Harrow第二季收入升11%惟虧損擴大 收購Viatris乾眼症藥物全球權利

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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐ 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: 001-35814
Harrow, Inc.
(Exact name of registrant as specified in its charter)

Delaware
45-0567010

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

1A Burton Hills Blvd., Suite 200
Nashville, Tennessee
37215

(Address of principal executive offices)(Zip code)

(615) 733-4730
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name on exchange on which registered
Common Stock, $0.001 par value per share
HROW
The Nasdaq Stock Market LLC

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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 6, 2026, there were 37,487,850 shares of the registrant’s common stock, $0.001 par value, outstanding.

Table of Contents

HARROW, INC.
Table of Contents

Page
Part I
FINANCIAL INFORMATION
2

Item 1.
Financial Statements (unaudited)
2

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
17

Item 3.
Quantitative and Qualitative Disclosures About Market Risk
22

Item 4.
Controls and Procedures
23

Part II
OTHER INFORMATION
24

Item 1.
Legal Proceedings
24

Item 1A.
Risk Factors
24

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
25

Item 3.
Defaults Upon Senior Securities
25

Item 4.
Mine Safety Disclosures
25

Item 5.
Other Information
25

Item 6.
Exhibits
25

Signatures
27

1

Table of Contents

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements

HARROW, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,
2026December 31,
2025
ASSETS
Current assets
Cash and cash equivalents$83,889,000 $72,927,000 
Accounts receivable, net118,559,000 110,895,000 
Inventories16,910,000 13,523,000 
Prepaid expenses and other current assets9,949,000 14,405,000 
Total current assets229,307,000 211,750,000 
Property, plant and equipment, net2,960,000 3,260,000 
Capitalized software costs, net1,253,000 1,183,000 
Operating lease right-of-use assets, net7,394,000 7,783,000 
Intangible assets, net175,570,000 175,174,000 
Goodwill332,000 332,000 
TOTAL ASSETS$416,816,000 $399,482,000 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses$34,062,000 $41,959,000 
Accrued rebates and copay assistance55,481,000 42,236,000 
Accrued payroll and related liabilities11,578,000 10,432,000 
Deferred revenue and customer deposits106,000 788,000 
Current portion of operating lease obligations944,000 887,000 
Total current liabilities102,171,000 96,302,000 
Operating lease obligations, net of current portion7,421,000 7,905,000 
Notes payable, net292,379,000 243,184,000 
TOTAL LIABILITIES401,971,000 347,391,000 
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 50,000,000 shares authorized, 37,484,233 and 37,229,159 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively
37,000 37,000 
Additional paid-in capital216,559,000 208,933,000 
Accumulated deficit(201,396,000)(156,524,000)
TOTAL HARROW, INC. STOCKHOLDERS’ EQUITY15,200,000 52,446,000 
Noncontrolling interests(355,000)(355,000)
TOTAL STOCKHOLDERS’ EQUITY14,845,000 52,091,000 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$416,816,000 $399,482,000 

The accompanying notes are an integral part of these condensed consolidated financial statements.
2

Table of Contents

HARROW, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended June 30,For the Six Months Ended June 30,
2026202520262025
Revenues:
Product sales, net$70,571,000 $63,657,000 $114,701,000 $111,402,000 
Other revenues90,000 85,000 163,000 171,000 
Total revenues70,661,000 63,742,000 114,864,000 111,573,000 
Cost of sales(20,298,000)(16,230,000)(37,456,000)(31,754,000)
Gross profit50,363,000 47,512,000 77,408,000 79,819,000 
Operating expenses:
Selling, general and administrative53,298,000 33,235,000 96,528,000 73,748,000 
Research and development8,072,000 2,868,000 13,967,000 5,894,000 
Total operating expenses61,370,000 36,103,000 110,495,000 79,642,000 
(Loss) income from operations(11,007,000)11,409,000 (33,087,000)177,000 
Interest expense, net(6,263,000)(6,408,000)(11,760,000)(12,956,000)
Other (expense) income, net— (6,000)— (6,000)
(Loss) income before income taxes(17,270,000)4,995,000 (44,847,000)(12,785,000)
Income tax expense— — (25,000)— 
Net (loss) income$(17,270,000)$4,995,000 $(44,872,000)$(12,785,000)
Basic net (loss) income per share of common stock$(0.46)$0.14 $(1.20)$(0.35)
Diluted net (loss) income per share of common stock$(0.46)$0.13 $(1.20)$(0.35)
Weighted average number of shares of common stock outstanding, basic37,350,401 36,790,306 37,291,190 36,304,787 
Weighted average number of shares of common stock outstanding, diluted37,350,40138,853,85537,291,19036,304,787

