Annual Report for Fiscal Year Ending DECEMBER 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion should be read in conjunction with our financial statements and the related notes included in this report. This discussion contains forward-looking statements. Please see "Cautionary Note Regarding Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

Results of Operations

Comparison of Results of Operations for the fiscal years ended December 31, 2025 and 2024

During our fiscal year ended December 31, 2025, we generated revenues of $36,305,891, compared to revenues of $34,874,283 in 2024, an increase of approximately $1.4 million. The increase was the result of expansion of Nora Pharma sales efforts in the Provinces of Quebec, Ontario, Alberta, and British Columbia. The cost of sales in 2025 and 2024 for generating these revenues was $24,050,214 (66.2%) and $24,204,489 (69.4%), respectively. The 3.2% decrease in the cost of sales in 2025 was largely due to lower professional allowances incurred on the sale of products outside the Province of Quebec. In the Province of Quebec professional allowances are set by government regulations. We also had lower wholesalers' fees and discounts in 2025.

General and administrative ("G&A") expenses for our fiscal year ended December 31, 2025, were $18,482,706, compared to $16,481,915 during our fiscal year ended December 31, 2024, an increase of $2,000,791. The increase in the year ended December 31, 2025 is primarily attributable to a non-cash charge of $1,748,247 related to the impairment of intangible assets. In January 2026, we implemented initiatives to reduce our general and administrative expenses and better align our cost structure with the Company's objective of achieving profitability in the near term. Based on our current plans, we expect these initiatives to reduce expenses by approximately $2 million to $3 million in 2026. However, there can be no assurance that we will realize these anticipated reductions.

We had interest income of $280,901 in 2025, compared to interest income of $496,003 in 2024. The decrease was due to reduced interest rates and less cash on hand in 2025.

As a result of the foregoing, we incurred a net loss of $5,975,352 for the year ended December 31, 2025, compared to a net loss of $5,134,116 for the year ended December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $9,123,308.

During the fiscal years ended December 31, 2024 and 2025, we received aggregate proceeds of $6,478,624 in connection with warrant exercises.

On February 11, 2024, we redeemed certain warrants we issued on May 16, 2023, and April 28, 2022 for an aggregate purchase price of $3,139,651.

On February 15, 2024, we completed an underwritten public offering and in connection therewith, we issued an aggregate of 35,714 shares of common stock and received net proceeds of $8,522,411.

On January 3, 2025, we issued 127,443 shares of common stock upon the exercise of 127,443 Series B Warrants and received $355,298 in net proceeds.

On April 2, 2025, the Company issued 660,000 shares of common stock upon the exercise of 660,000 Series B Warrants and received $1,840,014 in net proceeds.

On April 3, 2025, the Company issued an aggregate of 1,188,404 shares of common stock in connection with a registered direct offering and received $1,828,596 in net proceeds.

On October 16, 2025, the Company issued 350,000 shares of common stock upon the exercise of 350,000 Series B Warrants and received net proceeds of $724,500.

Net cash used in operations was $5,331,073 in 2025, compared to $12,524,779 in 2024. The substantial decrease was due to more streamlined Nora Pharma operations and a significant decrease in the rate of inventory growth.

Cash flows used in investing activities were $836,306 during the year ended December 31, 2025, compared to $1,979,313 during our fiscal year ended December 31, 2024. The decrease of approximately $1.7 million was due to reduced acquisition of intangible assets and purchase of equipment for Nora Pharma's operations.

Net cash flows provided by financing activities were $4,748,408 in 2025, compared to $8,941,572 in 2024. The decrease was due to a smaller financing event in 2025 as well as the exercise of fewer warrants.

We believe our existing cash will be sufficient to fund our operations for the next 18 months. There is no assurance our estimates will be accurate. We have no committed sources of capital and we anticipate that we will need to raise additional capital in the future to expand our generic pharmaceutical operations. Additional capital may not be available on terms acceptable to us, or at all.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Leases

We follow the guidance in ASC 842 - Accounting for Leases, as amended, which requires us to evaluate the lease agreements we enter into to determine whether they represent operating or capital leases at the inception of the lease.

Our wholly owned subsidiary, Nora Pharma, currently occupies a 23,500 square foot facility located at 1565 Boulevard Lionel-Boulet, Varennes, Quebec, Canada, J3X 1P7 pursuant to a lease agreement that expires in January 2030, with an option to extend for 5 years. This site is composed of 18,500 square feet of warehouse space and 5,000 square feet of executive office space. The facility houses all administrative, marketing, quality control, regulatory affairs, and other operations personal, as well as a Health Canada licensed warehouse space. We pay monthly rent of $27,250 CAD (approximately $19,900 USD), including taxes. We treat this lease as an operating lease but account for liabilities and benefits resulting therefrom.

Recently Adopted Accounting Standards

We have adopted all new accounting standards impacting operations.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements.