Strengthens Rare Disease segment as largest driver of future growth, adding approximately $105 million in 2024 revenue on a pro forma basisAdds two durable commercial assets ILUVIEN® and YUTIQ® with significant growth potential, expanding ANI’s foothold in strategic therapeutic area of ophthalmologyAnticipated to drive high single-digit to low double-digit accretion in adjusted non-GAAP EPS in 2025 and to be substantially accretive thereafterNew capital structure in place, reducing interest expense by appro ...

PRINCETON, N.J., Sept. 16, 2024 (GLOBE NEWSWIRE) -- ANI Pharmaceuticals, Inc. (Nasdaq: ANIP) (“ANI” or the “Company”) announced today that the Company has initiated closing logistics for the previously announced acquisition of Alimera Sciences, Inc. (Nasdaq: ALIM). The Company expects closing of the acquisition of Alimera Sciences to be consummated and announced today, pending satisfaction or waiver of any remaining customary closing conditions. About ANI Pharmaceuticals, Inc. ANI Pharmaceuticals, Inc. (Nas ...

Company Overview - Alimera Sciences (ALIM) shares increased by 6.6% to $5.53 in the last trading session, following a significant volume of shares traded, contrasting with a 7.3% loss over the past four weeks [1] - The stock's rally is attributed to the announcement of a merger agreement with ANI Pharmaceuticals, scheduled to close on September 16, 2024, where Alimera will be acquired [1] Financial Performance - Alimera Sciences is expected to report a quarterly loss of $0.01 per share, reflecting an 83.3% year-over-year improvement [1] - Revenue projections for the upcoming report are $26.83 million, indicating a 14.9% increase compared to the same quarter last year [1] Earnings Estimates and Market Sentiment - The consensus EPS estimate for Alimera has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without earnings estimate revisions [2] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [2] Industry Context - Alimera Sciences operates within the Zacks Medical - Biomedical and Genetics industry, which includes other companies like Iovance Biotherapeutics (IOVA) [2] - Iovance Biotherapeutics has seen a 1.9% increase in its stock price, closing at $9.35, but has experienced a -14.5% return over the past month [2] Iovance Biotherapeutics Overview - The consensus EPS estimate for Iovance has increased by 7% over the past month to -$0.31, representing a 32.6% change from the previous year's report [3] - Iovance also holds a Zacks Rank of 3 (Hold), similar to Alimera [3]

Group 1 - ANI Pharmaceuticals, Inc. is in the process of completing its acquisition of Alimera Sciences, Inc. and is working in good faith to resolve any delays related to closing conditions [1] - The company emphasizes that any delays are due to discussions regarding closing conditions, which are expected to be resolved promptly [1] - ANI Pharmaceuticals is a diversified biopharmaceutical company focused on developing, manufacturing, and marketing high-quality branded and generic prescription pharmaceutical products [2] Group 2 - ANI Pharmaceuticals aims to deliver sustainable growth by scaling up its Rare Disease business, enhancing its Generics business, and leveraging its U.S. based manufacturing capabilities [2]

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) Alimera Sciences, Inc.'s unaudited condensed consolidated financial statements and notes for Q2 2024 and FY 2023 are presented [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (In thousands) | Metric (In thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $10,828 | $12,058 | | Accounts receivable, net | $37,079 | $34,545 | | Inventory | $3,455 | $1,879 | | Total current assets | $55,408 | $52,423 | | Total assets | $150,377 | $153,524 | | Total current liabilities | $19,838 | $21,913 | | Notes payable, net of discount | $69,731 | $64,489 | | Total liabilities | $111,589 | $107,354 | | Total stockholders' equity | $38,788 | $46,170 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (In thousands, except share and per share data) | Metric (In thousands, except share and per share data) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $27,000 | $17,538 | $50,011 | $31,084 | | Gross profit | $23,169 | $15,113 | $42,827 | $26,631 | | Total operating expenses | $23,246 | $16,321 | $45,206 | $31,141 | | Loss from operations | $(77) | $(1,208) | $(2,379) | $(4,510) | | Net loss before income taxes | $(3,354) | $(10,004) | $(9,637) | $(14,972) | | Net loss | $(3,311) | $(10,029) | $(9,562) | $(14,997) | | Net loss applicable to common stockholders | $(3,311) | $(10,698) | $(9,562) | $(15,680) | | Net loss per share — basic and diluted | $(0.06) | $(1.32) | $(0.18) | $(2.07) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (In thousands) | Metric (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(3,311) | $(10,029) | $(9,562) | $(14,997) | | Foreign currency translation adjustments | $(51) | — | $(199) | $172 | | Total other comprehensive (loss) income | $(51) | — | $(199) | $172 | | Comprehensive loss | $(3,362) | $(10,029) | $(9,761) | $(14,825) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (In thousands) | Metric (In thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $460 | $(8,205) | | Net cash used in investing activities | $(132) | $(75,443) | | Net cash (used in) provided by financing activities | $(1,348) | $97,123 | | Net change in cash and cash equivalents and restricted cash | $(1,229) | $13,503 | | Cash and cash equivalents and restricted cash — end of period | $10,861 | $18,807 | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (In thousands, except share data) | Metric (In thousands, except share data) | Balance, December 31, 2023 | Balance, June 30, 2024 | | :--------------------------------------- | :------------------------- | :--------------------- | | Common Shares | 52,354,450 | 52,387,763 | | Common Stock Amount | $524 | $524 | | Additional Paid-In Capital | $462,446 | $464,825 | | Accumulated Deficit | $(418,490) | $(428,052) | | Accumulated Other Comprehensive Loss | $(2,706) | $(2,905) | | Total Stockholders' Equity | $46,170 | $38,788 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on Alimera Sciences, Inc.'s accounting policies, significant transactions, and financial position [1. NATURE OF OPERATIONS](index=11&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Alimera Sciences, Inc. specializes in ophthalmic retinal pharmaceuticals and is undergoing a merger with ANI Pharmaceuticals, Inc. - Alimera Sciences, Inc. specializes in ophthalmic retinal pharmaceuticals, focusing on DME and NIU-PS with **ILUVIEN®** and **YUTIQ®** products[31](index=31&type=chunk) - The Company entered a Merger Agreement with ANI Pharmaceuticals, Inc. on June 21, 2024, where shareholders will receive **$5.50 in cash** and one contingent value right (CVR) per share[36](index=36&type=chunk)[49](index=49&type=chunk) - CVRs entitle holders to potential milestone payments based on **$140.0 million** (2026) and **$160.0 million** (2027) net revenue targets for ILUVIEN and YUTIQ[49](index=49&type=chunk)[50](index=50&type=chunk) [2. BASIS OF PRESENTATION](index=14&type=section&id=2.%20BASIS%20OF%20PRESENTATION) Interim financial statements are prepared under U.S. GAAP and SEC regulations, with management anticipating sufficient liquidity - Interim financial statements are prepared in accordance with **U.S. GAAP** and **SEC regulations**, to be read with the 2023 Annual Report on Form 10-K[52](index=52&type=chunk)[53](index=53&type=chunk) - As of June 30, 2024, cash and cash equivalents totaled **$10.9 million**, with management anticipating sufficient cash flow for the next 12 months[53](index=53&type=chunk) [3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=16&type=section&id=3.