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Table of Contents

HARROW, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three and Six Months Ended June 30, 2026 and 2025

Common StockAdditional
Paid-in
CapitalAccumulated 
Deficit Total 
Harrow, Inc. 
Stockholders’ 
Equity Total 
Noncontrolling 
Interest 
Equity Total 
Stockholders’ 
Equity 
SharesPar
Value
Balance at January 1, 202535,622,214 $35,000 $221,002,000 $(151,385,000)$69,652,000 $(355,000)$69,297,000 
Issuance of common stock in connection with:
Exercise of employee stock-based options10,618—125,000—125,000—125,000
Vesting of RSUs1,634,0092,000(2,000)————
Shares withheld related to net share settlement of equity awards(552,162)(1,000)(12,768,000)—(12,769,000)—(12,769,000)
Stock-based compensation expense——5,431,000—5,431,000—5,431,000
Net loss———(12,785,000)(12,785,000)—(12,785,000)
Balance at June 30, 202536,714,679 $36,000 $213,788,000 $(164,170,000)$49,654,000 $(355,000)$49,299,000 

Common StockAdditional
Paid-in
CapitalAccumulated 
DeficitTotal 
Harrow, Inc. 
Stockholders’ 
EquityTotal 
Noncontrolling 
Interest 
EquityTotal 
Stockholders’ 
Equity
SharesPar
Value
Balance at January 1, 202637,229,159 $37,000 $208,933,000 $(156,524,000)$52,446,000 $(355,000)$52,091,000 
Issuance of common stock in connection with:
Exercise of employee stock-based options265,094 — 1,102,000 — 1,102,000 — 1,102,000 
Vesting of RSUs20,500 — — — — — — 
Shares withheld related to net share settlement of equity awards(30,520)— (1,101,000)— (1,101,000)— (1,101,000)
Stock-based compensation expense— — 7,625,000 — 7,625,000 — 7,625,000 
Net loss— — — (44,872,000)(44,872,000)— (44,872,000)
Balance at June 30, 202637,484,233 $37,000 $216,559,000 $(201,396,000)$15,200,000 $(355,000)$14,845,000 

Common StockAdditional
Paid-in
CapitalAccumulated 
DeficitTotal 
Harrow, Inc. 
Stockholders’ 
EquityTotal 
Noncontrolling 
Interest 
EquityTotal 
Stockholders’ 
Equity
SharesPar
Value
Balance at April 1, 202535,654,171 $35,000 $225,581,000 $(169,165,000)$56,451,000 $(355,000)$56,096,000 
Issuance of common stock in connection with:
Exercise of employee stock-based options7,875 — 102,000 — 102,000 — 102,000 
Vesting of RSUs1,604,795 2,000 (2,000)— — — — 
Shares withheld related to net share settlement of equity awards(552,162)(1,000)(12,768,000)— (12,769,000)— (12,769,000)
Stock-based compensation expense— — 875,000 — 875,000 — 875,000 
Net income— — — 4,995,000 4,995,000 — 4,995,000 
Balance at June 30, 202536,714,679 $36,000 $213,788,000 $(164,170,000)$49,654,000 $(355,000)$49,299,000 

