07 million and inventories of $1.6.1 million, and a reduction in ~~accounts~~deferred ~~payable~~income of $32.4 million, in addition to $75.36 million of interest paid on our Notes, Revolver and Term Loans.

Investing Activities

Our investing activities used $83.29 million during the year ended December 31, ~~2019~~2020 compared to $258.32 million for the year ended December 31, ~~2018~~2019. The funds used for the year ended December 31, ~~2019~~2020 included $84.20 million in capital expenditure, the majority of which were for the continued facility expansion in Buena, NJ. The funds used for the year ended December 31, ~~2018~~2019 included $258.32 million in capital ~~expenditures~~expenditure, the majority of which were ~~also~~ for the continued facility expansion in Buena, NJ.

Financing Activities

Our financing activities provided $309.40 million of cash during the year ended December 31, ~~2019~~2020 compared to $2530.34 million of cash provided by in the year ended December 31, ~~2018~~2019. The cash provided during the year ended December 31, 2020 primarily consisted of $12.0 million of proceeds from the Series C Notes. The cash provided during the year ended December 31, 2019 consisted of proceeds from the ~~2023~~ Series B Notes net of issuance costs of $26.9 million as well as net borrowing from the Company’s Senior Credit Facility of $19.2 million, offset by the settlement of our 2019 Notes of $15.7 million. ~~The cash provided during~~

the year ended December 31, 2018 consisted of proceeds from the Prior Term Loan which was later replaced by the Senior Credit Facilities with Ares Capital Management.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.

Contractual Obligations

Our contractual obligations and commitments as of December 31, ~~2019~~2020 are presented below. Outstanding debt and interest obligation are discussed in Note 6 of our Consolidated Financial Statements. As more fully described under Item 2 - Properties, we lease a warehouse in Vineland, New Jersey, office space in Iselin, New Jersey, office space in Mississauga, Canada ~~and office and laboratory space in Tallinn, Estonia~~. Our remaining obligations under these leases are summarized below.

Obligations Due by Period(in thousands)

Contractual Obligations

Total

Less than 1 Year

1-3 Years

3-5 Years

More than 5Years

Short term debt obligations

—

Long term debt obligations

~~213~~181,~~959~~580

—

25181,~~000~~580

~~188,959~~—

—

Interest on debt obligations

5949,~~915~~306

1722,~~277~~740

3626,~~525~~566

~~6,113~~—

—

Operating Lease

32,~~423~~776

~~635~~587

1,~~160~~338

~~785~~851

~~843~~—

Total

~~277~~233,~~297~~662

1723,~~912~~327

62209,~~685~~484

~~195,857~~851

~~843~~—

We have certain licensing and development agreement in place under which we will pay certain licensing fees and milestones over the lives of certain projects. These commitments totaled approximately $2.4 million as of December 31, 2019 and will be paid over the next several years in accordance with agreed upon milestones.

Critical Accounting Policies and Estimates

Our consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, which require us to make subjective decisions, assessments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the judgment increases, such judgments become even more subjective. While we believe our assumptions are reasonable and appropriate, actual results may be materially different than estimated.

Impairment

The Company assesses the recoverability of its long-lived assets, which include property and equipment and definite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the twelve months ended December 31, 2020, the Company determined that there was an impairment of $101.5 million to its long-lived assets.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade receivables, restricted cash, accounts payable and other accrued liabilities at December 31, ~~2019~~2020 approximate their fair value for all periods presented. The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures”. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.


	Fair Value		Net Carrying Value
2023 Series C Convertible Notes	$	30,148	$	31,922
2023 Series D Convertible Notes	1,459		5,796

measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As of December 31, 2019, based on level 2 inputs, the fair value of our 2023 Notes was approximately$23.0 million compared to their carrying value of $53.1 million and the fair value of our 2023 Series B Notes was approximately $28.9 million including the derivative liability of $6.8 million as mentioned below.

As of December 31, 2019, based on level 3 inputs, the fair value of the derivative liability associated with our 2023 Series B Notes was $6.8 million. (Note 7).

Accounts Receivable and Allowance for Doubtful Accounts

The Company extends credit to wholesaler and distributor customers and national retail chain customers, based upon credit evaluations, in the normal course of business, primarily with 60 to 90-day terms. The Company maintains customer-related accruals and allowances that consist primarily of chargebacks, rebates, sales returns, shelf stock allowances, administrative fees and other incentive programs. Some of these adjustments relate specifically to the generic prescription pharmaceutical business. Typically, the aggregate gross-to-net adjustments related to these customers can exceed 70% of the gross sales through this distribution channel. Certain of these accruals and allowances are recorded in the balance sheet as current liabilities and others are recorded as a reduction to accounts receivable.

The Company extends credit to its contract services customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. The Company does not require collateral from its customers. Bad debt provisions are provided for on the allowance method based on historical experience and management’s evaluation of outstanding accounts receivable. The Company reviews the allowance for doubtful accounts regularly, and past due balances are reviewed individually for collectability. The Company charges off uncollectible receivables against the allowance when the likelihood of collection is remote.

Revenue Recognition

The Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The Company’s revenue is recorded net of accruals for estimated chargebacks, rebates, cash discounts, other allowances, and returns. The Company derives its revenues from three types of transactions: sales of its own pharmaceutical products (Company product sales), sales of manufactured product for its customers (contract manufacturing sales), and research and product development services performed for third parties. Due to differences in the substance of these transaction types, the transactions require, and the Company utilizes, different revenue recognition policies for each. Taxes collected from customers and remitted to government authorities are excluded from revenues.

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The standard, including subsequently issued amendments, replaces most existing revenue recognition guidance in U.S. GAAP. The key focus of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company performed a comprehensive review of its existing revenue arrangements as of January 1, 2018 following the five-step model. Based on the Company's analysis, there were no changes identified that impacted the amount or timing of revenues recognized under the new guidance as compared to the previous guidance. Additionally, the Company's analysis indicated that there were no changes to how costs to obtain and fulfill our customer contracts would be recognized under the new guidance as compared to the previous guidance. The impact of the adoption of this standard on the Company's Consolidated Balance Sheet, Consolidated Statement of Operations, and Consolidated Statement of Cash Flows was not material. The adoption of the new guidance impacted the way the Company analyzes, documents, and discloses revenue recognition under customer contracts beginning on January 1, 2018 and resulted in additional disclosures in the Company's financial statements.

Company Product Sales

Revenue from Company product sales is recognized upon transfer of control of a product to a customer at a point in time, generally as the Company's products are sold on an FOB destination basis and because inventory risk and risk of ownership passes to the customer upon delivery.

Company product sales are recorded net of accruals for estimated chargebacks, rebates, cash discounts, other allowances, and returns.

Revenue and Provision for Sales Returns and Allowances

As is customary in the pharmaceutical industry, the Company’s product sales are subject to a variety of deductions including chargebacks, rebates, cash discounts, other allowances, and returns. Product sales are recorded net of accruals for returns and allowances ("SRA"), which are established at the time of sale. The Company analyzes the adequacy of its accruals for returns and allowances quarterly. Amounts accrued for sales deductions are adjusted when trends or significant events indicate that an adjustment is appropriate. Accruals are also adjusted to reflect actual results. These provisions are estimates based on historical payment experience, historical relationship to revenues, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The Company uses a variety of methods to assess the adequacy of its returns and allowances reserves to ensure that its financial statements are fairly stated. These include periodic reviews of customer inventory data, customer contract programs, subsequent actual payment experience, and product pricing trends to analyze and validate the return and allowances reserves.

Chargebacks are one of the Company's most significant estimates for recognition of product sales. A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid to the Company by its wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at contract prices. The Company validates the chargeback accrual quarterly through a review of the inventory reports obtained from its largest wholesale customers. This customer inventory information is used to establish the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent a majority of the Company’s chargeback payments. The Company continually monitors current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated.

Rebates are used for various discounts and rebates provided to customers. The Company reviews the percentage of products sold through these programs by reviewing chargeback data and applies the appropriate percentages to calculate the rebate accrual. Rebates invoices and/or payments are received monthly, quarterly or annually and reviewed against the accruals. Other items that could be included in accrued rebates represent price protection fees, shelf stock adjustments (SSAs) or other various amounts that would serve as one-time discounts on specific products.