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the Company's key accounting policies, including asset acquisitions, foreign currency translation, and recent ASU adoptions - Pharmaceutical product licenses are accounted for as **asset acquisitions**, with costs assigned based on relative fair values[55](index=55&type=chunk) - Foreign subsidiary financial statements are translated into **U.S. dollars**, with translation adjustments in accumulated other comprehensive income (loss)[56](index=56&type=chunk) - ASU No. 2022-03 (Fair Value Measurement) and ASU No. 2023-07 (Segment Reporting) were adopted effective January 1, 2024, with **no material financial impact**[56](index=56&type=chunk)[57](index=57&type=chunk) - New accounting standards, including ASU 2023-09 (Income Tax Disclosures), are not yet effective, with ASU 2023-09 effective January 1, 2025[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [4. REVENUE RECOGNITION](index=18&type=section&id=4.%20REVENUE%20RECOGNITION) Revenue is recognized upon customer control of goods/services, including variable consideration and collaboration/license fees - Revenue is recognized when customers obtain control of goods or services, including estimates for **variable consideration** like rebates and discounts[62](index=62&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Collaboration and license revenue from upfront fees and milestone payments are recognized upon **IP delivery** or achieving **high-probability sales targets**[71](index=71&type=chunk)[73](index=73&type=chunk) Provision for Credit Losses (In thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :----------------------------- | :----------------------------- | | Beginning balance | $1,222 | $— | | Provision for credit losses | $176 | $1,496 | | Write-off of bad debt | $(1,212) | $(1,311) | | Ending Balance | $186 | $185 | [5. LEASES](index=22&type=section&id=5.%20LEASES) The Company applies FASB ASC 842 for leases, with practical expedients for transition and specific accounting for ROU assets and liabilities - The Company applies **FASB ASC 842 – Leases**, electing practical expedients and not recognizing ROU assets/liabilities for short-term leases[79](index=79&type=chunk) Operating Lease Supplemental Balance Sheet Information (In thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Right-of-use assets, net | $996 | $1,124 | | Total lease assets | $996 | $1,124 | | Total lease liabilities | $2,226 | $2,460 | Finance Lease Supplemental Balance Sheet Information (In thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Property and equipment, net | $589 | $554 | | Total lease assets | $589 | $554 | | Total lease liabilities | $489 | $450 | - Operating lease costs were **$0.1 million** (three months) and **$0.3 million** (six months) ended June 30, 2024[82](index=82&type=chunk) - Cash paid for operating leases was **$0.2 million** for both periods, while finance lease payments were **$0.1 million** and **$0.2 million** respectively[84](index=84&type=chunk)[90](index=90&type=chunk) [6. INVENTORY](index=24&type=section&id=6.%20INVENTORY) Inventories are valued at the lower of cost or net realizable value using the FIFO method, comprising component parts, work-in-progress, and finished goods - Inventories are valued at the **lower of cost or net realizable value** using the FIFO method, including component parts, work-in-progress, and finished goods[92](index=92&type=chunk) Inventory Composition (In thousands) | Inventory Type | June 30, 2024 | December 31, 2023 | | :------------- | :------------ | :---------------- | | Component parts | $653 | $688 | | Work-in-process | $308 | $134 | | Finished goods | $2,494 | $1,057 | | Total Inventory | $3,455 | $1,879 | [7. INTANGIBLE ASSETS](index=26&type=section&id=7.%20INTANGIBLE%20ASSETS) This section details the amortization and carrying amounts of ILUVIEN and YUTIQ intangible assets - The **ILUVIEN** intangible asset has a gross carrying amount of **$25.0 million**, with amortization expense of **$0.5 million** (three months) and **$1.0 million** (six months)[95](index=95&type=chunk) - The **YUTIQ** intangible asset, acquired for **$75.0 million** upfront, has a gross carrying amount of **$96.4 million**, with amortization expense of **$2.4 million** (three months) and **$4.8 million** (six months)[98](index=98&type=chunk) [8. LICENSE AGREEMENTS](index=26&type=section&id=8.%20LICENSE%20AGREEMENTS) This section details the Company's exclusive license agreements for ILUVIEN and YUTIQ, including royalties and milestone payments - The Company holds a worldwide exclusive license from EyePoint for **ILUVIEN** technology, with royalties payable on global net revenues[101](index=101&type=chunk)[102](index=102&type=chunk) - Alimera acquired exclusive commercialization rights to **YUTIQ** for **$75.0 million** upfront, plus **$7.5 million** in guaranteed 2024 quarterly payments and future royalties[104](index=104&type=chunk) - A June 19, 2024, agreement with SWK Funding, LLC modified the royalty payment to **3.125%** on FAc product net revenues, with a change of control buyout option[109](index=109&type=chunk) - An exclusive license agreement with Ocumension (Hong Kong) Limited for **ILUVIEN** in Asia included a **$10.0 million** upfront payment and potential **$89.0 million** in milestone payments[113](index=113&type=chunk)[114](index=114&type=chunk) - Royalty expense was **$0.8 million** (three months) and **$1.7 million** (six months) ended June 30, 2024, an increase from 2023[111](index=111&type=chunk) [9. LOAN AGREEMENTS](index=30&type=section&id=9.%20LOAN%20AGREEMENTS) This section details the Company's loan agreements, including refinancing, interest rates, and exit fee arrangements - The 2019 loan agreement with SLR Investment Corp. was refinanced and amended, increasing the facility to **$72.5 million** as of March 6, 2024[118](index=118&type=chunk)[123](index=123&type=chunk) - The 2019 Loan Agreement's interest rate was approximately **10.48%** as of June 30, 2024, with interest-only payments until April 30, 2025[124](index=124&type=chunk) - SLR exit fees, totaling up to **$3.8 million**, were triggered by revenue milestones, recognizing **$1.1 million** (Q1) and **$0.3 million** (Q2) in interest expense[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) [10. EARNINGS (LOSS) PER SHARE](index=34&type=section&id=10.%20EARNINGS%20(LOSS)%20PER%20SHARE) Basic and diluted EPS calculations are presented, noting that net losses render common stock equivalents anti-dilutive - Basic and diluted EPS are calculated using the **two-class method**, though preferred stockholders are not obligated to share in losses[135](index=135&type=chunk) - Due to net losses, basic and diluted net loss per share were identical, as common stock equivalents were **anti-dilutive**[136](index=136&type=chunk) Common Stock Equivalents Excluded from Diluted Net Loss Per Share Calculation | Metric | June 30, 2024 | June 30, 2023 | | :----- | :------------ | :------------ | | Common stock warrants | 1,600,000 | 1,600,000 | | Stock options | 3,275,893 | 1,217,045 | | Restricted stock units ("RSUs") | 869,638 | — | | Performance stock units ("PSUs") | 900,000 | — | | Total | 6,645,531 | 48,089,919 | [11. STOCKHOLDERS' EQUITY](index=34&type=section&id=11.%20STOCKHOLDERS'%20EQUITY) This section details changes in stockholders' equity, including preferred stock elimination and common stock issuance - The Company repurchased and eliminated all remaining **600,000 shares** of Series A Convertible Preferred Stock in 2023[139](index=139&type=chunk) - In 2023, Series B Convertible Preferred Stock was issued for **$79.0 million**, converting into **43,617,114 common shares** and Pre-Funded Warrants[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - As of June 30, 2024, **52,387,763 common shares** were outstanding, with no preferred stock outstanding[142](index=142&type=chunk) [12. STOCK-BASED COMPENSATION](index=36&type=section&id=12.