Common StockAdditional
Paid-in
CapitalAccumulated 
DeficitTotal 
Harrow, Inc. 
Stockholders’ 
EquityTotal 
Noncontrolling 
Interest 
EquityTotal 
Stockholders’ 
Equity
SharesPar
Value
Balance at April 1, 202637,269,400 $37,000 $212,795,000 $(184,126,000)$28,706,000 $(355,000)$28,351,000 
Issuance of common stock in connection with:
Exercise of employee stock-based options224,853 — 1,077,000 — 1,077,000 — 1,077,000 
Vesting of RSUs20,500 — — — — — — 
Shares withheld related to net share settlement of equity awards(30,520)— (1,101,000)— (1,101,000)— (1,101,000)
Stock-based compensation expense— — 3,788,000 — 3,788,000 — 3,788,000 
Net loss— — — (17,270,000)(17,270,000)— (17,270,000)
Balance at June 30, 202637,484,233 $37,000 $216,559,000 $(201,396,000)$15,200,000 $(355,000)$14,845,000 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HARROW, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended
June 30,
20262025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(44,872,000)$(12,785,000)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization of property, plant and equipment and software development costs915,000961,000
Amortization of intangible assets10,656,0008,452,000
Noncash lease expense389,000399,000
(Recovery of) Provision for credit losses(295,000)340,000
Amortization of debt issuance costs, discount and premium, net851,0002,564,000
Stock-based compensation7,625,0005,431,000
Changes in assets and liabilities:
Accounts receivable(7,369,000)37,211,000
Inventories(3,387,000)(850,000)
Prepaid expenses and other current assets4,355,0003,776,000
Accounts payable, accrued expenses, accrued rebates and copay assistance11,921,000(24,009,000)
Accrued payroll and related liabilities1,146,000(2,672,000)
Deferred revenue and customer deposits(682,000)47,000
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES(18,747,000)18,865,000
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in patent and trademark assets(52,000)(169,000)
Purchase of product rights(18,000,000)—
Purchases of property, plant and equipment(685,000)(336,000)
NET CASH USED IN INVESTING ACTIVITIES(18,737,000)(505,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from 8.625% notes payable, net of commissions49,000,000—
Payment of debt issuance costs(555,000)—
Proceeds from exercise of stock options836,000125,000
Payment of payroll taxes upon exercise and issuance of equity awards(835,000)(12,769,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES48,446,000(12,644,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS10,962,0005,716,000
CASH AND CASH EQUIVALENTS, beginning of period72,927,00047,247,000
CASH AND CASH EQUIVALENTS, end of period$83,889,000 $52,963,000 
  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes$2,275,000 $38,000 
Cash paid for interest$10,960,000 $12,180,000 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Unpaid acquisitions of property, plant and equipment$— $130,000 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HARROW, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Six Months Ended June 30, 2026 and 2025

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Company and Background
Harrow, Inc. (together with its consolidated subsidiaries, unless the context indicates or otherwise requires, the “Company” or “Harrow”) is a leading eyecare pharmaceutical company engaged in the discovery, development, and commercialization of innovative ophthalmic pharmaceutical products for the U.S. market. Harrow helps U.S. eyecare professionals preserve the gift of sight by making its comprehensive portfolio of prescription and non-prescription pharmaceutical products accessible and affordable to millions of Americans each year. The Company owns commercial rights to one of the largest portfolios of branded ophthalmic pharmaceutical products in North America, all of which are marketed under its Harrow name. The Company also owns and operates ImprimisRx, one of the nation’s leading ophthalmology-focused pharmaceutical-compounding businesses.
Basis of Presentation
The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other period. For further information, refer to the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries.
Harrow consolidates entities in which it has a controlling financial interest. The Company assesses control under the variable interest entity (“VIE”) model to determine whether the Company is the primary beneficiary of that entity. The Company consolidates (i) entities in which it holds and/or controls, directly or indirectly, more than 50% of the voting rights, and (ii) VIEs for which the Company is deemed to be the primary beneficiary. All material intercompany accounts and transactions have been eliminated in consolidation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following represents an update for the three and six months ended June 30, 2026 to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, allowance for credit losses, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, renewal periods and discount rates for leases, realizability of inventories, recoverability of investments, realizability of deferred tax assets, recoverability of long-lived assets and goodwill, valuations and purchase price allocations related to business combinations and asset acquisitions, fair value of loans payable, and valuation of stock-based transactions with employees and non-employees. Actual results could differ from those estimates.
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Risks, Uncertainties and Liquidity
The Company is subject to certain regulatory standards, approvals, guidelines and inspections which could impact the Company’s ability to make, dispense, and sell certain products. If the Company was required to cease compounding and selling certain products because of regulatory guidelines or inspections, this may have a material impact on the Company’s financial condition, liquidity and results of operations.
Credit Losses
The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables. Management considers historical collection rates, the current financial status of the Company’s customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, management believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments, including its trade receivables.
To determine the provision for credit losses for accounts receivable, the Company has disaggregated its accounts receivable by class of customer at the business component level, as management determined that the risk profile of the Company’s customers is consistent based on the type and industry in which they operate, mainly in the pharmaceuticals industry. Each business component is analyzed for estimated credit losses individually. In doing so, the Company establishes a historical loss matrix, based on the previous collections of accounts receivable by the age of such receivables, and evaluates the current and forecasted financial position of its customers, as available. Further, the Company considers macroeconomic factors and the status of the pharmaceuticals industry to estimate if there are current expected credit losses within its trade receivables based on the trends of the Company’s expectation of the future status of such economic and industry-specific factors. Also, specific allowance amounts are established based on review of outstanding invoices to record the appropriate provision for customers that have a higher probability of default.
The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected at June 30, 2026:

