##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED September 30,
2005
 o
    
    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: 0-13976
 AKORN, INC.
 (Exact Name of Registrant as Specified in its Charter)
 LOUISIANA
    
    72-0717400(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)2500 MILLBROOK DRIVEBUFFALO GROVE, ILLINOIS
    
    60089(Address of Principal Executive Offices)
    
    (Zip Code)
 (847) 279-6100
 (Registrants telephone number)
  Yes þ No o
  Yes o No þ
  Yes o No þ




---



##### 



PagePART I. FINANCIAL INFORMATIONITEM 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets-September 30, 2005 and December 31, 2004
    
    
    3Condensed Consolidated Statements of Operations-Three and nine months ended September 30, 2005 and 2004
    
    
    4Condensed Consolidated Statement of Shareholders Equity-Nine months ended September 30, 2005
    
    
    5Condensed Consolidated Statements of Cash Flows-Nine months ended September 30, 2005 and 2004
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    18ITEM 4. Controls and Procedures
    
    
    19PART II. OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    19ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19ITEM 3. Defaults Upon Senior Securities
    
    
    20ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    20ITEM 5. Other Information
    
    
    20ITEM 6. Exhibits
    
    
    21
 2




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
IN THOUSANDS
(UNAUDITED)
 SEPTEMBER 30,
    
    
    DECEMBER 31,2005
    
    
    2004ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    2,024
    
    
    $
    4,110Trade accounts receivable (less allowance for
doubtful accounts of $189 and $435 respectively)
    
    
    1,821
    
    
    
    6,582Inventories
    
    
    10,751
    
    
    
    10,421Prepaid expenses and other current assets
    
    
    1,364
    
    
    
    1,280TOTAL CURRENT ASSETS
    
    
    15,960
    
    
    
    22,393PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    30,680
    
    
    
    31,893OTHER LONG-TERM ASSETSIntangibles, net
    
    
    10,560
    
    
    
    11,618Other
    
    
    45
    
    
    
    1,018TOTAL OTHER LONG-TERM ASSETS
    
    
    10,605
    
    
    
    12,636TOTAL ASSETS
    
    $
    57,245
    
    
    $
    66,922LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent installments of debt and debt in default
    
    $
    2,850
    
    
    $
    3,590Trade accounts payable
    
    
    2,118
    
    
    
    5,397Accrued compensation
    
    
    665
    
    
    
    499Accrued expenses and other liabilities
    
    
    1,315
    
    
    
    1,674TOTAL CURRENT LIABILITIES
    
    
    6,948
    
    
    
    11,160LONG-TERM LIABILITIESLong-term debt, less current installments
    
    
    4,699
    
    
    
    6,790Other
    
    
    1,879
    
    
    
    1,646TOTAL LONG-TERM LIABILITIES
    
    
    6,578
    
    
    
    8,436TOTAL LIABILITIES
    
    
    13,526
    
    
    
    19,596SHAREHOLDERS EQUITYCommon
stock, no par value  150,000,000 shares
authorized; 26,455,780 and 25,132,684 shares
issued and outstanding at September 30, 2005
and December 31, 2004, respectively
    
    
    64,134
    
    
    
    59,571Series A Preferred Stock, $1.00 par value,
257,172 shares authorized and issued, 242,172
shares outstanding at September 30, 2005 and
December 31, 2004
    
    
    26,942
    
    
    
    25,787Series B Preferred Stock, $1.00 par value,
170,000 shares authorized, 141,000 shares
issued, 120,800 outstanding at September 30,
2005 and 138,500 outstanding at December 31, 2004
    
    
    11,998
    
    
    
    13,109Warrants to acquire common stock
    
    
    13,905
    
    
    
    14,160Accumulated deficit
    
    
    (73,260
    )
    
    
    (65,301
    )TOTAL SHAREHOLDERS EQUITY
    
    
    43,719
    
    
    