%20STOCK-BASED%20COMPENSATION) This section details stock-based compensation expenses, equity incentive plans, and stock option/RSU/PSU activity - The **2023 Equity Incentive Plan** replaced the 2019 Plan, with a share reserve increasing annually by **6%** of outstanding common stock[144](index=144&type=chunk)[145](index=145&type=chunk) - Stock option compensation expense was approximately **$0.5 million** (three months) and **$1.0 million** (six months), with **$4.5 million** unrecognized[147](index=147&type=chunk) Stock Option Activity (Three Months Ended June 30) | Metric | 2024 Options | Weighted Average Exercise Price ($) | 2023 Options | Weighted Average Exercise Price ($) | | :----- | :----------- | :---------------------------------- | :----------- | :---------------------------------- | | Options outstanding at beginning of period | 3,239,384 | 7.38 | 1,216,953 | 18.03 | | Grants | 64,000 | 3.00 | 17,321 | 2.55 | | Forfeitures and expirations | (27,491) | 12.80 | (17,229) | 45.18 | | Options outstanding at period end | 3,275,893 | 7.25 | 1,217,045 | 17.43 | - Restricted stock and RSU compensation expense was **$0.3 million** (three months) and **$0.6 million** (six months), with **$3.0 million** unrecognized[160](index=160&type=chunk)[161](index=161&type=chunk) - PSU compensation costs were **$0.9 million** for both periods, with **299,999 PSUs** vesting in July 2024[165](index=165&type=chunk) [13. INCOME TAXES](index=42&type=section&id=13.%20INCOME%20TAXES) This section discusses deferred tax assets, valuation allowances, and net operating loss carry-forwards - Deferred tax assets and liabilities are recognized, with a **full valuation allowance** against U.S. deferred tax assets due to operating losses[168](index=168&type=chunk) - A tax benefit of less than **$0.1 million** was recorded for both periods, with the effective tax rate impacted by valuation allowances[170](index=170&type=chunk) - As of December 31, 2023, federal NOL carry-forwards were **$146.8 million** and state NOLs were **$106.8 million**, subject to Section 382 limitations[170](index=170&type=chunk)[171](index=171&type=chunk) [14. SEGMENT INFORMATION](index=44&type=section&id=14.%20SEGMENT%20INFORMATION) Operations are managed as three reportable segments: U.S., International, and Operating Cost, evaluated by adjusted segment income or loss - Operations are managed as three reportable segments: **U.S., International, and Operating Cost**, evaluated by adjusted segment income or loss[175](index=175&type=chunk) - For Q2 2024, U.S. segment net revenue was **$17.6 million** (**65%** of consolidated), and International segment net revenue was **$9.4 million**[179](index=179&type=chunk) - For H1 2024, U.S. segment net revenue was **$32.1 million** (**64%** of consolidated), and International segment net revenue was **$17.9 million**[184](index=184&type=chunk) - Two large U.S. distributors accounted for **65%** (three months) and **64%** (six months) of consolidated product revenues[178](index=178&type=chunk) [15. FAIR VALUE](index=46&type=section&id=15.%20FAIR%20VALUE) This section outlines the Company's fair value measurements, including the hierarchy and valuation of derivative instruments - The Company applies **FASB ASC 820, Fair Value Measurements**, establishing a hierarchy based on input observability[186](index=186&type=chunk)[187](index=187&type=chunk) - The Ocumension warrant asset is a **Level 2 derivative instrument**, valued using the Black-Scholes model, with changes in the statement of operations[188](index=188&type=chunk)[191](index=191&type=chunk) Assets Measured at Fair Value (In thousands) | Metric | Level 1 | Level 2 | Level 3 | Total | | :----- | :------ | :------ | :------ | :---- | | Warrant asset (June 30, 2024) | $— | $7 | $— | $7 | | Warrant asset (December 31, 2023) | $— | $52 | $— | $52 | [16. SUBSEQUENT EVENTS](index=48&type=section&id=16.%20SUBSEQUENT%20EVENTS) This section reports significant events occurring after the reporting period, including new manufacturing agreements and equity vesting - On July 17, 2024, a new Manufacturing Services Agreement was entered with Siegfried Irvine for **ILUVIEN** manufacturing and supply[192](index=192&type=chunk) - In July 2024, **299,999 PSUs** vested, and in August 2024, Pre-Funded Warrants were exercised for **1,996,402 common shares**[194](index=194&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Alimera Sciences, Inc.'s financial condition, operations, merger activities, products, market, and liquidity for Q2 2024 and FY 2023 [Overview](index=49&type=section&id=Overview) Alimera Sciences, Inc. is a global pharmaceutical company focused on improving retinal health through long-term treatment of chronic retinal diseases - Alimera Sciences, Inc. is a global ophthalmic retinal pharmaceutical company, improving retinal health with **ILUVIEN®** and **YUTIQ®**[196](index=196&type=chunk) [Agreement and Plan of Merger with ANI Pharmaceuticals, Inc. and ANIP Merger Sub INC.](index=49&type=section&id=Agreement%20and%20Plan%20of%20Merger%20with%20ANI%20Pharmaceuticals,%20Inc.%20and%20ANIP%20Merger%20Sub%20INC.) This section details the merger agreement with ANI Pharmaceuticals, Inc., including terms, conditions, and associated costs - On June 21, 2024, Alimera entered a Merger Agreement with ANI Pharmaceuticals, Inc., converting each common share into **$5.50 cash** and one CVR[197](index=197&type=chunk) - The merger is subject to customary closing conditions, including **regulatory and stockholder approvals**, with Alimera restricted from soliciting alternative proposals[198](index=198&type=chunk)[200](index=200&type=chunk) - CVRs offer potential milestone payments based on **$140.0 million** (2026) and **$160.0 million** (2027) net revenue targets for ILUVIEN and YUTIQ[210](index=210&type=chunk)[211](index=211&type=chunk)[213](index=213&type=chunk) - Merger Agreement costs totaled **$2.2 million** for both periods ended June 30, 2024, recorded in general and administrative expenses[215](index=215&type=chunk) [ILUVIEN and YUTIQ](index=53&type=section&id=ILUVIEN%20and%20YUTIQ) This section describes ILUVIEN and YUTIQ, their commercialization, and their CONTINUOUS MICRODOSING™ technology - **ILUVIEN** (0.19 mg) is commercialized for DME and NIU-PS globally, while **YUTIQ** (0.18 mg) is for chronic NIU-PS in the U.S[216](index=216&type=chunk) - Both products use **CONTINUOUS MICRODOSING™** to deliver consistent FAc levels for up to three years, mitigating side effects and reducing recurrence[217](index=217&type=chunk)[218](index=218&type=chunk)[225](index=225&type=chunk) [Disease Overview and Market Opportunity](index=55&type=section&id=Disease%20Overview%20and%20Market%20Opportunity) This section outlines the market opportunity for DME and uveitis, and ongoing clinical studies for ILUVIEN and YUTIQ - DME affects **750,000 people** in the U.S., and chronic NIU-PS affects **60,000-100,000 people** annually, both leading causes of blindness[227](index=227&type=chunk)[228](index=228&type=chunk)[231](index=231&type=chunk) - The **NEW DAY Study** (300 DME patients) evaluates ILUVIEN, with data expected in 2025; the **SYNCHRONICITY Study** (110 patient eyes) evaluates YUTIQ[232](index=232&type=chunk)[233](index=233&type=chunk)[235](index=235&type=chunk) - ILUVIEN is also being studied in a **DRCR Retina Network trial** for preventing visual acuity loss from radiation retinopathy[237](index=237&type=chunk) [Where We Market ILUVIEN to Treat Diabetic Macular Edema ("DME")](index=58&type=section&id=Where%20We%20Market%20ILUVIEN%20to%20Treat%20Diabetic%20Macular%20Edema%20(%22DME%22)) This section lists territories where ILUVIEN is authorized, reimbursed, and available for treating Diabetic Macular Edema (DME) ILUVIEN Marketing Authorization, Reimbursement, and Availability for DME | Category | Territories | | :------- | :---------- | | Indication for Treatment of DME | U.S., Australia, Bahrain, United Arab Emirates, U.K., Germany, France, Italy, Spain, Portugal, Ireland, Austria, Norway, Poland, the Netherlands, Luxembourg | | Territories Where ILUVIEN Has Received Reimbursement Approval to Treat DME | U.S., Kuwait, Lebanon, United Arab Emirates, U.K., Germany, France, Italy, Spain, Portugal, Ireland, Luxembourg, the Netherlands | | Territories Where ILUVIEN is Currently Available to Treat DME | U.S., Bahrain, Kuwait, Lebanon, United Arab Emirates, U.K., Belgium, Czech Republic, Germany, France, Italy, Spain, Portugal, Ireland, Austria, Luxembourg, Denmark, Norway, Finland, Sweden, the Netherlands | [Where We Market ILUVIEN and YUTIQ to Treat Chronic Non-Infectious Uveitis Affecting the Posterior Segment of the Eye ("NIU-PS")](index=58&type=section&id=Where%20We%20Market%20ILUVIEN%20and%20YUTIQ%20to%20Treat%20Chronic%20Non-Infectious%20Uveitis%20Affecting%20the%20Posterior%20Segment%20of%20the%20Eye%20(%22NIU-PS%22)) This