Balance, January 1, 2026$884,000 
Recovery of expected credit losses(295,000)
Write-offs, net of recoveries(76,000)
Balance, June 30, 2026$513,000 

Fair Value Measurements
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels:
•Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
•Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, Level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.
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The Company’s 2030 Notes (as defined in Note 8) are carried at face value, including the unamortized premium, less unamortized debt issuance costs on the condensed consolidated balance sheets and the Company presents fair value for disclosure purposes only. The 2030 Notes are classified as Level 1 instruments as the fair value is determined using quoted market prices in active markets for the same securities.
The following table presents the estimated fair values and the carrying values:

June 30, 2026December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
2030 Notes$292,379,000 $306,000,000 $243,184,000 $262,500,000 

The Company’s other financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, accrued payroll and related liabilities, deferred revenue and customer deposits and operating lease liabilities. The carrying amount of these financial instruments, except for operating lease liabilities, approximates fair value due to the short-term maturity of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the operating lease liabilities approximates their respective fair values.
Basic and Diluted Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and warrants, outstanding during the period. Common equivalent shares (using the treasury stock or “if converted” method) from stock options, unvested RSUs, and unvested PSUs were 329,553 and 288,659 for the three and six months ended June 30, 2026, respectively, and 2,816,409 for the six months ended June 30, 2025, and are excluded in the calculation of diluted net loss per common share for the periods presented, because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but for which the issuance and delivery of the shares are deferred until the director ceases providing services to the Company. The number of shares underlying vested RSUs at June 30, 2026 and 2025 was 243,802 and 212,452, respectively.
The following table reconciles the number of weighted-average shares outstanding used to calculate diluted earnings per share:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Weighted-average number of shares outstanding, basic37,350,401 36,790,306 37,291,190 36,304,787 
Dilutive common equivalents— 2,063,549 — — 
Weighted average number of shares outstanding, diluted37,350,401 38,853,855 37,291,190 36,304,787 

Accounting Guidance Issued but Not Adopted at June 30, 2026
In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU modifies the disclosure or presentation requirements of a variety of topics in the codification by aligning them with the SEC’s regulations. The amendments to the various topics should be applied prospectively, and the effective date for the Company for each amendment will be determined based on the effective date of the SEC’s removal of the related disclosure from Regulation S-X or Regulation S-K. If the SEC has not removed the applicable requirement by June 30, 2027, then the related amendment in ASU 2023-06 will be removed from the codification and will not become effective. Early adoption of this ASU is prohibited. The Company does not expect the amendments in this ASU to have a material impact on the disclosures or presentation in its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, to improve the disclosures by a public business entity about the types of expenses in 
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commonly presented expense captions. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Except for expanded footnote disclosure, the Company does not expect the adoption of ASU 2024-03 will have a material effect on its consolidated financial statements.

NOTE 3. REVENUES
The following table summarizes activity and ending balances of the Company’s variable consideration provisions in the consolidated financial statements for the six months ended June 30, 2026 and 2025:

Accruals for Chargebacks, Returns, and Other Allowances 
ChargebacksRebatesReturnsAdministrative 
Fees and Other
Rebates Co-Pay Assistance Prompt Pay
Discounts Total 
Balance at December 31, 2024(1)$960,000 $12,360,000 $1,449,000 $32,873,000 $9,612,000 $2,377,000 $59,631,000 
Accruals/adjustments11,163,000 11,128,000 4,615,000 40,093,000 30,771,000 2,346,000 100,116,000 
Credits taken against reserve(7,706,000)(7,696,000)(4,828,000)(53,480,000)(37,193,000)(3,185,000)(114,088,000)
Balance at June 30, 2025(1)$4,417,000 $15,792,000 $1,236,000 $19,486,000 $3,190,000 $1,538,000 $45,659,000 