    47,326TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    57,245
    
    
    $
    66,922
  3




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS, EXCEPT PER SHARE DATA
(UNAUDITED)
 THREE MONTHS ENDED
    
    
    NINE MONTHS ENDEDSEPTEMBER 30,
    
    
    SEPTEMBER 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues
    
    $
    10,985
    
    
    $
    15,388
    
    
    $
    33,744
    
    
    $
    38,124Cost of sales
    
    
    7,317
    
    
    
    8,614
    
    
    
    21,881
    
    
    
    24,012GROSS PROFIT
    
    
    3,668
    
    
    
    6,774
    
    
    
    11,863
    
    
    
    14,112Selling, general and administrative expenses
    
    
    3,894
    
    
    
    4,068
    
    
    
    10,961
    
    
    
    10,218Amortization and write-down of intangibles
    
    
    353
    
    
    
    311
    
    
    
    1,157
    
    
    
    2,871Research and development expenses
    
    
    1,438
    
    
    
    438
    
    
    
    4,203
    
    
    
    1,150TOTAL OPERATING EXPENSES
    
    
    5,685
    
    
    
    4,817
    
    
    
    16,321
    
    
    
    14,239OPERATING INCOME (LOSS)
    
    
    (2,017
    )
    
    
    1,957
    
    
    
    (4,458
    )
    
    
    (127
    )Interest expense
    
    
    (595
    )
    
    
    (996
    )
    
    
    (1,705
    )
    
    
    (3,709
    )Gain related to dispute settlements
    
    
    
    
    
    
    1,582
    
    
    
    
    
    
    
    1,582Gain on Retirement of Debt
    
    
    
    
    
    
    
    
    
    
    1,212
    
    
    
    INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (2,612
    )
    
    
    2,543
    
    
    
    (4,951
    )
    
    
    (2,254
    )Income tax provision (benefit)
    
    
    2
    
    
    
    (44
    )
    
    
    17
    
    
    
    (42
    )NET INCOME (LOSS)
    
    
    (2,614
    )
    
    
    2,587
    
    
    
    (4,968
    )
    
    
    (2,212
    )Preferred stock dividends and adjustments
    
    
    (1,015
    )
    
    
    (33,318
    )
    
    
    (2,991
    )
    
    
    (33,318
    )NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS
    
    $
    (3,629
    )
    
    $
    (30,731
    )
    
    $
    (7,959
    )
    
    $
    (35,530
    )NET LOSS PER SHARE:BASIC AND DILUTED
    
    $
    (0.14
    )
    
    $
    (1.49
    )
    
    $
    (0.31
    )
    
    $
    (1.76
    )SHARES USED IN COMPUTING NET LOSS PER SHARE:BASIC AND DILUTED
    
    
    26,203
    
    
    
    20,605
    
    
    
    25,804
    
    
    
    20,230
  4




---



##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
IN THOUSANDS
(UNAUDITED)
 Warrants
    
    
    RetainedSeries A
    
    
    Series B
    
    
    to acquire
    
    
    EarningsCommon Stock
    
    
    Preferred
    
    
    Preferred
    
    
    Common
    
    
    (AccumulatedShares
    
    
    Amount
    
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Deficit)
    
    
    TotalBALANCES AT DECEMBER 31, 2004
    
    
    25,133
    
    
    $
    59,571
    
    
    $
    25,787
    
    
    $
    13,109
    
    
    $
    14,160
    
    
    $
    (65,301
    )
    
    $
    47,326Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,968
    )
    
    
    (4,968
    )Preferred stock dividends earned
    
    
    
    
    
    
    
    
    
    
    1,155
    
    
    
    597
    
    
    
    
    
    
    
    (1,752
    )
    
    
    Intrinsic value of beneficial
conversion features in convertible
preferred stock
    
    
    
    
    
    
    1,239
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,239
    )
    
    
    Conversion of preferred stock into
common stock
    
    
    682
    
    
    
    1,708
    
    
    
    
    
    
    
    (1,708
    )
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants into common stock
    
    
    200
    
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    (255
    )
    
    
    
    
    
    
    150Intrinsic value of beneficial
conversion features in convertible
interest
    
    
    
    
    
    
    204
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    204Exercise of stock options
    
    
    419
    
    
    
    694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    694Employee stock purchase plan issuances
    