Net revenues and accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. Certain SRA balances are included in accounts payable and accrued expenses.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management 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 amounts of revenues and expenses during the reporting period. Significant estimates include the valuation of the derivative liability associated with certain Notes, sales returns and allowances, allowances for excess and obsolete inventories, allowances for doubtful accounts, provisions for income taxes and related valuation allowances, stock based compensation, the assessment for the impairment of long-lived assets (including intangibles, goodwill and property, plant and equipment), property, plant and equipment and legal accruals. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements for Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

57As of December 31, 2020, our principal debt obligations consisted of our Series C Notes, Series D Notes, and our Senior Credit Facilities.

AsOn ofApril ~~December 31~~27, ~~2019~~2018, ~~our~~we ~~principal~~entered ~~debt~~into ~~obligations~~separate ~~consisted~~exchange agreements with certain holders of our ~~2023~~then outstanding 2019 Notes. The agreements gave the holders the right to exchange an aggregate of $75.1 million of the 2019 Notes for $75.1 million of Series A Notes. Following the issuance of the Series D Notes, ~~our~~all ~~2023~~outstanding debt with respect to the Series BA Notes had been extinguished through exchange of Series C Notes and ~~our~~Series ~~Senior~~D ~~Credit~~Notes. ~~Facilities~~As a result, we have no market risk related to the Series A Notes.

On ~~April~~October 2728, ~~2018~~2019, we ~~entered~~completed ~~into~~the ~~separate~~sale ~~exchange~~of ~~agreements~~$29.3 ~~with~~million ~~certain~~aggregate ~~holders~~principal amount of our ~~then~~Series ~~outstanding~~B ~~2019~~ Notes. ~~The~~for ~~agreements~~cash ~~gave~~and ~~the~~we ~~holders~~issued ~~the right to exchange~~ an ~~aggregate~~additional of $755.1 million ofaggregate ~~the~~principal ~~2019~~amount ~~Notes for $75.1 million~~ of ~~2023~~the ~~Notes.~~Series ~~The~~B ~~2023~~ Notes ~~bear a fixed interest rate of 4.75% per year, payable semi-annually~~ in ~~cash~~exchange ~~with~~for ~~the~~an aggregate principal ~~payable~~amount inof ~~May 2023~~$9.0 Atmillion ~~the option~~ of the ~~holders,~~Series ~~the~~A ~~2023~~ Notes. ~~are~~Following ~~convertible~~the ~~into~~issuance ~~shares~~ of the ~~Company’s~~Series ~~common~~D ~~stock~~Notes, ~~cash~~all oroutstanding adebt ~~combination~~with ~~thereof~~respect ~~at an initial conversion price per share of $4.45, subject~~ to ~~adjustment~~the inSeries ~~certain~~B ~~circumstances.~~Notes Inhad ~~addition,~~been ~~holders~~extinguished ~~will~~through beexchange ~~entitled to receive additional shares~~ of ~~common~~Series ~~stock~~C ~~for~~Notes aand ~~potential~~Series ~~increase~~D inNotes. ~~the~~As ~~conversion rate under~~ a ~~make-whole provision in some circumstances. As the interest rate under the 2023 Notes is fixed~~result, we have no market risk related ~~thereto~~to the Series B Notes.

On ~~October~~December 2813, ~~2019~~2018, we ~~completed~~entered into the ~~sale~~Senior Credit Facilities, consisting of ~~$29~~the Revolver and Term Loans.3 The ~~million~~Senior ~~aggregate~~Credit ~~principal~~Facilities ~~amount~~also ofincluded ~~our~~a ~~2023~~$15.0 ~~Series~~delayed Bdraw ~~Notes~~term ~~for~~loan ~~cash~~commitment, which remained undrawn and weexpired ~~issued~~on anOctober ~~additional~~31, 2019. As of March 31, 2020, $525.10 million ~~aggregate~~was ~~principal~~drawn ~~amount~~under the Revolver and $88.5 million of ~~the~~Term ~~2023~~Loans ~~Series~~were Boutstanding. ~~Notes~~The Revolver was fully drawn in ~~exchange~~2019. ~~for~~On anApril ~~aggregate~~6, ~~principal~~2020, ~~amount~~the ofCompany $9entered (i) Amendment No.0 ~~million~~2 of the ~~2023~~Revolver ~~Notes~~and Amendment No. ~~Interest~~ on4 of the ~~outstanding~~Term ~~principal~~Loans, effective as of December 31, 2019 (together, the ~~2023~~“April ~~Series~~2020 BAmendments”). The ~~Notes~~April ~~accrues~~2020 atAmendments ~~either~~together, among other things, (xi) increased the interest rates, (ii) reset certain prepayment premiums and modified the terms of certain mandatory prepayments and (iii) modified certain financial covenant levels inclusive of the disposition of prior covenants as of and for the period ended December 31, 2019. The Revolver bears interest at a ~~fixed~~fluctuating rate of 7interest equal to the one, two, three or six-month LIBOR plus a margin of 5.5% ifor a rate based on the ~~Company~~prime ~~elects~~rate toplus ~~pay~~a margin of 4.5%, with a LIBOR floor of 1.5%. The Term Loans bear interest inat ~~cash~~a fluctuating rate of interest equal to the one, two, three or ~~(y)~~six-month 8LIBOR plus a margin of 13.0% ifor a rate based on the ~~Company~~prime ~~elects~~rate toplus ~~pay~~a ~~interest~~margin inof ~~kind~~12.0%, with a LIBOR floor of 1.5%. InInterest ~~any~~on ~~case,~~the ~~interest~~Senior isCredit ~~due~~Facilities ~~and~~is payable ~~(either~~ in cash quarterly in arrears (or more frequently in ~~kind,~~connection aswith ~~elected~~customary byLIBOR interest provisions), provided, that the Company) ~~semi-annually~~may ~~every~~elect ~~May~~(and 1has covenanted to the lenders under its Senior Credit Facilities and ~~November~~subsequent 1amendments ~~(commencing~~thereto) to pay interest on ~~May~~the 1Term Loans in kind through December 13, ~~2020~~2021 but only if the following occurs: (1) ~~until~~the Company receives a “warning letter close-out letter” from the ~~2023~~Federal ~~Series~~Drug BAdministration ~~Notes~~in ~~mature~~response onto ~~May~~corrective 1,actions ~~2023. Holders~~taken ofby the ~~2023~~Company ~~Series~~since Breceipt ~~Notes~~of ~~are~~the ~~entitled~~warning toletter ~~convert~~in ~~principal~~November 2019 and ~~accrued,~~(2) ~~unpaid~~the ~~interest~~Company onreceives a written recommendation from the ~~2023~~Federal ~~Series~~Drug BAdministration ~~Notes~~setting ~~into,~~forth its approval decision in respect of the pre-approval inspection for commercial production on the newly installed injectable line at the Company’s ~~election,~~New ~~cash,~~Jersey ~~shares~~facility. If only one of ~~Common~~those ~~Stock~~items occurs by December 13, or2020, athen ~~combination~~the ~~thereof~~Company may still elect to pay interest in kind during 2021, atbut anonly ~~initial~~from ~~conversion~~the ~~price~~time ~~per~~the ~~share~~second ofcondition ~~Common~~has ~~Stock~~been ~~equal~~satisfied tountil $0December 13, 2021.72 Thereafter, ~~subject~~a portion of interest on the loans accruing at a rate of 4.25% per annum may continue to ~~adjustment~~be ~~under~~paid ~~certain~~in ~~circumstances~~kind. The Company has ~~covenanted~~elected tothe ~~its~~paid-in-kind ~~lenders~~interest ~~under~~option and increased the ~~Senior~~principal ~~Credit~~balance ~~Facilities~~of toTerm ~~not~~Loans ~~elect~~by to$14.4 ~~pay~~million ~~interest~~and in$22.9 ~~cash~~million for sothe ~~long~~twelve asmonths itand ~~has~~since inception through the ~~option~~period toended doDecember so31, 2020, respectively. As the interest ~~rate~~rates ~~under~~applicable ~~2023~~to ~~Series~~the BSenior ~~Notes~~Facilities isare ~~fixed~~fluctuating, we do have no market risk related thereto.