Balance at December 31, 2025(1)$11,027,000 $28,217,000 $8,018,000 $16,540,000 $2,085,000 $2,494,000 $68,381,000 
Accruals/adjustments9,032,000 20,934,000 2,177,000 70,944,000 10,870,000 1,698,000 115,655,000 
Credits taken against reserve(12,036,000)(15,468,000)(5,834,000)(63,632,000)(12,743,000)(3,258,000)(112,971,000)
Balance at June 30, 2026(1)$8,023,000 $33,683,000 $4,361,000 $23,852,000 $212,000 $934,000 $71,065,000 

________________
(1)Chargebacks and other allowances are included as an offset to accounts receivable in the condensed consolidated balance sheets. Administrative Fees and Other Rebates, Prompt Pay Discounts and Returns are included as a reduction to accounts receivable, net of chargebacks and other allowances, or accrued expenses and other in the condensed consolidated balance sheets. Government rebates are included in accrued rebates and copay assistance in the condensed consolidated balance sheets.
Deferred revenue and customer deposits at June 30, 2026 and December 31, 2025 were $106,000 and $788,000, respectively. All deferred revenue and customer deposit amounts at December 31, 2025 were recognized as revenue during the six months ended June 30, 2026.

NOTE 4. INVENTORIES
Inventories are comprised of finished compounded formulations, over-the-counter and prescription retail pharmacy products, branded pharmaceutical products, including those held at the Company’s 3PL partner, related laboratory supplies and active pharmaceutical ingredients. The composition of inventories as of June 30, 2026 and December 31, 2025 was as follows:

June 30, 2026December 31, 2025
Raw materials$6,297,000 $6,958,000 
Work in progress1,219,000 1,036,000 
Finished goods9,394,000 5,529,000 
Total inventories$16,910,000 $13,523,000 

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NOTE 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets at June 30, 2026 and December 31, 2025 consisted of the following:

June 30, 2026December 31, 2025
Prepaid insurance$403,000 $2,185,000 
Prepaid computer software licenses and related expenses1,200,000 598,000 
Prefunded co-pay assistance1,737,000 3,342,000 
Other prepaid expenses3,739,000 1,825,000 
Prescription Drug User Fee Act (“PDUFA”) program fees1,442,000 4,327,000 
Deposits and other current assets1,428,000 2,128,000 
Total prepaid expenses and other current assets$9,949,000 $14,405,000 

NOTE 6. INTANGIBLE ASSETS AND GOODWILL
The Company’s intangible assets at June 30, 2026 consisted of the following:

Weighted-average useful life
(in years)CostAccumulated
AmortizationNet
Carrying Value
Definite-lived Intangibles
Patents19$269,000 $(83,000)$186,000 
Licenses2050,000 (40,000)10,000 
Acquired product rights14225,481,000 (50,552,000)174,929,000 
Customer relationships7190,000 (155,000)35,000 
Trade name570,000 (4,000)66,000 
State pharmacy licenses258,000 (4,000)4,000 
Indefinite-lived Intangibles
TrademarksIndefinite340,000 — 340,000 
$226,408,000 $(50,838,000)$175,570,000 

Amortization expense for intangible assets for the three and six months ended June 30, 2026 and 2025 was as follows:

For the Three Months Ended June 30,For the Six Months Ended June 30,
2026202520262025
Patents$12,000 $3,000 $17,000 $6,000 
Acquired product rights5,512,000 4,220,000 10,633,000 8,440,000 
Customer relationships3,000 3,000 6,000 6,000 
$5,527,000 $4,226,000 $10,656,000 $8,452,000 

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Estimated future amortization expense for the Company’s intangible assets at June 30, 2026 was as follows:

Remainder of 2026$11,238,000 
202720,241,000 
202817,112,000 
202917,013,000 
203016,582,000 
Thereafter93,044,000 
$175,230,000 