    
    22
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Amortization of Deferred Compensation
related to Restricted Stock Awards
    
    
    
    
    
    
    273
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273BALANCES AT SEPTEMBER 30, 2005
    
    
    26,456
    
    
    $
    64,134
    
    
    $
    26,942
    
    
    $
    11,998
    
    
    $
    13,905
    
    
    $
    (73,260
    )
    
    $
    43,719
  5




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##### 



AKORN, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
(UNAUDITED)
 NINE MONTHS ENDEDSEPTEMBER 302005
    
    
    2004OPERATING ACTIVITIESNet loss
    
    $
    (4,968
    )
    
    $
    (2,212
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    4,927
    
    
    
    3,054Amortization of deferred financing costs
    
    
    72
    
    
    
    1,184Amortization of debt discounts
    
    
    876
    
    
    
    1,009Write-down of long lived assets
    
    
    
    
    
    
    1,849Gain related to dispute settlements
    
    
    
    
    
    
    (1,582
    )Prepayments to Strides Arcolab Limited
    
    
    (1,500
    )
    
    
    (1,250
    )Gain on Retirement of Debt
    
    
    (1,212
    )
    
    
    Non-cash expenses related to preferred stock
    
    
    
    
    
    
    1,064Non-cash stock compensation expense
    
    
    273
    
    
    
    Changes in operating assets and liabilities:Trade accounts receivable
    
    
    4,761
    
    
    
    (4,498
    )Inventories
    
    
    (330
    )
    
    
    (695
    )Prepaid expenses and other current assets
    
    
    480
    
    
    
    (122
    )Trade accounts payable
    
    
    (3,279
    )
    
    
    356Accrued expenses and other liabilities
    
    
    502
    
    
    
    (36
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    602
    
    
    
    (1,879
    )INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (744
    )
    
    
    (611
    )Purchase of intangible assets
    
    
    (75
    )
    
    
    (60
    )Proceeds from the sale of investment
    
    
    
    
    
    
    2,000NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
    
    
    (819
    )
    
    
    1,329FINANCING ACTIVITIESRepayment of long-term debt
    
    
    (253
    )
    
    
    (6,650
    )Repayment of NeoPharm Debt
    
    
    (2,500
    )
    
    
    Net borrowings (payments) under lines of credit
    
    
    
    
    
    
    (1,400
    )Net proceeds from Series B offering
    
    
    
    
    
    
    13,044Proceeds from Warrants
    
    
    150
    
    
    
    Proceeds under stock option and stock purchase plans
    
    
    734
    
    
    
    1,007NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    (1,869
    )
    
    
    6,001INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (2,086
    )
    
    
    5,451Cash and cash equivalents at beginning of period
    
    
    4,110
    
    
    
    218CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    2,024
    
    
    $
    5,669Amount paid for interest (net of capitalized interest)
    
    $
    397
    
    
    $
    408Amount paid/(refunded) for income taxes
    
    
    72
    
    
    
    (44
    )
  6




---



##### 



NOTE A  BUSINESS AND BASIS OF PRESENTATION
 Business:
 Basis of Presentation:
  Consolidation:
 Adjustments Form 10-K.
 NOTE B  USE OF ESTIMATES
  NOTE C  STOCK BASED COMPENSATION
   7




---



##### 



Three Months ended September 30
    
    
    Nine Months ended September, 302005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss) as reported
    
    
    (2,614
    )
    
    
    2,587
    
    
    
    (4,968
    )
    
    
    (2,212
    )Add stock-based employee compensation expense
included in reported net income
    
    
    123
    
    
    
    
    
    
    
    273
    
    
    
    Deduct total stock-based employee compensation
expense determined under fair-value-based method
for all awards
    
    
    (270
    )
    
    
    (1,789
    )
    
    
    (1,080
    )
    
    
    (2,306
    )Pro forma net income (loss)
    
    
    (2,761
    )
    
    
    798
    
    
    
    (5,775
    )
    
    
    (4,518
    )Add preferred stock dividends and adjustments
    
    
    (1,015
    )
    
    
    (33,318
    )
    