On ~~December~~July 1320, ~~2018~~2020, ~~we entered into~~ the ~~Senior~~Company ~~Credit~~completed ~~Facilities, consisting of~~ the ~~Revolver~~sale and ~~Term~~issuance ~~Loans. The~~of ~~Senior Credit Facilities also included a~~ $1513.08 ~~delayed~~million ~~draw~~aggregate ~~term~~principal ~~loan~~amount ~~b commitment, which remained undrawn and expired on October 31, 2019. As~~ of ~~December~~its ~~31,~~Series ~~2019,~~C ~~$25~~Notes.0 ~~million~~The ~~was~~Company ~~drawn~~also ~~under~~issued ~~the~~approximately ~~Revolver and~~ $8832.53 million ofin ~~Term~~aggregate ~~Loans~~principal ~~were~~amount ~~outstanding. As~~ of ~~December~~Series ~~31,~~C ~~2019,~~Notes ~~the~~in ~~Revolver~~exchange ~~was~~for ~~fully~~approximately ~~drawn~~$35.9 ~~The~~million ~~Revolver~~in ~~bears~~aggregate ~~interest~~principal ~~at a fluctuating rate of interest equal to one~~amount, ~~two, three or six-month LIBOR~~ plus aaccrued ~~margin~~but ofunpaid ~~3.75%~~interest ~~or a rate based on the prime rate plus a margin of 2.75%. The Revolver matures on the earliest to occur of the June 23~~thereon, ~~2024 and the date~~ of ~~that is 91 days prior to~~ the ~~maturity~~Company’s ~~date~~outstanding ~~of each of (x) the 2023 Notes and (y) the 2023~~ Series B Notes., ~~The~~giving ~~Term~~effect ~~Loans bear interest at a fluctuating rate of interest equal~~ to ~~one, two, three or six-month LIBOR plus~~ a ~~margin of 8.75~~10% ordiscount ~~a rate based~~ on the ~~prime~~principal ~~rate~~amount ~~plus a margin~~ of ~~7.75%. The Term Loans mature on~~ the ~~earliest~~Series toB ~~occur~~Notes ofexchanged. ~~the~~In ~~June 23~~addition, ~~2024 and~~ the ~~date~~Company ofissued ~~that~~approximately is$3.7 ~~181~~million ~~days~~in ~~prior~~aggregate toprincipal ~~the~~amount ~~maturity date~~ of ~~each~~Series ofC ~~(x) the 2023~~ Notes ~~and~~in ~~(y)~~exchange ~~the~~for ~~2023~~approximately ~~Series B Notes~~$8. ~~Interest~~2 onmillion ~~the Senior Credit Facilities is payable~~ in ~~cash~~aggregate ~~quarterly~~principal inamount, ~~arrears~~plus ~~(or~~accrued ~~more~~but ~~frequently~~unpaid ~~in connection with customary LIBOR~~ interest ~~provisions)~~thereon, ~~provided,~~of ~~that~~ the Company’s ~~may~~outstanding ~~elect~~Series ~~(and~~A ~~has~~Notes, ~~covenanted~~giving toeffect ~~the lenders under its First Lien Credit Agreement~~ to) ~~pay~~a ~~interest~~55% discount on the ~~Term~~principal ~~Loans~~amount ~~in kind until the earlier to occur~~ of the ~~date~~Series ~~upon~~A ~~which~~Notes ~~Company has provided financial statements demonstrating twelve-months of revenue of at least $125,000,000 and (ii) December 28, 2020~~exchanged. As ~~the interest rates applicable to the Senior Facilities are fluctuating, we do have market risk related thereto.~~

OnInterest ~~April~~on 6the 2023 Series C Secured Convertible Notes accrues at the rate of 9.5% per annum and is payable in kind and capitalized with principal semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2020. The 2023 Series C Secured Convertible Notes will mature on March 30, 2023, unless earlier converted or repurchased and are subordinate to the ~~Company~~indebtedness ~~entered~~under ~~(i)~~the ~~Amendment~~Senior NoCredit Facilities. 2The ofCompany has elected the ~~Revolver~~paid-in-kind interest option and ~~Amendment~~increased ~~No.~~the 4principal balance of the ~~Term~~2023 ~~Loans,~~Series ~~effective~~C asSecured ofConvertible Notes by $0.5 million in the twelve months ended December 31, ~~2019~~2020. The ~~amendments~~Company ~~collectively~~has ~~among~~agreed ~~other~~to ~~things,~~use ~~(i)~~its ~~increase~~commercially reasonable best efforts to obtain the ~~interest~~approval ~~rates,~~of ~~(ii)~~its ~~reset~~stockholders ~~certain~~that ~~prepayment~~is ~~premiums~~required under applicable Nasdaq rules and ~~modify~~regulations ~~the~~to ~~terms~~permit holders of ~~certain~~the ~~mandatory~~2023 ~~prepayments~~Series ~~and~~C ~~(iii)~~Secured ~~modify~~Convertible ~~certain~~Notes ~~financial~~to ~~covenant~~beneficially ~~levels~~own ~~inclusive~~shares of common stock without being subject to the ~~disposition~~Nasdaq Change of ~~prior~~Control ~~covenants~~Cap. asIn ofthe ~~and~~event ~~for~~that the ~~period~~Company ~~ended~~did ~~December~~not ~~31,~~obtain ~~2019.~~ such stockholder approval at an annual or special meeting of its stockholders on or

~~The~~before ~~associated~~October ~~increase~~31, in2020, ~~interest~~holders ~~rates are effective as~~ of ~~the~~a ~~Amendment~~majority ~~Closing~~in ~~Date. The~~aggregate ~~Revolver~~principal ~~bears~~amount ~~interest at a fluctuating rate~~ of ~~interest~~outstanding ~~equal~~2023 toSeries ~~the~~C ~~one,~~Secured ~~two,~~Convertible ~~three~~Notes ormay ~~six-month~~elect ~~LIBOR~~to ~~plus~~increase athe ~~margin~~interest ~~of 5.50% or a~~ rate ~~based~~payable on the ~~prime~~2023 ~~rate~~Series ~~plus~~C aSecured ~~margin~~Convertible ofNotes ~~4.50%,~~to ~~with a LIBOR floor of 1~~18.50%~~. The~~ ~~Term~~per ~~Loans~~annum ~~bear~~until ~~interest~~such atstockholder aapproval ~~fluctuating~~is ~~rate~~obtained, ofwhich ~~interest~~will ~~equal~~continue to ~~the~~be ~~one,~~paid ~~two,~~in ~~three~~kind orin ~~six-month~~the ~~LIBOR~~form ~~plus~~of aadditional ~~margin~~principal ofwith ~~13.0%~~respect orto aany ~~rate~~applicable ~~based~~period onin which the ~~prime~~increased interest rate ~~plus~~remains ain ~~margin of 12~~effect.~~0%,~~ ~~with~~Pursuant to a ~~LIBOR~~notice ~~floor~~dated ofNovember ~~1.5%. Interest~~2, on2020, the ~~Senior~~holders ~~Credit~~of ~~Facilities~~a ismajority ~~payable~~ in ~~cash~~principal ~~quarterly~~amount inof ~~arrears~~the ~~(or~~outstanding ~~more~~2023 ~~frequently~~Series inC ~~connection~~Secured ~~with~~Convertible ~~customary~~Notes ~~LIBOR~~elected ~~interest~~to ~~provisions),~~increase ~~provided,~~the ~~that~~interest ~~the~~rate ~~Company~~payable ~~may~~on ~~elect~~the ~~(and~~2023 ~~has~~Series ~~covenanted~~C toSecured ~~the~~Convertible ~~lenders~~Notes ~~under~~from ~~its~~9.5% ~~Senior~~to ~~Credit~~18.0%. The ~~Facilities~~Company convened and ~~subsequent~~adjourned ~~amendments~~a ~~thereto)~~special tomeeting ~~pay~~of ~~interest~~stockholders on ~~the~~October ~~Term~~22, ~~Loans~~2020, inand ~~kind~~further ~~through~~adjourned ~~December~~such ~~13,~~special ~~2021~~meeting ~~but~~on ~~only~~November if11, ~~the~~2020 ~~following~~and ~~occurs:~~November ~~(1)~~25, ~~the~~2020 ~~Company~~due ~~receives~~to a ~~“warning~~lack ~~letter~~of ~~close-out~~quorum. The ~~letter”~~special ~~from~~meeting ~~the~~of ~~Federal~~stockholders ~~Drug~~was ~~Administration~~held inon ~~response~~December to16, ~~corrective~~2020, ~~actions~~pursuant ~~taken~~to bywhich the ~~Company~~stockholders ~~since receipt~~ of the ~~warning~~Company ~~letter~~approved ~~in November 2019 and (2)~~ the ~~Company~~holders ~~receives~~of ~~a written recommendation from~~ the ~~Federal~~2023 ~~Drug~~Series ~~Administration~~C ~~setting~~Secured ~~forth~~Convertible ~~its~~Notes ~~approval~~beneficially ~~decision~~owning inshares ~~respect~~ of ~~the~~common ~~pre-approval~~stock ~~inspection~~without ~~for~~being ~~commercial~~subject ~~production~~to on the ~~newly~~Nasdaq ~~installed~~Change ~~injectable~~of ~~line~~Control atCap. ~~the~~As ~~Company’s~~a ~~New~~result ~~Jersey~~of ~~facility. If~~the ~~only~~approval, ~~one~~the ofinterest ~~those~~rate ~~items~~payable ~~occurs~~on bythe ~~December~~2023 ~~13,~~Series ~~2020,~~C ~~then~~Secured ~~the~~Convertible ~~Company~~Notes ~~may~~was ~~still~~decreased ~~elect~~to 9.5%.