section lists territories where ILUVIEN and YUTIQ are authorized, reimbursed, and available for treating chronic NIU-PS ILUVIEN and YUTIQ Marketing Authorization, Reimbursement, and Availability for NIU-PS | Category | Territories | | :------- | :---------- | | Indication for the Treatment of NIU-PS | U.S. (YUTIQ), U.K., Germany, France, Spain, Portugal, Ireland, Italy, Austria, Belgium, Denmark, Norway, Finland, Sweden, Poland, Czech Republic, the Netherlands, Luxembourg, United Arab Emirates (ILUVIEN) | | Territories Where ILUVIEN Has Received Marketing Authorization to Treat NIU-PS | U.K., Germany, France, Spain, Portugal, Ireland, Italy, Austria, Belgium, Denmark, Norway, Finland, Sweden, Poland, Czech Republic, the Netherlands, Luxembourg, United Arab Emirates | | Territories Where ILUVIEN Has Received Reimbursement Approval to Treat NIU-PS | U.K., Germany, Ireland, Italy, France, Portugal, Spain, Czech Republic, Luxembourg, the Netherlands | | Territories Where ILUVIEN is Currently Marketed to Treat NIU-PS | U.K., Germany, France, Spain, Portugal, Ireland, Italy, Austria, Belgium, Denmark, Norway, Finland, Sweden, Czech Republic, the Netherlands, Luxembourg, United Arab Emirates | [Where We Sell ILUVIEN Direct](index=58&type=section&id=Where%20We%20Sell%20ILUVIEN%20Direct) This section identifies the countries where Alimera Sciences, Inc. directly markets and sells ILUVIEN - Alimera commercially markets **ILUVIEN** directly in the U.S., Germany, the U.K., Portugal, and Ireland[243](index=243&type=chunk) [Where We Sell ILUVIEN Through Distributors](index=58&type=section&id=Where%20We%20Sell%20ILUVIEN%20Through%20Distributors) This section lists the countries where Alimera Sciences, Inc. sells ILUVIEN through third-party distributors - The Company sells **ILUVIEN** through distributors across Europe, Australia, New Zealand, China, Western Pacific, and the Middle East[244](index=244&type=chunk) [Sources of Revenues](index=59&type=section&id=Sources%20of%20Revenues) Revenue is primarily generated from ILUVIEN and YUTIQ sales, supplemented by licensing fees and royalties - Revenue is primarily from **ILUVIEN** and **YUTIQ** sales, with additional sources including upfront fees, milestone payments, and royalties[264](index=264&type=chunk) - Sales efforts focus on **formulary access**, physician education on product efficacy and safety, and patient/caregiver education[245](index=245&type=chunk)[246](index=246&type=chunk) - For Q2 2024, two large U.S. pharmaceutical distributors accounted for **65%** of consolidated product revenues[247](index=247&type=chunk) [Transactions with Ocumension Therapeutics ("Ocumension")](index=59&type=section&id=Transactions%20with%20Ocumension%20Therapeutics%20(%22Ocumension%22)) This section details the exclusive license agreement with Ocumension for ILUVIEN in Asia, including upfront payments and warrants - An exclusive license agreement with Ocumension for **ILUVIEN** in Asia included a **$10.0 million** upfront payment and potential **$89.0 million** in milestone payments[248](index=248&type=chunk)[250](index=250&type=chunk) - The Company received **1,000,000 non-transferable warrants** from Ocumension, revalued at each reporting date[252](index=252&type=chunk) [Agreements with EyePoint Parent and EyePoint](index=60&type=section&id=Agreements%20with%20EyePoint%20Parent%20and%20EyePoint) This section outlines licensing, collaboration, and supply agreements with EyePoint for ILUVIEN and YUTIQ - Alimera holds a worldwide license from EyePoint for steroid use in its proprietary insert technology for ocular diseases[254](index=254&type=chunk) - The New Collaboration Agreement converted profit share to a royalty of **6%** (up to **$75.0 million**) and **8%** (above), with a **$15.0 million** Future Offset[255](index=255&type=chunk) - Alimera acquired exclusive commercialization rights to **YUTIQ** for **$75.0 million** upfront, plus **$7.5 million** in guaranteed 2024 quarterly payments and future royalties[256](index=256&type=chunk) - A commercial supply agreement with EyePoint Parent ensures exclusive **YUTIQ** supply for U.S. commercialization until May 2025, with automatic renewals[257](index=257&type=chunk) [SWK Agreements](index=61&type=section&id=SWK%20Agreements) This section details agreements with SWK Funding, LLC, including royalty sales and modifications to royalty payments - EyePoint sold its royalty interest under the New Collaboration Agreement to **SWK Funding, LLC** in December 2020[259](index=259&type=chunk) - A June 19, 2024, agreement with SWK modified the royalty payment to **3.125%** on FAc product net revenues, with a change of control buyout option[260](index=260&type=chunk) [Consolidated Results of Operations](index=62&type=section&id=Consolidated%20Results%20of%20Operations) This section provides a consolidated overview of the Company's financial performance, including revenue, expenses, and net loss per share [Revenue](index=62&type=section&id=Revenue) Net revenue increased significantly, driven by YUTIQ acquisition and higher ILUVIEN unit sales Net Revenue (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $27,000 | $17,538 | $9,462 | 54% | | Six Months Ended June 30 | $50,011 | $31,084 | $18,927 | 61% | - Net revenue increase was primarily driven by **YUTIQ** in the U.S. segment and increased **ILUVIEN** unit sales internationally[264](index=264&type=chunk)[265](index=265&type=chunk) [Cost of Goods Sold, Excluding Depreciation and Amortization, and Gross Profit](index=62&type=section&id=Cost%20of%20Goods%20Sold,%20Excluding%20Depreciation%20and%20Amortization,%20and%20Gross%20Profit) Cost of goods sold increased due to higher product sales, while gross profit and margin remained stable Cost of Goods Sold (COGS) and Gross Profit (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | COGS (excluding D&A) | $(3,831) | $(2,425) | $(7,184) | $(4,453) | | Gross Profit | $23,169 | $15,113 | $42,827 | $26,631 | | Gross Margin | 86% | 86% | 86% | 86% | - COGS increase was primarily due to increased product sales, driven by the **YUTIQ acquisition** and higher **ILUVIEN** unit sales[266](index=266&type=chunk)[268](index=268&type=chunk) [Research, Development and Medical Affairs Expenses](index=63&type=section&id=Research,%20Development%20and%20Medical%20Affairs%20Expenses) Research, development, and medical affairs expenses increased due to higher consultant, clinical study, and personnel costs Research, Development and Medical Affairs Expenses (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $4,263 | $3,648 | $615 | 17% | | Six Months Ended June 30 | $8,624 | $7,812 | $812 | 10% | - The increase was primarily due to higher **consultant, clinical study, personnel, and ILUVIEN registration costs**[271](index=271&type=chunk)[272](index=272&type=chunk) [General and Administrative Expenses](index=64&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased significantly, mainly due to professional fees related to the ANI Merger Agreement General and Administrative Expenses (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $7,379 | $4,373 | $3,006 | 68% | | Six Months Ended June 30 | $12,811 | $8,544 | $4,267 | 51% | - The increase was mainly driven by **$2.0 million** in professional fees for the ANI Merger Agreement, higher personnel costs, and stock-based compensation[274](index=274&type=chunk) [Sales and Marketing Expenses](index=64&type=section&id=Sales%20and%20Marketing%20Expenses) Sales and marketing expenses increased due to higher personnel costs and expanded marketing efforts for YUTIQ Sales and Marketing Expenses (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $8,511 | $6,434 | $2,077 | 33% | | Six Months Ended June 30 | $17,593 | $12,238 | $5,355 | 44% | - The increase was primarily due to higher **personnel costs** and increased marketing costs for **YUTIQ**, conventions, and customer engagement[276](index=276&type=chunk) [Operating Expenses](index=64&type=section&id=Operating%20Expenses) Total operating expenses increased significantly, driven by merger-related costs, sales and marketing expansion, and amortization Total Operating Expenses (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $23,246 | $16,321 | $6,925 | 42% | | Six Months Ended June 30 | $45,206 | $31,141 | $14,065 | 45% | - Total operating expenses increased due to **$2.2 million** in merger-related G&A, **$1.8 million** in sales/marketing expansion, **$1.2 million** in YUTIQ amortization, and **$1.2 million** in stock compensation[263](index=263&type=chunk)[277](index=277&type=chunk) [Interest Expense and Other, Net](index=65&type=section&id=Interest%20Expense%20and%20Other,%20Net) Interest expense increased significantly due to triggered exit fees and higher interest on additional borrowings Interest Expense and Other, Net (In thousands) | Period | 2024 | 2023 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Three Months Ended June 30 | $3,153 | $1,694 | $1,459 | 86% | | Six Months Ended June 30 | $6,892 | $3,361 | $3,531 | 105% | - The increase was primarily due to **$1.4 million** in triggered exit fees and increased interest on additional borrowings[263](index=263&type=chunk)[279](index=279&type=chunk) [Basic and Diluted Net Loss Applicable to Common Stockholders per Share of Common Stock](index=65&type=section&id=Basic%20and%20Diluted%20Net%20Loss%20Applicable%20to%20Common%20Stockholders%20per%20Share%20of%20Common%20Stock) Basic and diluted net loss per share were identical due to net losses, rendering potentially dilutive securities anti-dilutive Net Loss Per Share | Period | 2024 | 2023 | | :----- | :--- | :--- | | Three Months Ended June 30 | $(0.06) | $(1.32) | | Six Months Ended June 30 | $(0.18) | $(2.07) | - Basic and diluted net loss per share were identical due to net losses, making potentially dilutive securities **anti-dilutive**[263](index=263&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk) [Results of Operations – Segment Review](index=65&type=section&id=Results%20of%20Operations%20%E2%80%93%20Segment%20Review) This section reviews the financial performance of the U.S., International, and Operating Cost segments, highlighting key revenue and expense drivers - Segments (U.S., International, Operating Cost) are evaluated based on **segment income or loss**, adjusted for non-cash items[283](index=283&type=chunk) [U.S. Segment Results](index=65&type=section&id=U.S.%20Segment%20Results) U.S. segment net revenue increased significantly, driven by the YUTIQ acquisition, while G&A decreased and S&M increased U.S. Segment Net Revenue and Gross Profit (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $17,558 | $11,876 | $32,110 | $19,456 | | Gross profit | $15,633 | $10,586 | $28,761 | $17,261 | - U.S. net revenue increased by **48%** (three months) and **65%** (six months), primarily driven by the **YUTIQ acquisition**[285](index=285&type=chunk)[288](index=288&type=chunk)[291](index=291&type=chunk) - U.S. G&A expenses decreased by **73%** (three months) and **59%** (six months), mainly due to reduced bad debt and insurance costs[289](index=289&type=chunk)[292](index=292&type=chunk) - U.S. S&M expenses increased by **23%** (three months) and **42%** (six months), driven by higher personnel and **YUTIQ** marketing costs[290](index=290&type=chunk)[293](index=293&type=chunk) [International Segment Results](index=67&type=section&id=International%20Segment%20Results) International net revenue increased significantly due to distributor stocking and end-user demand, with higher sales and marketing expenses International Segment Net Revenue and Gross Profit (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $9,442 | $5,662 | $17,901 | $11,628 | | Gross profit | $7,536 | $4,527 | $14,066 | $9,370 | - International net revenue increased by **65%** (three months) and **54%** (six months), driven by increased distributor stocking and end-user demand[294](index=294&type=chunk)[296](index=296&type=chunk)[298](index=298&type=chunk) - International S&M expenses increased by **29%** (three months) and **21%** (six months), primarily due to higher marketing and personnel costs[297](index=297&type=chunk)[299](index=299&type=chunk) [Operating Cost Segment Results](index=69&type=section&id=Operating%20Cost%20Segment%20Results) Operating Cost segment expenses increased, primarily driven by professional fees related to the ANI Merger Agreement Operating Cost Segment Expenses (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research, development and medical affairs expenses | $2,137 | $1,033 | $4,462 | $3,266 | | General and administrative expenses | $5,263 | $2,619 | $8,920 | $4,814 | | Sales and marketing expenses | $474 | $225 | $908 | $291 | | Total operating expenses | $7,874 | $3,877 | $14,290 | $8,371 | - Operating Cost G&A expenses increased by **104%** (three months) and **85%** (six months), largely due to **$2.0 million** in ANI Merger Agreement professional fees[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) [Other](index=71&type=section&id=Other) Other operating expenses increased significantly, mainly due to higher depreciation, amortization, and stock compensation Other Operating Expenses (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating expenses | $4,552 | $2,083 | $8,481 | $2,989 | | Depreciation and amortization | $3,093 | $1,866 | $6,178 | $2,547 | - Operating expenses in 'Other' increased by **119%** (three months) and **183%** (six months), primarily due to higher depreciation, amortization from **YUTIQ**, and increased stock compensation[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's cash position, funding outlook, debt, and equity transactions [Overview](index=71&type=section&id=Overview) The Company has incurred recurring losses and negative cash flow, but anticipates sufficient liquidity for the next 12 months, assuming merger consummation - The Company incurred recurring losses and negative cash flow, with a stockholders' equity deficit of **$428.1 million** as of June 30, 2024[309](index=309&type=chunk) - As of June 30, 2024, cash and equivalents totaled **$10.9 million**, with sufficient funding anticipated for 12 months, assuming merger consummation[310](index=310&type=chunk)[311](index=311&type=chunk) - Non-consummation of the merger may necessitate alternative financing, potentially leading to **substantial dilution** or requiring lender permission[311](index=311&type=chunk) [Sources and Uses of Cash for the six months ended June 30, 2024 compared to the six months ended June 30, 2023](index=73&type=section&id=Sources%20and%20Uses%20of%20Cash%20for%20the%20six%20months%20ended%20June%2030,%202024%20compared%20to%20the%20six%20months%20ended%20June%2030,%202023) Operating cash flow improved significantly, while investing activities decreased and financing activities shifted to net cash used - Net cash provided by operating activities was **$0.5 million**, a significant improvement from **$8.2 million used** in the prior year[313](index=313&type=chunk)[314](index=314&type=chunk) - Net cash used in investing activities was **$0.1 million**, significantly lower than **$75.4 million** in 2023, which included intangible asset acquisition[315](index=315&type=chunk) - Net cash used in financing activities was **$1.3 million**, primarily due to licensor obligations and exit fees, partially offset by **$5.0 million** from loan amendment[315](index=315&type=chunk) [Indebtedness](index=73&type=section&id=Indebtedness) This section details the Company's loan agreements, including facility increases, interest-only periods, and compliance with covenants - The 2019 Loan Agreement with SLR Investment Corp. was amended, increasing the facility to **$72.5 million**, with interest-only payments until April 30, 2025[317](index=317&type=chunk)[322](index=322&type=chunk) - The Company maintained compliance with its **revenue covenant**, with non-compliance potentially accelerating loan maturity[324](index=324&type=chunk) - Increased **SOFR rates** would raise interest costs, potentially impacting operations and debt obligations[323](index=323&type=chunk) [Series A Convertible Preferred Stock and Elimination](index=76&type=section&id=Series%20A%20Convertible%20Preferred%20Stock%20and%20Elimination) The Company repurchased and eliminated all remaining Series A Convertible Preferred Stock in 2023 - In 2023, the Company repurchased and eliminated