On July 2, 2026, International Medication Systems, Limited ("IMS"), a subsidiary of the Company, received a warning letter (the "Warning Letter") from the FDA relating to IMS's drug manufacturing facility located in South El Monte, California. The Warning Letter follows an FDA inspection of the facility conducted in December 2025. The FDA issued inspectional observations at the conclusion of the inspection on an FDA Form 483.

 

The Warning Letter cites violations of current Good Manufacturing Practice ("CGMP") regulations for finished pharmaceuticals. The observations in the Warning Letter relate to investigation procedures, environmental monitoring and handling procedures, and manufacturing equipment. The Warning Letter does not direct IMS to cease or restrict products from the facility, nor does it require a further recall, although this is subject to third party verification. IMS continues to manufacture and supply products from the facility while implementing its remediation plan. The Warning Letter requests that IMS submit an initial response within 15 working days, conduct a risk assessment and submit a remediation plan.

 

The Company and IMS take the matters identified in the Warning Letter seriously. Since the conclusion of the inspection, IMS has implemented and is continuing to implement corrective actions in response to the Form 483 and Warning Letter. The Company is currently evaluating the impact of the Warning Letter on its business operations. The Company cannot, however, give any assurance that the FDA will be satisfied with IMS’s response or as to the timing of the resolution of the matters described in the Warning Letter. Until the deficiencies cited in the Warning Letter are resolved to the FDA's satisfaction, additional regulatory or legal action may be taken without further notice.