58On September 22, 2020, the Company completed the issuance of approximately $27.5 million aggregate principal amount of its Series D Notes in exchange for approximately $59.0 million in aggregate principal amount, plus accrued but unpaid interest, of Series A Notes, giving effect to a 53.4% discount on the principal amount of the Series A Notes exchanged. The Company also issued approximately $0.4 million aggregate principal amount of the Series D Notes in exchange for approximately $0.5 million in aggregate principal amount, plus accrued but unpaid interest, of the Company’s outstanding Series B Notes, giving effect to a 31.9% discount on the principal amount of the Series B Notes exchanged. As the interest rate on the Series D Notes is fixed, we have no market risk related thereto.

toOur ~~pay~~financial ~~interest~~instruments ininclude ~~kind~~cash ~~during~~and ~~2021~~cash equivalents, ~~but~~accounts ~~only~~receivable, ~~from~~accounts ~~the~~payable ~~time~~and Notes. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate book value because of the ~~second~~short ~~condition~~maturity ~~has~~of ~~been~~these ~~satisfied~~instruments. ~~until~~As of December 31, 132020, ~~2021. Thereafter~~based on level 2 inputs, athe ~~portion~~fair value of ~~interest~~our onSeries ~~the~~C ~~loans~~Notes ~~accruing~~was atapproximately a$30.1 million ~~rate~~compared to their carrying value of 4$31.~~25%~~9 ~~per~~million ~~annum~~and ~~may~~the ~~continue~~fair value of our Series D Notes was approximately $1.5 million compared to betheir ~~paid~~carrying invalue ~~kind~~of $5.8 million.

~~Our~~On ~~financial~~May ~~instruments~~15, ~~include~~2020, ~~cash~~we ~~and~~received ~~cash~~$3.4 ~~equivalents,~~million ~~accounts~~of ~~receivable,~~proceeds ~~accounts~~from ~~payable~~the ~~and Notes~~U.S. ~~The~~Small ~~fair~~Business ~~values~~Administration ofPaycheck ~~cash~~Protection ~~and~~Program ~~cash~~(the ~~equivalents,~~"Government ~~accounts~~Grant ~~receivable~~Advance") and ~~accounts~~has ~~payable~~been ~~approximate~~utilizing ~~book~~the ~~value~~fund ~~because~~to ofbalance its employee-related actions previously taken with the ~~short~~business ~~maturity~~needs to ensure a significant portion of ~~these~~the ~~instruments~~advance will be forgiven. AsThe ofGovernment ~~December~~Grant ~~31,~~Advance ~~2019~~matures in 2 years with accrued interest at an annual rate of 1.00%, ~~based~~being deferred for payments on ~~level~~amounts 2not ~~inputs,~~forgiven at the ~~fair~~later ~~value~~ of ~~our~~(a) ~~2023~~10 ~~Notes~~months ~~was~~following ~~approximately~~the ~~$23.0~~borrower's ~~million~~covered ~~compared~~period, toor ~~their~~(b) ~~carrying~~when ~~value~~the ofSBA ~~$53~~remits any amounts forgiven to the lender.1 ~~million~~As ~~and~~the interest rate under the ~~fair~~Advance ~~value~~is offixed, ~~our~~we ~~2023~~have ~~Series~~no Bmarket ~~Notes~~risk ~~was~~related ~~approximately~~thereto. According to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, the Company recorded $283.94 million ~~including~~in other income on the ~~derivative~~Consolidated ~~liability~~Statements of ~~$6.8~~Operations ~~million.~~for the year ended December 31, 2020.

For a description of the fair value hierarchy and the Company's fair value methodologies, see Note 2 "Summary of Significant Accounting Policies."

As of December 31, ~~2019~~2020, the majority of our cash and cash equivalents was invested in overnight instruments, the interest rates of which may change daily. Accordingly, these overnight investments are subject to market risk.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements on page F-1.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON AUDITING AND FINANCIAL DISCLOSURE

None.

Item 9a. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, ~~2019~~2020, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and ~~Chief~~Principal ~~Financial~~Accounting Officer ("PAO"), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on this evaluation, such officers have concluded that our disclosure controls and procedures were not effective as of December 31, ~~2019~~2020 (the “Evaluation Date”), because of the material weaknesses in our internal control over financial reporting described below.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) and based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO framework”). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP.

An effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

Management, including our ~~Chief~~CEO ~~Executive Officer~~ and ~~Chief Financial Officer~~PAO, assessed the Company’s internal control over financial reporting and concluded that they were not effective as of December 31, ~~2019~~2020. In making this assessment, management used the criteria set forth by the COSO framework. Based on evaluation under these criteria, management determined, based upon the existence of the material weaknesses described below, that we did not maintain effective internal control over financial reporting as of the Evaluation Date.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

Control Environment

We did not maintain an effective control environment based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control environment of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) appropriate organizational structure, reporting lines, and authority and responsibilities in pursuit of objectives, (ii) our commitment to attract, develop, and retain competent individuals, and (iii) holding individuals accountable for their internal control related responsibilities. As disclosed in the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data”, these material weaknesses contributed to accounting errors.

We did not maintain an effective control environment to enable the identification and mitigation of risks of accounting errors based on the contributing factors to material weakness in the control environment, including:

•We did not attract, develop, and retain competent management; and

•Our oversight processes and procedures that guide individuals in applying internal control over financial reporting were not adequate in preventing or detecting accounting errors.

Risk Assessment

We did not design and implement an effective risk assessment based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the risk assessment component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) identifying, assessing, and communicating appropriate objectives, (ii) identifying and analyzing risks to achieve these objectives, and (iii) identifying and assessing changes in the business that could impact our system of internal controls.

Control Activities

We did not design and implement effective control activities based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control activities component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting and developing control activities and information technology that contribute to the mitigation of risks and support achievement of objectives and (ii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

The following ~~deficiency~~deficiencies in control activities, among others, contributed to accounting errors or the potential for there to have been accounting errors in substantially all financial statements account balances and disclosures:

•Lack of sufficient resources within the accounting and financial reporting department to review for the completeness and accuracy of source data in the calculation of certain gross-to-net revenue reserves and allowances;

•Inadequate segregation of duties.

Information and Communication

We did not generate and provide quality information and communication based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the information and communication component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to obtaining, generating, and using relevant quality information to support the function of internal control.

Monitoring Activities

We did not design and implement effective monitoring activities based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the monitoring component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting, developing, and performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning, and (ii) evaluating and communicating internal control deficiencies in a timely manner to those parties responsible for taking corrective action.

The following were contributing factors to the material weaknesses in monitoring activities:

• As new controls were implemented throughout the year, testing procedures were delayed, which resulted in delayed and limited communication of control failures to process owners.

• Failure to effectively communicate relevant information and internal control deficiencies to our Audit Committee for appropriate oversight, monitoring and enforcement of corrective action.