the remaining **600,000 shares** of Series A Convertible Preferred Stock[325](index=325&type=chunk) [Series B Preferred Stock Financings and Elimination](index=77&type=section&id=Series%20B%20Preferred%20Stock%20Financings%20and%20Elimination) Series B Convertible Preferred Stock was issued and subsequently converted into common shares and Pre-Funded Warrants - In 2023, Series B Convertible Preferred Stock was issued for **$79.0 million**, converting into **43,617,114 common shares** and Pre-Funded Warrants[327](index=327&type=chunk) - In August 2024, Pre-Funded Warrants were exercised for **1,996,402 common shares**, with no remaining outstanding warrants[328](index=328&type=chunk) [Common and Preferred Stock](index=77&type=section&id=Common%20and%20Preferred%20Stock) The Company's authorized capital stock includes common and preferred shares, with only common shares outstanding as of June 30, 2024 - Authorized capital includes **150,000,000 common shares** and **10,000,000 preferred shares**; **52,387,763 common shares** were outstanding as of June 30, 2024[329](index=329&type=chunk) [Contractual Obligations and Commitments](index=77&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details contractual obligations, including clinical study expenses and manufacturing agreements - The **NEW DAY Study** incurred **$0.6 million** (three months) and **$1.6 million** (six months) in expenses, with **$1.5 million** expected for H2 2024[330](index=330&type=chunk) - A new Manufacturing Services Agreement with Siegfried Irvine for **ILUVIEN** manufacturing was entered on July 17, 2024, with a five-year term[332](index=332&type=chunk) - The Cadence Agreement for **ILUVIEN** applicator component manufacturing expires October 30, 2025, with less than **$1.0 million** expected for H2 2024[333](index=333&type=chunk)[334](index=334&type=chunk) [Off-Balance Sheet Arrangements](index=79&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has no relationships with unconsolidated entities or financial partnerships resulting in off-balance sheet arrangements - The Company has **no off-balance sheet arrangements** with unconsolidated entities or financial partnerships[336](index=336&type=chunk) [Impact of Recent Accounting Pronouncements](index=79&type=section&id=Impact%20of%20Recent%20Accounting%20Pronouncements) Refer to Note 3 in the Interim Financial Statements for details on recent accounting pronouncements and their anticipated effects - Refer to **Note 3** in the Interim Financial Statements for details on recent accounting pronouncements and their anticipated effects[337](index=337&type=chunk) [Foreign Exchange](index=79&type=section&id=Foreign%20Exchange) Fluctuations in foreign currency exchange rates negatively impacted net product revenue for the six months ended June 30, 2024 - Foreign currency exchange rate fluctuations decreased net product revenue by approximately **$0.1 million** for the six months ended June 30, 2024[338](index=338&type=chunk) [Non-GAAP Financial Measure](index=79&type=section&id=Non-GAAP%20Financial%20Measure) The Company provides non-GAAP Adjusted EBITDA to offer additional insight into its underlying performance - The Company provides **non-GAAP Adjusted EBITDA** for additional insight into underlying performance, used consistently by management[339](index=339&type=chunk) Reconciliation of U.S. GAAP Net Loss to Non-GAAP Adjusted EBITDA (In thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | U.S. GAAP net loss | $(3,311) | $(10,029) | $(9,562) | $(14,997) | | Non-GAAP adjusted EBITDA | $6,714 | $875 | $8,518 | $(1,521) | [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=79&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Alimera Sciences, Inc. is exempt from providing market risk disclosures in its Form 10-Q - The Company is exempt from market risk disclosures as it qualifies as a **"smaller reporting company"**[343](index=343&type=chunk) [ITEM 4. Controls and Procedures](index=81&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded Alimera Sciences, Inc.'s disclosure controls were effective as of June 30, 2024, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2024, by management[344](index=344&type=chunk) - No **material changes** in internal control over financial reporting occurred during the three months ended June 30, 2024[345](index=345&type=chunk) - Control systems provide **reasonable assurance**, acknowledging inherent limitations where misstatements may not be detected[346](index=346&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=81&type=section&id=ITEM%201.%20Legal%20Proceedings) Alimera Sciences, Inc. is not a party to any threatened or pending material litigation and has no contingency reserves - The Company is **not involved** in any threatened or pending material legal proceedings and has no contingency reserves[347](index=347&type=chunk) [ITEM 1A. Risk Factors](index=81&type=section&id=ITEM%201A.%20Risk%20Factors) This section updates risk factors from the 2023 Form 10-K, focusing on economic uncertainties, the pending ANI merger, and manufacturing/regulatory challenges [Economic Uncertainties and Downturns](index=81&type=section&id=Economic%20Uncertainties%20and%20Downturns) Prolonged economic uncertainties, geopolitical tensions, and supply chain disruptions may adversely affect the Company's business - Prolonged economic uncertainties, including **inflationary pressures**, geopolitical tensions, and supply chain disruptions, may adversely affect the business[349](index=349&type=chunk) - Negative economic trends could impact **reimbursement** from government and private insurers, potentially reducing product sales and revenue[350](index=350&type=chunk) [Risks Related to the Pending Merger with ANI Pharmaceuticals](index=82&type=section&id=Risks%20Related%20to%20the%20Pending%20Merger%20with%20ANI%20Pharmaceuticals) Failure to complete the ANI merger could lead to stock price decline, termination fees, business disruption, and differing interests for executives - Failure to complete the merger could lead to stock price decline, a **$10.4 million termination fee**, negative publicity, and diverted management resources[353](index=353&type=chunk)[355](index=355&type=chunk) - Merger pendency could disrupt operations, affect **employee retention**, and strain relationships with collaborators, suppliers, and customers[354](index=354&type=chunk) - Executive officers and directors may have interests in the merger that **differ from stockholders**, including accelerated equity vesting and severance[359](index=359&type=chunk) - If the merger is consummated, stockholders receive cash and CVRs, but **lose equity interests** in the surviving corporation, limiting future upside[360](index=360&type=chunk) [Manufacturing and Regulatory Compliance Risks](index=84&type=section&id=Manufacturing%20and%20Regulatory%20Compliance%20Risks) Non-compliance with cGMP, supplier issues, and changes in manufacturing processes pose significant risks to commercialization and regulatory approvals - Failure to comply with **FDA cGMP** and similar foreign regulations could harm commercialization and approvals, leading to sanctions or production interruptions[360](index=360&type=chunk) - EyePoint Parent, a **YUTIQ** supplier, received an **FDA warning letter** in July 2024 for cGMP violations, potentially affecting YUTIQ supply[360](index=360&type=chunk)[361](index=361&type=chunk) - Changes in manufacturing processes or facilities require **prior FDA review/approval**, potentially delaying product launch or requiring additional clinical testing[362](index=362&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=86&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Alimera Sciences, Inc. reports no unregistered sales of equity securities or use of proceeds for the period - None reported[365](index=365&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=86&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) Alimera Sciences, Inc. reports no defaults upon senior securities for the period - None reported[365](index=365&type=chunk) [ITEM 4. Mine Safety Disclosures](index=86&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to Alimera Sciences, Inc.'s operations - Not applicable[365](index=365&type=chunk) [ITEM 5. Other Information](index=86&type=section&id=ITEM%205.%20Other%20Information) Alimera Sciences, Inc. reports no other information for the period - Not applicable[365](index=365&type=chunk) [ITEM 6. Exhibits](index=87&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement, organizational documents, and certifications - Key exhibits include the **Merger Agreement**, **organizational documents**, **equity incentive plans**, **loan agreements**, **manufacturing services agreements**, and **certifications**[367](index=367&type=chunk) [Signatures](index=88&type=section&id=Signatures) The report was signed by Richard S. Eiswirth, Jr., President and CEO of Alimera Sciences, Inc., on August 7, 2024 - The report was signed by **Richard S. Eiswirth, Jr.**, President and Chief Executive Officer of Alimera Sciences, Inc., on **August 7, 2024**[368](index=368&type=chunk)