In January 2026, the Company amended the Asset Purchase Agreement with Eyevance Pharmaceuticals, LLC and the License Agreement with Santen S.A.S. (collectively, the “Santen Agreements”), each a subsidiary of Santen Pharmaceuticals Co., Ltd. (collectively, “Santen”). Pursuant to the amendment, the parties agreed to a full and final settlement of all contingent milestone obligations related to specified manufacturing-related events for the Santen products in exchange for a one-time lump sum payment by the Company of $7,000,000. Following this payment, no further milestone payments will be due under the Santen Agreements. The Company capitalized this payment as an intangible asset within acquired product rights.
In February 2026, the Company made a one-time upfront payment of $4,000,000 to Samsung Bioepis Co., Ltd. (“Samsung”) upon the license effective date related to the development and commercialization agreement with Samsung entered into in July 2025. The milestone was capitalized as an intangible asset within acquired product rights.
In March 2026, the Company paid a commercial milestone payment of $7,000,000 related to the sales of VEVYE during 2025. The milestone payment was included in accounts payable and accrued expenses on the December 31, 2025 condensed consolidated balance sheet and was capitalized in acquired product rights.
There were no changes to the carrying value of the Company’s goodwill during the three and six months ended June 30, 2026 and 2025.

NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses at June 30, 2026 and December 31, 2025 consisted of the following:

June 30,
2026December 31,
2025
Accounts payable$26,265,000 $35,355,000 
Accrued interest7,691,000 6,498,000 
Other accrued expenses106,000 106,000 
Total accounts payable and accrued expenses$34,062,000 $41,959,000 

NOTE 8. DEBT
8.625% Senior Notes Due 2030
In March 2026, the Company entered into the First Supplemental Indenture to the Indenture dated September 12, 2025 pursuant to which the Company issued $50,000,000 aggregate principal amount of additional 8.625% Senior Notes due 2030 (the “New Notes”). The New Notes were issued at 100.25% of par value and resulted in net proceeds to the Company of $48,445,000 after deducting underwriting discounts, commissions and other offering expenses of $1,555,000. The New Notes, together with the 8.625% Senior Notes due 2030 issued in September 2025 (the “Existing Notes”) (together, the “2030 Notes”) are treated as a single series and have the same terms as the Existing Notes. The issuance costs and premium relating to the New Notes were deferred and will be recognized as interest expense using the effective-interest method (9.36%) over the remaining term of the debt.
Interest expense totaled $6,874,000 and $12,866,000 for the three and six months ended June 30, 2026, respectively, and included the amortization of debt issuance costs and premium of $400,000 and $851,000, respectively.
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A summary of the Company’s debt at June 30, 2026 and December 31, 2025 is as follows:

June 30,
2026December 31,
2025
8.625% Senior Notes due September 2030
$300,000,000 $250,000,000 
Less: Unamortized debt issuance costs, discount and premium, net(7,621,000)(6,816,000)
$292,379,000 $243,184,000 

At June 30, 2026, future minimum principal payments under the Company’s debt were as follows:

Remainder of 2026$— 
2027— 
2028— 
2029— 
2030300,000,000 
Total minimum principal payments300,000,000 
Less: unamortized debt issuance costs, discount and premium, net(7,621,000)
Notes payable, net$292,379,000 

NOTE 9. COMMITMENTS AND CONTINGENCIES
Legal
General and Other
In the ordinary course of business, the Company is involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See also Part II, Item 1A. Risk Factors. The Company describes legal proceedings and other matters that are, or were, significant or that it believes could become significant in this footnote.
The Company records accruals for loss contingencies to the extent that it concludes it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of a liability that has been accrued previously.
The Company’s legal proceedings involve various aspects of its business and a variety of claims, some of which present novel factual allegations and/or unique legal theories. Typically, a number of matters pending against the Company are at early stages of the legal process, which in complex proceedings of the sort the Company faces often extend for several years. While it is not possible to accurately predict or determine the eventual outcomes of matters that have not concluded, an adverse determination in one or more of these matters (whether discussed in this footnote or not) currently pending may have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. Legal costs incurred for loss contingencies are expensed as incurred.
Ocular Science, Inc. et. al.
In July 2021, ImprimisRx, LLC, a subsidiary of the Company, filed a lawsuit against Ocular Science, Inc. and OSRX, Inc. (together, “OSRX”) in the U.S. District Court for the Southern District of California, asserting claims for copyright infringement, trademark infringement, unfair competition and false advertising (