As the Company is ~~now classified as~~ a smaller reporting company, Deloitte & Touche LLP, our independent registered public accounting firm, has not audited the effectiveness of our internal control over financial reporting as of December 31, ~~2019~~2020.

Changes in Internal Control Over Financial Reporting

There were changes made during the year ended December 31, ~~2019~~2020 in our internal control over financial reporting that have affected, or are reasonably likely to affect, our internal control over financial reporting. These changes, however, were not all in place for an adequate period of time for management to appropriately assess the operating effectiveness of these controls.

not all in place for an adequate period of time for management to appropriately assess the operating effectiveness of these controls.

Remediation Plan and Status

Our remediation efforts are ongoing and we will continue our initiatives to implement and document policies, procedures, and internal controls.

Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout ~~2020~~2021 and beyond, as necessary. We will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

While we believe the steps taken to date and those planned for implementation will improve the effectiveness of our internal control over financial reporting, we have not completed all remediation efforts identified herein. Accordingly, as we continue to monitor the effectiveness of our internal control over financial reporting in the areas affected by the material weaknesses described above, we have and will continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures and employing any additional tools and resources deemed necessary, to ensure that our consolidated financial statements are fairly stated in all material respects. The following remediation activities highlight our commitment to remediating our identified material weaknesses:

Control Environment

We have undertaken steps to address material weaknesses in the control environment. The control environment, which is the responsibility of management, sets the tone of the organization, influences the control consciousness of its people, and is the foundation for all other components of internal control over financial reporting. Our Audit Committee and management have emphasized and continued to emphasize the importance of internal control over financial reporting, as well as the integrity of our financial statements.

Our management has taken and will continue to take steps to ensure that previously identified control deficiencies will be remediated through the implementation of uniform accounting and internal control policies and procedures with the proper oversight to promote compliance with GAAP and regulatory requirements.

To date, we have hired a new senior leader in one of our foreign affiliates who, among other responsibilities, ensures customer contract terms and price concessions are reviewed with key members of the accounting and financial reporting department on a timely basis to appropriately reflect in the financial records. In addition, we hired new accounting and financial reporting team members and engaged external resources with significant experience with systems similar to the Company's ERP system and infrastructure to provide additional capacity, analytical and functional capabilities, and cross-training. The addition of skilled personnel will allow us to select and develop appropriate policies, procedures, and controls to strengthen our control environment. Management will evaluate and correct segregation of duties concerns where possible: however due to the limited size of the organization, inclusive of the finance and IT departments, management may not economically be able to correct certain segregation of duty issues . We will continue to evaluate and hire additional resources within our accounting and financial reporting, internal audit, and information technology functions with the appropriate experience, certifications, education, and training for key financial reporting and accounting positions when budgets permit. Management believes this will reduce the risk of a material misstatement resulting from the material weaknesses described above. However, it will require a period of time to determine the operating effectiveness of these newly implemented internal controls over financial reporting.

Risk Assessment

We have begun to implement a process for performing detailed reviews of financial records at our corporate headquarters for the purpose of identifying and correcting accounting errors. We will continue to enhance risk assessment procedures and conduct a comprehensive risk assessment to enhance overall compliance. The results of this effort are expected to enable us to effectively identify, develop, and implement controls and procedures to address risks.

Control Activities

We have begun the process of redesigning and implementing internal control activities. We also plan to establish policies and procedures and have enhanced corporate oversight of process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility, and accountability to further the remediating of our material weaknesses.

Information and Communication

We have taken various steps to enhance our practices as itthey ~~relates~~relate to information and communication, including conducting periodic reviews of the ERP system access to ensure appropriate segregation of duties exists for functional and administrative users and establishing policies and procedures addressing the internal control framework and operating effectiveness of the Company’s third-party ERP service provider.

Monitoring Activities

In addition to the items noted above, as we continue to evaluate, remediate, and improve our internal control over financial reporting, executive management may elect to implement additional measures to address control deficiencies or may determine that the remediation efforts described above require modification. Executive management, in consultation with and at the direction of our Audit Committee, will continue to assess the control environment and the above-mentioned efforts to remediate the underlying causes of the identified material weaknesses, including through the following:

• We will continue to monitor internal audit, finance, accounting, and information technology staffing levels.

• We are also developing effective communication plans relating to, among other things, the identification of deficiencies and recommendations for corrective actions. These plans will apply to all parties responsible for remediation.

Inherent Limitations on Effectiveness of Controls

Management, including our CEO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our organization have been or will be prevented or detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

Item 9B. OTHER INFORMATION

None.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

~~The~~Our ~~response~~Board ~~to this item is incorporated by reference from the discussion responsive thereto under the captions “Management and Corporate Governance and “Code~~ of ~~Conduct~~Directors and ~~Ethics”~~Executive ~~in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders.~~Officers

Set forth below are the names of our executive officers and directors, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years. Additionally, information about the specific experience, qualifications, attributes or skills that led to our Board of Directors’ conclusion at the time of their election as directors that each person listed below should serve as a director is set forth below. Our previous executive officers, Mr. Jason Grenfell-Gardner and Mr. Damian Finio, resigned on February 4, 2020 and October 14, 2020, respectively.

Each of our directors, except William S. Marth and R. Carter Pate, were elected at the Company’s 2020 annual meeting of stockholders for a one year term to serve until the 2021 annual meeting of stockholders and until their respective successors have been elected and qualified, or until his or her earlier resignation or removal. Mr. Marth and Mr. Pate were elected by the Board in February 2021, each to serve until the 2021 annual meeting of stockholders and until his respective successor has been elected and qualified, or until his earlier resignation or removal.


Name	Age	Position with the Company
Timothy B. Sawyer	55	Director, Chief Executive Officer
Philip K. Yachmetz	64	Chief Legal Officer and Corporate Secretary
Ernest R. De Paolantonio	67	Chief Financial Officer
John Celentano(1)(2)	61	Director, Chairman of the Board
Bhaskar Chaudhuri(2)(3)	66	Director
Carole S. Ben-Maimon, M.D.(2)(3)	62	Director
Steven Koehler(2)	70	Director
William S. Marth(1)(3)	66	Director
R. Carter Pate(2)(3)	66	Director
Thomas J. Sabatino, Jr. (1)(2)	62	Director

(1) Member of the Organization and Compensation Committee of the Board of Directors.

(2) Member of the Audit Committee of the Board of Directors.

(3) Member of the Nominating and Corporate Governance Committee of the Board of Directors.

Timothy B. Sawyer – Chief Executive Officer and Director

Timothy B. Sawyer, age 55, has served as Chief Executive Officer and as a member of our Board of Directors since February 4, 2020. Prior to joining Teligent, from 1993 through 2009, Mr. Sawyer held a variety of senior executive positions in general management, marketing and sales at Barr Laboratories. From 2008 through 2009, Mr. Sawyer served as Executive Vice President, Global Generic Sales and Marketing and led a team of nearly 2,000 employees in 25 countries. Subsequent to his experience at Barr Laboratories, from 2009 through 2012, Mr. Sawyer served as Senior Vice President, Corporate Strategic Development at Mylan. More recently, from January 2014 through September 2017, Mr. Sawyer served as President, Retail Medicine of 1-800-Doctors, Inc. and from September 2017 through July 2019, he served as Chief Executive Officer of Geritrex, LLC, a private equity backed developer, manufacturer and marketer of generic over the counter pharmaceuticals. Mr. Sawyer holds a B.A. in Political Science from the University of Richmond. We believe Mr. Sawyers’s qualifications to serve as Chief Executive Officer and on the Board of Directors include his experience as a pharmaceutical executive and his experience in the commercialization of pharmaceutical products.

Philip K. Yachmetz – Chief Legal Officer and Corporate Secretary

Philip K. Yachmetz, age 64, has served as our Chief Legal Officer and Corporate Secretary since July 2020. He leads the Legal, Human Resources, IT and Investor Relations teams. From 2015 through June 2020, Mr. Yachmetz, served as Chief Legal and

Compliance Officer of Sovereign Medical Services, Inc., a privately held community healthcare system company. Prior to his position at Sovereign, Mr. Yachmetz held positions at Savient Pharmaceuticals, Inc. from 2004 to 2014, including Co-President, Chief Business Officer and General Counsel and Secretary from 2004 to 2014, and Senior Vice President, Executive Vice President, Chief Business Officer, General Counsel and Secretary from 2004 to 2013. Mr. Yachmetz holds a J.D. from the California Western School of Law and a B.A. from George Washington University.

