42 added · 47 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
On April 8, 2025, we filed the Mayne Lawsuit seeking damages for breach of contract, breach of implied covenant of good faith and fair dealing, fraudulent inducement and unjust enrichment.
On May 30, 2025, Mayne Pharma filed the Mayne Countersuit against us, seeking damages for breach of contract, fraudulent inducement and indemnification.
For example, the current U.S. administration has taken action, and may take action in the future, with respect to major changes to trade policies, such as the imposition of tariffs on imported products and the withdrawal from or renegotiation of certain trade agreements.
Further. the IRA permits the Secretary of the Department of Health and Human Services (“HHS”) to implement certain of these provisions through guidance, as opposed to regulation, for the initial years and significant aspects of the law remain subject to ongoing regulatory implementation and legal challenges.
As of December 31, 2025, the litigation remains ongoing and has progressed to claim construction.
Federal and state laws have put considerable pressure on the pricing of pharmaceutical products, and additional reforms may further constrain pricing, reimbursement and access. 20 In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap, and establishes monetary penalties for manufacturers that do not comply.
The IRA also requires manufacturers to pay rebates to Medicare if the prices of certain drugs outpace inflation (first due in 2023), and it replaces the Medicare Part D coverage gap discount program with a new discounting program (beginning in 2025).
Additionally, in April 2025, an executive order was signed directing the Secretary of HHS to take appropriate steps to, among other things, modify certain provisions of the Medicare Drug Price Negotiation Program, and develop and implement a payment model to reduce the price of high-cost prescription drugs and biological products covered by Medicare.
In May 2025, a further executive order was signed directing the Secretary of HHS to propose rules that impose “most-favored-nation” pricing and to take other measures to reduce the cost of prescription drugs.
In August 2024 and February 2025, Mayne Pharma provided additional information relating to the net working capital allowance for returns that we believe also differs significantly from our estimates.
In addition, under the Mayne License Agreement, the royalty rate is subject to a 2% reduction upon the earlier to occur of (i) the expiration or revocation of the last valid claim covering a Licensed Product, and (ii) a generic product launch (a “LOE”).
No longer disclosed
Our ability to continue as a going concern may depend on our ability to obtain additional capital as well as our ability to minimize operational expenses, including any potential net working capital adjustments relating to the Mayne Transaction.
If so, the use of our NOL carryforwards, or a portion thereof, against our future taxable income may be subject to an annual limitation under Section 382. 25 In 2017, the U.S. federal government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”).
The 2017 Tax Act makes broad and complex changes to the U.S. federal tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 34 percent to 21 percent and imposing new restrictions on the use of NOL carryforwards.
The CARES Act limits the NOL deduction in taxable years beginning in 2021 to the lesser of the NOL carryforwards or 80% of the taxpayer’s taxable income (after considering the deduction for NOL arising in tax years beginning before January 1, 2018), which may restrict our ability to offset future taxable income with NOL carryforwards and increase our future federal income taxes otherwise payable.
Management assessed the valuation allowance analyses with respect to our NOL carryforwards as affected by various aspects of the 2017 Tax Act and determined that a full valuation allowance continues to be appropriate.
The CARES Act includes several significant business tax provisions that, among other things, includes further statutory amendments to the rules governing NOL carryforwards, as amended by the 2017 Tax Act.
On February 20, 2025, Mayne Pharma Group announced that it entered into a scheme implementation deed with Cosette under which Cosette agreed to acquire all the outstanding shares of Mayne Pharma Group.
We believe that corrective actions to address the compliance issues identified in the referenced Forms 483 have been implemented by the CMOs and that the CMOs continue to have the right to manufacture under current regulations. 14 If the manufacturers of our products cannot successfully manufacture material that conforms to specifications and the strict regulatory requirements of the FDA and any applicable foreign regulatory authority, regulatory submissions related to our products may be delayed or disapproved, and our marketed products may be affected.
If an ownership change has occurred, or were to occur, utilization of our NOL carryforwards would be subject to an annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change by the applicable long-term tax-exempt rate.
Additionally, to address the impact of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted into law in March 2020.
We cannot predict the outcome of the acquisition or how Mayne Pharma Group’s shareholders will vote on the parties’ proposed acquisition.
Section 382 of the Internal Revenue Code of 1986, as amended, imposes limitations on a corporation’s ability to utilize NOL carryforwards if it experiences an ownership change as defined in Section 382.