Company Performance - Alimera Sciences reported a quarterly loss of $0.06 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, but an improvement from a loss of $0.44 per share a year ago [1] - The company achieved revenues of $27 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 4.81% and showing an increase from $17.54 million in the same quarter last year [1] - Over the last four quarters, Alimera Sciences has surpassed consensus revenue estimates two times [1] Stock Performance - Alimera Sciences shares have increased approximately 28.5% since the beginning of the year, outperforming the S&P 500's gain of 8.7% [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $26.83 million, and for the current fiscal year, it is -$0.13 on revenues of $105.17 million [4] - The trend of estimate revisions for Alimera Sciences is mixed, which could change following the recent earnings report [4] Industry Context - The Medical - Biomedical and Genetics industry, to which Alimera Sciences belongs, is currently in the top 37% of over 250 Zacks industries, indicating a favorable outlook [5] - Ocuphire Pharma, Inc., another company in the same industry, is expected to report a quarterly loss of $0.29 per share, reflecting a year-over-year change of -20.8% [5]

Executive Summary [Key Second Quarter Financial Highlights](index=1&type=section&id=Key%20Second%20Quarter%20Financial%20Highlights) Alimera Sciences reported strong financial results for Q2 2024, with significant revenue growth and improved profitability, driven by the integration of YUTIQ and increased international sales | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Net Revenue | $27.0 | $17.5 | +54% | | Net Loss | $(3.3) | $(10.7) | Improved | | Adjusted EBITDA | $6.7 | $0.9 | +644% | | U.S. Net Revenue | $17.6 | $11.9 | +48% | | International Net Revenue| $9.4 | $5.7 | +65% | | Global End User Demand | 3,821 units | N/A | +6% | [Second Quarter Corporate Highlights](index=1&type=section&id=Second%20Quarter%20Corporate%20Highlights) During Q2 2024, Alimera Sciences entered into a definitive merger agreement with ANI Pharmaceuticals and modified its royalty payment terms with SWK Funding LLC - **Alimera entered into a definitive merger agreement with ANI Pharmaceuticals Inc. on June 21, 2024**, valuing Alimera's equity at approximately **$320 million upfront**, with an expected closing later this year[3](index=3&type=chunk) - The company modified royalty payment terms with SWK Funding LLC, reducing the royalty rate to **3.125% of net revenues** for products containing fluocinolone acetonide (FAc), including ILUVIEN and YUTIQ[3](index=3&type=chunk) Detailed Financial Performance [Net Revenue](index=2&type=section&id=Net%20Revenue) Consolidated global net revenue increased significantly, driven by the acquisition of YUTIQ in the U.S. and strong sales volumes internationally, with both segments showing robust growth in Q2 2024 [Consolidated Global Net Revenue](index=2&type=section&id=Consolidated%20Global%20Net%20Revenue) Consolidated global net revenue for Q2 2024 was $27 million, a 54% increase from $17.5 million in Q2 2023, primarily due to the addition of YUTIQ in the U.S. and increased international sales | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Consolidated Net Revenue | $27.0 | $17.5 | +54% | [U.S. Net Revenue](index=2&type=section&id=U.S.%20Net%20Revenue) U.S. net revenue grew 48% to $17.6 million in Q2 2024, up from $11.9 million in Q2 2023, largely attributed to the revenue generated by YUTIQ, acquired in May 2023. U.S. end user demand also increased by 6% | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | U.S. Net Revenue | $17.6 | $11.9 | +48% | | U.S. End User Demand | 2,189 units | N/A | +6% | - The increase in U.S. net revenue was primarily driven by net revenue from YUTIQ, which Alimera acquired in May 2023[4](index=4&type=chunk) [International Net Revenue](index=2&type=section&id=International%20Net%20Revenue) International net revenue surged by 65% to $9.4 million in Q2 2024, compared to $5.7 million in Q2 2023, fueled by increased stocking by international distributors and growth in end user demand, which also rose by 6% | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | International Net Revenue| $9.4 | $5.7 | +65% | | International End User Demand| 1,632 units | N/A | +6% | - The increase in international net revenue was driven by both increased stocking of international distributors and growth in end user demand[4](index=4&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased to $23.2 million in Q2 2024, up from $16.3 million in Q2 2023, primarily due to merger-related general and administrative expenses, expanded sales and marketing infrastructure, increased amortization from the YUTIQ acquisition, and higher stock-based compensation | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Total Operating Expenses | $23.2 | $16.3 | +42.3% | - Key drivers for the increase in operating expenses include: **$2.2 million** in G&A expenses related to the ANI merger, **$1.8 million** in additional sales and marketing expenses for U.S. product expansion, **$1.2 million** in additional amortization from the YUTIQ acquisition, and **$1.2 million** in additional stock-based compensation[5](index=5&type=chunk) [Cash and Cash Equivalents](index=2&type=section&id=Cash%20and%20Cash%20Equivalents) Alimera's cash and cash equivalents decreased to $10.8 million as of June 30, 2024, from $14.3 million at March 31, 2024, primarily due to accrued licensor payments for YUTIQ and exit fee payments related to loan agreements | Metric | June 30, 2024 (Millions) | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :----------------------- | :----------------------- | :------------------------ | :--------------------------- | | Cash and Cash Equivalents| $10.8 | $14.3 | $12.1 | - During Q2 2024, the company made **$1.9 million** in accrued licensor payments for YUTIQ and **$2.4 million** in accrued exit fee payments due to revenue milestones[6](index=6&type=chunk) Company Information [About Alimera Sciences, Inc.](index=2&type=section&id=About%20Alimera%20Sciences%2C%20Inc.) Alimera Sciences is a global pharmaceutical company dedicated to retinal health, aiming to provide invaluable solutions for patients, physicians, and partners to maintain better vision longer - Alimera Sciences is a global pharmaceutical company focused on retinal health, with a mission to be invaluable to patients, physicians, and partners in maintaining better vision longer[7](index=7&type=chunk) Non-GAAP Financial Measures [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) Alimera uses Adjusted EBITDA as a non-GAAP financial measure to supplement GAAP results, believing it provides management and investors with a clearer understanding of ongoing operations and financial performance by excluding certain non-recurring or non-operational items - Alimera defines "Adjusted EBITDA" as earnings before interest, taxes, depreciation, amortization, stock-based compensation expenses, net unrealized gains and losses from foreign currency exchange transactions, gains on extinguishment of debt, preferred stock dividends, severance expenses, expenses incurred with Merger Agreement, and change in fair value of