Ernest R. De Paolantonio – Chief Financial Officer

Ernest R. De Paolantonio, age 67, has served as our Chief Financial Officer since April 15, 2021 and will lead our Finance team. He has over 40 years of varied financial and business experience in the pharmaceutical industry. Most recently, Mr. De Paolantonio served as Chief Financial Officer of Fortovia Therapeutics Inc., a privately held healthcare company providing support to cancer patients and their families. Prior to his position at Fortovia, Mr. De Paolantonio served as Chief Financial Officer, Secretary and Treasurer at BioDelivery Sciences International, Inc., a publicly-held specialty pharmaceutical company from 2013 to 2019. Prior to Mr. De Paolantonio’s position with BioDelivery Sciences, he served as the Chief Financial Officer of CorePharma LLC, a private specialty generic company, and held finance and controllers’ positions in roles of increasing responsibility at Colombia Laboratories. Mr. De Paolantonio received his BA from Lycoming College; his MBA in Finance at Saint Joseph’s University and is a licensed CPA.

John Celentano – Director, Chairman of the Board

John Celentano, age 61, has served as a member of our Board of Directors since March 2015 and Chairman of the Board since July 2020. Mr. Celentano currently works as an advisor to the pharmaceutical industry. He retired from Bristol-Myers Squibb Company in 2013 where he held senior leadership positions including: President, Bristol-Myers Squibb Healthcare Group (Mead Johnson Nutrition, ConvaTec, and Medical Imaging); Regional President roles in Emerging Markets/Asia Pacific, Latin America/Canada, and UK/Northern Europe; and SVP of Human Resources. He serves on the Boards of privately held JJ White Inc. and the not-for-profit CMMB. Mr. Celentano holds a B.A. from the University of Delaware and an MBA from Drexel University. We believe Mr. Celentano’s qualifications to serve on the Board of Directors include his extensive experience in the pharmaceutical industry.

Bhaskar Chaudhuri – Director

Bhaskar Chaudhuri, age 66, has served as a member of our Board of Directors since 2010. Mr. Chaudhuri has more than 20 years’ experience in pharmaceutical management, research and development. Since June 2011, he has been the Operating Partner at Frazier Healthcare Ventures. Prior to that time, Mr. Chaudhuri served as President of Valeant Pharmaceuticals International, Inc. from January 2009 to September 2010. Prior to joining Valeant, Mr. Chaudhuri served for seven years as President and Chief Executive Officer of Dow Pharmaceutical Sciences, Inc. and as a member of its board of directors from 2003 to 2008, at which time Dow was acquired by Valeant. Prior to that, Mr. Chaudhuri served as Executive Vice President of Scientific Affairs at Bertek Pharmaceuticals, Inc., a subsidiary of Mylan N.V., from 1998 to 2000. Prior to his positions at Bertek, Mr. Chaudhuri served as the General Manager of the Dermatology Division of Mylan. Mr. Chaudhuri joined Mylan through the acquisition of Penederm, Inc., where he worked from 1992 to 1998 in a number of senior positions before becoming the Vice President of Research and Development. Mr. Chaudhuri serves on the boards of directors of Corium International, Inc., Silvergate Pharmaceuticals, Inc. and Vyome Biosciences, Ltd. Mr. Chaudhuri holds a B.S. in Pharmacy and an M.S. in Industrial Pharmacy from Jadavpur University and a Ph.D. in Pharmaceutics from the University of Louisiana. We believe Mr. Chaudhuri’s qualifications to serve on the Board of Directors include his many years of experience in the pharmaceutical industry, including his prior positions in senior executive roles at major pharmaceutical companies.

Carole S. Ben-Maimon, M.D. – Director

Carole S. Ben-Maimon, M.D., age 62, has served as a member of our Board of Directors since March 2016. Dr. Ben-Maimon is currently a director, President and Chief Executive Officer of Larimar Therapeutics, Inc. (formerly Zafgen, Inc.), which completed a business combination with Chondrial Therapeutics, Inc., effective May 28, 2020, with Chondrial surviving as a wholly owned subsidiary of Larimar. Larimar Therapeutics, Inc. focuses on developing therapies for complex rare diseases, specifically Friedreich's Ataxia. Prior to the consummation of the merger and from December 2016, Dr. Ben-Maimon served as Chondrial Therapeutics, Inc.’s President, Chief Executive Officer and a member of its Board. Prior thereto and from 2014 to 2016 Dr. Ben-Maimon served as a consultant at CSGB Consulting, LLC. From September 2011 to November 2014, Dr. Ben-Maimon served as President of the generic products division of Impax Laboratories, Inc. Prior to that, she served as Senior Vice President, Corporate Strategy, at Qualitest Pharmaceuticals, Inc. from July 2009 to July 2010. Prior to her role at Qualitest, she served as Founder, President and Chief Executive Officer and director of Alita Pharmaceuticals, Inc., an early stage, privately held specialty pharmaceutical company, from September 2006 to June 2009. Dr. Ben-Maimon also held executive positions

with and served as a member of the board with Barr Pharmaceuticals from 2001 to 2006, including as President and Chief Operating Officer of Duramed Research, Inc. (a wholly-owned subsidiary of Barr Pharmaceuticals Inc.). Dr. Ben-Maimon also held executive positions with Teva Pharmaceuticals USA, where she served as Senior Vice President, Science and Public Policy, from 2000 to 2001, Senior Vice President, Research and Development, from 1996 to 2000 and Vice President, Medical and Regulatory Affairs, with Lemmon Company (a wholly owned subsidiary of Teva Pharmaceuticals, Inc.) from 1993 to 1996. She served as the Chairman of the board of the Generic Pharmaceutical Association from 1999 to 2002. Dr. Ben-Maimon is a graduate of Thomas Jefferson Medical College and received a Bachelor of Arts in biology from The University of Pennsylvania, where she graduated magna cum laude. She completed clinical and research training in internal medicine and nephrology at Thomas Jefferson University. We believe that Dr. Ben-Maimon’s qualifications to serve on the Board of Directors include her years of experience in the pharmaceutical industry, including prior positions in various senior executive roles at pharmaceutical companies.

Steven Koehler – Director

Steven Koehler, age 70, has served as a member of our Board of Directors since October 2014. Mr. Koehler retired from Merck & Co., Inc. in September 2011 where, from November 2009 to September 2011, he served as Vice President, Schering-Plough Controller and Special Projects, and was a member of the Finance Senior Leadership Team. From March 2006 to November 2009, Mr. Koehler served as Vice President, Corporate Controller of Schering-Plough Corporation, where he also served as Chief Accounting Officer. Prior to his positions at Schering-Plough, Mr. Koehler served in several capacities at The Medicines Company, including Senior Vice President and Chief Financial Officer, from 2004 through 2006, and Vice President, Finance and Business Administration, from 2002 to 2004. From 2001 to 2002, Mr. Koehler was Vice President, Finance and Chief Financial Officer, of Vion Pharmaceuticals, Inc. Prior to his position at Vion, Mr. Koehler served in a number of senior finance positions at Knoll Pharmaceuticals, Inc. and Knoll AG between 1995 and 2001. From 1977 to 1993, he held positions in finance and accounting with the American Hospital Supply Corporation, then with Baxter International, Inc. after the two companies merged in 1985. Mr. Koehler began his career with Arthur Andersen LLP in Chicago from 1973 to 1977. Mr. Koehler holds a B.A. from Duke University and an MBA from the Kellogg Graduate School of Management, Northwestern University. We believe Mr. Koehler’s qualifications to serve on the Board of Directors include his many years of experience in the pharmaceutical industry, including his senior leadership positions at several pharmaceutical companies, as well as his extensive financial experience.