warrant asset[8](index=8&type=chunk) - The company uses Adjusted EBITDA to supplement GAAP financial information, believing it helps management understand ongoing operations and provides meaningful supplemental information to investors by excluding items not indicative of its core business[8](index=8&type=chunk)[9](index=9&type=chunk) [Limitations](index=3&type=section&id=Limitations) The company acknowledges that Adjusted EBITDA may not be comparable to similarly titled measures from other companies and should not be considered in isolation from or as a substitute for GAAP measures, as it excludes significant GAAP-required elements and involves management judgments - Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies due to varying calculation methods[9](index=9&type=chunk) - The presentation of this non-GAAP measure is not intended to be considered in isolation from or as a substitute for GAAP financial performance measures and should be read only in conjunction with GAAP information[10](index=10&type=chunk) - A principal limitation is that it excludes significant elements required by GAAP to be recorded in financial statements and reflects management's judgments[11](index=11&type=chunk) Legal and Disclosures [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding Alimera's future expectations, business strategy, and financial position, which are subject to inherent risks and uncertainties detailed in SEC filings. Investors are cautioned not to rely on these statements as predictions of future events - The press release includes forward-looking statements concerning growth opportunities, product demand, business strategy, future operations, financial position, revenues, costs, prospects, plans, and objectives[12](index=12&type=chunk) - These statements are based on current expectations and involve inherent risks and uncertainties, including factors discussed in Alimera's SEC filings (10-K, 10-Q)[12](index=12&type=chunk) - Investors are cautioned not to rely on forward-looking statements as predictions of future events, and Alimera undertakes no obligation to publicly update or revise them, except as required by law[13](index=13&type=chunk) [Additional Information and Where to Find It](index=4&type=section&id=Additional%20Information%20and%20Where%20to%20Find%20It) Alimera intends to file a proxy statement regarding the merger with ANI, and investors are urged to review all relevant documents filed with the SEC for important information about the transaction. These materials will be available free of charge on the SEC's website and the companies' respective websites - Alimera intends to file a preliminary and definitive proxy statement with the SEC in connection with the merger, which will be delivered to stockholders[14](index=14&type=chunk) - Investors and security holders are urged to read the definitive proxy statement and other relevant documents carefully when they become available, as they will contain important information about the merger[14](index=14&type=chunk) - Materials filed by ANI and Alimera can be obtained free of charge at the SEC's website (www.sec.gov) and their respective company websites (www.anipharmaceuticals.com and www.alimerasciences.com)[14](index=14&type=chunk) Unaudited Consolidated Financial Statements [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2024, Alimera's total assets were $150.4 million, a slight decrease from $153.5 million at December 31, 2023. Total liabilities increased to $111.6 million, while total stockholders' equity decreased to $38.8 million | Metric (In thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Total Assets | $150,377 | $153,524 | | Total Liabilities | $111,589 | $107,354 | | Total Stockholders' Equity| $38,788 | $46,170 | | Cash and Cash Equivalents| $10,828 | $12,058 | | Accounts Receivable, net| $37,079 | $34,545 | | Inventory | $3,455 | $1,879 | | Notes Payable, net | $69,731 | $64,489 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2024, Alimera reported net revenue of $27.0 million, leading to a gross profit of $23.2 million. The company significantly reduced its net loss to $(3.3) million compared to $(10.0) million in Q2 2023, and net loss per share improved to $(0.06) | Metric (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Net Revenue | $27,000 | $17,538 | | Gross Profit | $23,169 | $15,113 | | Total Operating Expenses| $23,246 | $16,321 | | Loss from Operations | $(77) | $(1,208) | | Net Loss | $(3,311) | $(10,029) | | Net Loss per Share | $(0.06) | $(1.32) | [Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Adjusted%20EBITDA) Alimera's Non-GAAP Adjusted EBITDA for Q2 2024 was $6.7 million, a substantial increase from $0.9 million in Q2 2023, reflecting adjustments for interest expense, merger-related expenses, depreciation, amortization, and stock-based compensation, among other items | Metric (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | U.S. GAAP Net Loss | $(3,311) | $(10,029) | | Interest expense and other, net| $3,153 | $1,694 | | Expenses incurred with Merger Agreement| $2,226 | — | | Depreciation and amortization| $3,093 | $1,866 | | Stock-based compensation| $1,457 | $217 | | Non-GAAP Adjusted EBITDA| $6,714 | $875 |

Core Insights - Alimera Sciences reported a significant increase in net revenue, up 54% to $27 million compared to Q2 2023, driven by strong performance in both U.S. and international markets [1][3][5] - The company has entered into a definitive merger agreement with ANI Pharmaceuticals, which is expected to close later this quarter [1][4][2] Financial Performance - Net revenue for Q2 2024 reached approximately $27 million, a 54% increase from $17.5 million in Q2 2023 [3][5] - U.S. net revenue was approximately $17.6 million, up 48% from $11.9 million in Q2 2023, primarily due to the acquisition of YUTIQ [3][5] - International net revenue increased by 65% to approximately $9.4 million compared to $5.7 million in Q2 2023, driven by increased stocking and end user demand [3][5] - Adjusted EBITDA for Q2 2024 was $6.7 million, compared to $0.9 million in Q2 2023 [3][5] Corporate Developments - The merger agreement with ANI Pharmaceuticals values Alimera's equity at approximately $320 million, with a cash offer of $5.50 per share and potential contingent value rights [4] - The company has modified royalty payment terms, reducing the royalty to 3.125% of net revenues for products containing fluocinolone acetonide [4][6] Operating Expenses - Total operating expenses for Q2 2024 were approximately $23.2 million, an increase from $16.3 million in Q2 2023, attributed to merger-related costs and expanded commercial infrastructure [6][7] Cash Position - As of June 30, 2024, Alimera had cash and cash equivalents of approximately $10.8 million, down from $14.3 million at the end of Q1 2024 [7]

Group 1 - Monteverde & Associates PC is investigating Alimera Sciences, Inc. regarding its proposed merger with ANI Pharmaceuticals, Inc. [1] - Under the merger agreement, Alimera Sciences shareholders will receive $5.50 per share and one contingent value right, which could provide up to $0.50 per share based on achieving specific net revenue targets in 2026 and 2027 [1] - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report, highlighting its successful track record in recovering money for shareholders [1][3] Group 2 - The firm operates from the Empire State Building in New York City and specializes in class action securities litigation [3] - The firm encourages shareholders with concerns to contact them for additional information free of charge [3] - The firm emphasizes that no company, director, or officer is above the law, reinforcing its commitment to shareholder rights [3]

NEW YORK, July 2, 2024 /PRNewswire/ -- Monteverde & Associates PC (the "M&A Class Action Firm"), has recovered money for shareholders and is recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report. We are headquartered at the Empire State Building in New York City and are investigating Alimera Sciences, Inc. (Nasdaq: ALIM), relating to its proposed merger with ANI Pharmaceuticals, Inc. Under the terms of the agreement, Alimera Sciences shareholders will receive $5.50 per sha ...