William S. Marth – Director

William S. Marth, age 66, has served as a member of our Board of Directors since February 2021. Mr. Marth serves as the Managing Partner of North Ocean Ventures, LLC, a consulting firm that helps pharmaceutical businesses realize their full potential. From 2018 to 2010, Mr. Marth served as the President and Chief Executive Officer of North America and Europe for Avet Pharma Holdings Inc., a wholly owned subsidiary of Emcure Pharmaceuticals Ltd. Mr. Marth served as President and Chief Executive Officer of Albany Molecular Research Inc. from January 2014 until January 2018. Mr. Marth served as a Director of Albany Molecular Research Inc. and as chairman of its board of directors from June to December 2013. Prior to this, Mr. Marth served in various senior leadership roles at Teva Pharmaceutical Industries Ltd., including President and Chief Executive Officer of Teva Pharmaceuticals – Americas, as well as CEO of Teva North America and CEO of Teva USA. In addition, he was a member of Teva’s global executive management team from 2007 to 2012. Mr. Marth has served and continues to serve on a number of private and charitable Boards. Mr. Marth earned his Bachelor of Science in Pharmacy from the University of Illinois and his M.B.A. from the Keller Graduate School of Management, DeVry University. We believe Mr. Marth’s qualifications to serve on the Board of Directors include his many years of experience in the generic pharmaceutical and contract manufacturing industries.

R. Carter Pate – Director

R. Carter Pate, age 66, has served as a member of our Board of Directors since February 2021. Mr. Pate is the founder and Chief Executive Officer of Carter Pate, LLC, a Family Private Equity Investment Company, and has served as a board member to public and private boards of directors since 2014. He is the former Chief Executive Officer of Providence Service Corp DBA LogistiCare, the largest non-emergency medical logistics company for Medicare and Medicaid. Mr. Pate currently serves on the Board of Optioncare Health and was the Chairman of the Board of its predecessor, BioScrip Inc. He also serves as a member of the Board, the Chairman of its Compensation Committee, and a member of the Audit Committee for Advanced Emissions Solutions. Mr. Pate served as a member of the board of directors of Red Lion Hotels Corporation from May 2019 until March 2021. Prior to these roles, Mr. Pate had a career with PricewaterhouseCoopers spanning nearly two decades, including his service as a Global/United States Managing Partner of U.S. Advisory and later the Health Care practice leader. He is a co-author of The Phoenix Effect: Nine Revitalizing Strategies No Company Can Do Without, originally published in 2002 and translated into five languages. Mr. Pate holds certifications as a Certified Public Accountant and Certified Forensic Public

Accountant. Mr. Pate obtained his undergraduate degree in Accounting from Greensboro College and a Masters in Accounting and Information Management from the University of Texas at Dallas. We believe Mr. Pate’s qualifications to serve on the Board of Directors include his extensive financial experience and senior leadership roles with Pricewaterhouse Coopers, and service as a member of both public and private boards.

Thomas J. Sabatino, Jr. – Director

Thomas J. Sabatino, Jr., age 62, has served as a member of our Board of Directors since September 2017. Since February 15, 2020, Mr. Sabatino has served as Executive Vice President, General Counsel and Corporate Secretary of Tenneco, Inc., a designer, manufacturer and marketer of automotive products for original equipment and aftermarket customers. From April 2016 to December 2018, Mr. Sabatino served as Executive Vice President and General Counsel of Aetna Inc. with worldwide responsibility for leading its legal operations, including formulating corporate legal policy. Prior to joining Aetna, Mr. Sabatino worked for Hertz Global Holdings, Inc., where he served as Senior Executive Vice President, Chief Administrative Officer and General Counsel. He joined Hertz in 2015 after serving as Executive Vice President, Global Legal and Chief Administrative Officer of Walgreens Boots Alliance. Previously, in 2010, Mr. Sabatino was Executive Vice President and General Counsel of UAL Corporation and United Airlines, Inc., and was Executive Vice President and General Counsel of Schering-Plough Corporation from 2004 through 2009. He also has held General Counsel positions at Baxter International and American Medical International. Mr. Sabatino has received numerous awards from his peers, including Inside Counsel’s Transformative Leader Award (2012), the National Bar Association Gertrude E. Rush Award (2013) and the Equal Justice Works Scales of Justice Award (2014). He is Co-Chair of the Board of Directors of the Humane Society of the United States. He serves on the Board of Overseers for the University of Pennsylvania Law School and the Board of Directors of the International Institute for Conflict Prevention and Resolution. Mr. Sabatino earned his law degree from the University of Pennsylvania and his undergraduate degree from Wesleyan University in Connecticut. We believe Mr. Sabatino’s qualifications to serve on the Board of Directors include his many years of experience in the legal profession and his senior leadership positions of several healthcare companies.

Committees of the Board of Directors and Meetings

Meeting Attendance. During the fiscal year ended December 31, 2020, there were 31 meetings of our Board of Directors, and the various committees of the Board of Directors met a total of 14 times. No director attended fewer than 75% of the total number of meetings of the Board and of committees of the Board on which he or she served during fiscal 2020. The Board of Directors has adopted a policy under which each member of the Board of Directors is strongly encouraged to attend each annual meeting of our stockholders. All of our directors attended our annual meeting of stockholders held in 2020.

Audit Committee. Our Audit Committee met ten times during fiscal 2020. This committee currently has five members: Steven Koehler (Chairman), Carole S. Ben-Maimon, M.D., John Celentano, R. Carter Pate, and Thomas J. Sabatino, Jr. Our Audit Committee’s role and responsibilities are set forth in the Audit Committee’s written charter and include the authority to retain and terminate the services of our independent registered public accounting firm. In addition, the Audit Committee reviews annual financial statements, considers matters relating to accounting policy and internal controls, and reviews the scope of annual audits. All members of the Audit Committee satisfy the current independence standards promulgated by the SEC and by the Nasdaq Listing Rules, as such standards apply specifically to members of audit committees. The Board of Directors has determined that Mr. Koehler is an “audit committee financial expert,” as the SEC has defined that term in Item 407 of Regulation S-K. A copy of the Audit Committee’s written charter is publicly available on our website at www.teligent.com.

Organization and Compensation Committee. Our Organization and Compensation Committee met three times during fiscal 2020. This committee currently has four members: Thomas J. Sabatino, Jr. (Chairman), John Celentano, Bhaskar Chaudhuri, and William S. Marth. Our Organization and Compensation Committee’s role and responsibilities are set forth in the Organization and Compensation Committee’s written charter, and includes reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board of Directors are carried out and that such policies, practices and procedures contribute to our success. Our Organization and Compensation Committee also administers our 2016 Equity Incentive Plan, as amended (the “2016 Plan”) and will administer the 2021 Omnibus Incentive Plan if approved by our stockholders at the next annual meeting of stockholders. The Organization and Compensation Committee is responsible for determining the compensation of our chief executive officer, and conducts its decision-making process with respect to that issue without the chief executive officer present. All members of the Organization and Compensation Committee qualify as independent under the Nasdaq Listing Rules.

The Organization and Compensation Committee did not utilize the services of an independent compensation consultant in fiscal 2020. On January 18, 2021, after a through selection process, the Organization and Compensation Committee engaged Willis Towers Watson to serve as the Committee’s compensation advisor, which is discussed in more detail below.

The Organization and Compensation Committee reviews our compensation programs, analyzes market data, and evaluates our compensation programs, including measuring the competitiveness of our practices, against those of our peers. The Organization and Compensation Committee and, where applicable, the Chief Executive Officer review the performance of each named executive officer in light of the above factors and determine whether the named executive officer should receive any increase in base salary or receive a discretionary equity award based on such evaluation. During fiscal year 2020, the Organization and Compensation Committee determined the appropriate levels of compensation for our named executives by evaluating and weighting the achievement of certain corporate goals. The Organization and Compensation Committee also considered each executive’s weighted personal key performance indicator score, base salary, performance target, and bonus target. A copy of the Organization and Compensation Committee’s written charter is publicly available on our website at www.teligent.com.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee met once during fiscal 2020. This committee currently has four members: Bhaskar Chaudhuri (Chairman), Carole S. Ben-Maimon, M.D., William S. Marth and R. Carter Pate. The Nominating and Corporate Governance Committee’s role and responsibilities are set forth in the Nominating and Corporate Governance Committee’s written charter and include evaluating and making recommendations to the full Board of Directors as to the size and composition of the Board of Directors and its committees, evaluating and making recommendations as to potential candidates and evaluating current Board of Directors members’ performance. All members of the Nominating and Corporate Governance Committee qualify as independent under the Nasdaq Listing Rules.

In addition, under our current corporate governance policies, the Nominating and Corporate Governance Committee may consider candidates recommended by stockholders as well as from other sources, such as other directors or officers, third party search firms or other appropriate sources. For all potential candidates, the Nominating and Corporate Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate, possible conflicts of interest, diversity, the extent to which the candidate would fill a particular need on the Board of Directors, and concern for the long-term interests of our stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to propose a candidate for consideration as a nominee by the Nominating and Corporate Governance Committee under our corporate governance policies, it should submit such recommendation in writing to our Corporate Secretary at our corporate offices, 105 Lincoln Avenue, PO Box 687, Buena, New Jersey 08310.

The Nominating and Governance Committee considers issues of diversity among its members in identifying and considering nominees for director, and strives, where appropriate, to achieve a diverse balance of backgrounds, perspectives and experience on the board and its committees. The Nominating and Governance Committee seeks to develop a Board that reflects diverse backgrounds, experience, expertise, skill sets and viewpoints, actively seeking director candidates who bring diversity of age, gender, nationality, race, ethnicity, and sexual orientation. A copy of the Nominating and Governance Committee’s written charter is publicly available on our website at www.teligent.com.

Board of Directors Leadership Structure and Role in Risk Oversight

Our Board of Directors has seven independent members and one non-independent member who serves as our Chief Executive Officer. We believe that the number of independent, experienced directors that make up our Board of Directors, along with the independent oversight of the Board of Directors by the Non-Executive Chairman, benefits our Company and our stockholders. All of our independent directors have demonstrated leadership in other organizations and are familiar with board of director processes.

The Chairman of the Board of Directors presides at all meetings of the Board of Directors. The Chairman is appointed on an annual basis by a majority vote of the directors. Currently, the offices of Chairman of the Board of Directors and Chief Executive Officer are separated. We have no fixed policy with respect to the separation of the offices of the Chairman of the Board of Directors and Chief Executive Officer. Currently, two separate individuals serve in the positions of Chairman of our Board of Directors and Chief Executive Officer. We believe that our current leadership structure is optimal for the Company at this time.

Our management is principally responsible for defining the various risks facing the Company, formulating risk management policies and procedures, and managing our risk exposures on a day-to-day basis. The Board of Directors’ principal responsibility in this area is to ensure that sufficient resources, with appropriate technical and managerial skills, are provided throughout the Company to identify, assess and facilitate processes and practices to address material risk and to monitor our risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks. The involvement of the Board of Directors in reviewing our business

strategy is an integral aspect of the Board of Directors’ assessment of management’s tolerance for risk and also its determination of what constitutes an appropriate level of risk for the Company.

While the full Board of Directors has overall responsibility for risk oversight, the Board of Directors has elected to delegate oversight responsibility related to certain risk committees, which, in turn, report on the matters discussed at the committee level to the full Board of Directors. For instance, our Audit Committee focuses on the material risks facing the Company, including operational, market, credit, liquidity and legal risks. Additionally, our Organization and Compensation Committee is charged with reviewing and discussing with management whether our compensation arrangements are consistent with effective controls and sound risk management. Our management reports to the Board of Directors and Audit Committee on a regular basis regarding risk management.

Stockholder Communications to the Board of Directors

Stockholders who wish to send communications to our Board of Directors may do so by sending them c/o Teligent, Inc., Corporate Secretary, 105 Lincoln Avenue, PO Box 687, Buena, New Jersey 08310. Such communications may be addressed either to specified individual directors or the entire Board of Directors. The Corporate Secretary will have the discretion to screen and not forward to directors communications that the Corporate Secretary determines are communications unrelated to our business or governance, commercial solicitations, offensive, obscene, or otherwise inappropriate. The Corporate Secretary will, however, compile all stockholder communications that are not forwarded and such communications will be available to any director.

Code of Conduct and Ethics

We have adopted a code of conduct and ethics, the Standards of Business Conduct that applies to all of our employees, including our chief executive officer and chief financial and accounting officers. The text of the Standards of Business Conduct is posted on our website at www.teligent.com. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors, principal executive and financial officers will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted by the rules of Nasdaq.

Report of the Audit Committee

The Audit Committee of the Board of Directors has furnished the following report:

The Audit Committee assists the Board of Directors in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements, and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by the Board of Directors, which is available on our website at www.teligent.com. This committee reviews and reassesses our charter annually and recommends any changes to the Board of Directors for approval. The Audit Committee is responsible for overseeing our overall financial reporting process, and for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. In fulfilling its responsibilities for the financial statements for the fiscal year ended December 31, 2020, the Audit Committee took the following actions:

• Reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2020 with management and Deloitte & Touche LLP, our independent registered public accounting firm;

• Discussed with Deloitte & Touche LLP the matters required to be discussed in accordance with Auditing Standard No. 1301 - Communications with Audit Committees; and

• Received written disclosures and the letter from Deloitte & Touche LLP regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLP’s communications with the Audit Committee and further discussed with Deloitte & Touche LLP their independence. The Audit Committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.

Based on the Audit Committee’s review of the audited financial statements and discussions with management and Deloitte & Touche LLP, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the SEC.

Members of the Teligent, Inc. Audit Committee

Steven Koehler (Chair)

Carole S. Ben-Maimon, M.D.

John Celentano

R. Carter Pate

Thomas J. Sabatino, Jr.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires directors and executive officers, and persons who own more than 10% of the Company’s common stock, to report to the SEC their initial ownership of the Company’s common stock and any subsequent changes in that ownership. Specific due dates for these reports have been established by the SEC, and we are required to disclose in this Annual Report on Form 10-K any late filings or failures to file.

Based solely on our review of electronic filings with the SEC of such reports and written representations from our directors and executive officers, we believe that, during the 2020 fiscal year, Timothy B. Sawyer, our Chief Executive Officer, had one late Form 3 filing and one late Form 4 filing (reporting a stock option award), and Keith James, our Principal Accounting Officer, had one late Form 3 filing. These filings were delayed due to the technical difficulties in obtaining the appropriate EDGAR codes for both Mr. Sawyer and Mr. James in light of the COVID-19 challenges relating to both the Company’s and the SEC’s staff working remotely.

In addition, James C. Gale, a former director, and certain affiliated funds, including Life Sciences Opportunities Fund (Institutional) II, L.P., Life Sciences Opportunities Fund II, L.P., and Signet Healthcare Partners, LLC, who collectively owned more than 10% of the Company’s common stock, had four late Form 4 filings reporting sales of common stock.

Item 11. EXECUTIVE COMPENSATION

~~The~~ ~~response~~Summary ~~to this item is incorporated by reference from the discussion responsive thereto under the captions “Executive Officer and Director~~ Compensation ~~and “Management and Corporate Governance in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders.~~Table

The following table shows the total compensation paid or accrued during the fiscal years ended December 31, 2020 and 2019 to our current Chief Executive Officer and Chief Legal Officer, and our former Chief Executive Officer and Chief Financial Officer.


Name and Principal Position	Year	Salary ($)	Bonus ($)		Stock Awards ($) (1)	Option Awards ($) (1)	Nonequity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Timothy B. Sawyer	2020	407,999	135,000	(3)	0	312,230	510,000	(4)	26,140	(5)	1,391,369
President and Chief Executive Officer (2)	2019	—	—		—	—	—		—		—
Philip K. Yachmetz,	2020	149,231	60,000	(7)	55,002	71,581	135,000	(8)	6,465	(9)	477,279
Chief Legal Officer and Corporate Secretary (6)	2019	—	—		—	—	—		—		—
Jason Grenfell-Gardner	2020	83,282	—		—	—	—		326,515	(11)	409,797
Former President and Chief Executive Officer (10)	2019	466,356	82,000		—	321,263	—		27,720	(12)	897,339
Damian Finio	2020	295,460	74,588	(14)	—	113,897	—		19,758	(15)	503,703
Former Chief Financial Officer (13)	2019	329,750	70,858		—	127,358	—		23,856	(16)	551,822

(1) These amounts represent the aggregate grant date fair value for stock and option awards for fiscal years 2020 and 2019, respectively, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 10 to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2020.

(2) Effective February 4, 2020, Mr. Sawyer was appointed as President and Chief Executive Officer.

(3) Bonus consists of $135,000 cash retention award conditioned upon Mr. Sawyer remaining employed through December 31, 2020, and the satisfaction of certain performance criteria.

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