    
    (2,991
    )
    
    
    (33,318
    )Pro forma net loss available for common stockholders
    
    $
    (3,776
    )
    
    $
    (32,520
    )
    
    $
    (8,766
    )
    
    $
    (37,836
    )Basic and diluted loss per share of common stock
Shares used in Computing Net Loss Per Share
    
    
    26,203
    
    
    
    20,605
    
    
    
    25,804
    
    
    
    20,230As reported
    
    $
    (0.14
    )
    
    $
    (1.49
    )
    
    $
    (0.31
    )
    
    $
    (1.76
    )Pro forma
    
    $
    (0.14
    )
    
    $
    (1.58
    )
    
    $
    (0.34
    )
    
    $
    (1.87
    )
 NOTE D  REVENUE RECOGNITION
    NOTE E  ACCOUNTS RECEIVABLE ALLOWANCES
    SEPTEMBER 30,
    
    
    DECEMBER 31,2005
    
    
    2004Gross Accounts Receivable
    
    $
    10,138
    
    
    $
    14,050Less:Allowance for Doubtful Accounts
    
    
    (189
    )
    
    
    (435
    )Returns Reserve
    
    
    (1,406
    )
    
    
    (1,393
    )Discount and Allowances Reserve
    
    
    (179
    )
    
    
    (234
    )Chargeback and Rebates Reserves
    
    
    (6,543
    )
    
    
    (5,406
    )Net Trade Accounts Receivable
    
    $
    1,821
    
    
    $
    6,582
 8




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##### 



NOTE F  INVENTORIES
  SEPTEMBER 30,
    
    
    DECEMBER 31,2005
    
    
    2004Finished goods
    
    $
    4,566
    
    
    $
    5,194Work in process
    
    
    1,860
    
    
    
    1,380Raw materials and supplies
    
    
    4,325
    
    
    
    3,847$
    10,751
    
    
    $
    10,421
  NOTE G  PROPERTY, PLANT AND EQUIPMENT
  SEPTEMBER 30,
    
    
    DECEMBER 31,2005
    
    
    2004Land
    
    $
    396
    
    
    $
    396Buildings and leasehold improvements
    
    
    9,347
    
    
    
    9,325Furniture and equipment
    
    
    27,784
    
    
    
    27,571Sub-total
    
    
    37,527
    
    
    
    37,292Accumulated depreciation
    
    
    (26,231
    )
    
    
    (24,337
    )11,296
    
    
    
    12,955Construction in progress
    
    
    19,384
    
    
    
    18,938Property, Plant, & Equipment, net
    
    $
    30,680
    
    
    $
    31,893
  9




---



##### 



NOTE H  FINANCING ARRANGEMENTS
  September 30,
    
    
    December 31,2005
    
    
    2004Credit Agreement with LaSalle Bank
    
    $
    
    
    
    $
    2003 Subordinated Notes
    
    
    2,767
    
    
    
    2,767Promissory note to NeoPharm, Inc.
    
    
    
    
    
    
    3,250Convertible subordinated debentures
    
    
    5,000
    
    
    
    5,000Mortgages payable
    
    
    1,055
    
    
    
    1,3078,822
    
    
    
    12,324Less unamortized discount on debt
    
    
    (1,273
    )
    
    
    (1,944
    )Less current installments, debt in default
    
    
    (2,850
    )
    
    
    (3,590
    )Long-term debt
    
    $
    4,699
    
    
    $
    6,790
     10




---



##### 



NOTE I  EARNINGS PER COMMON SHARE
   11




---



##### 



NOTE J  INDUSTRY SEGMENT INFORMATION
  THREE MONTHS ENDED SEPTEMBER 30,
    
    
    NINE MONTHS ENDED SEPTEMBER 30,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESOphthalmic
    
    $
    5,779
    
    
    $
    8,807
    
    
    $
    17,102
    
    
    $
    22,613Injectable
    
    
    3,152
    
    
    
    3,872
    
    
    
    10,415
    
    
    
    8,177Contract Services
    
    
    2,054
    
    
    
    2,709
    
    
    
    6,227
    
    
    
    7,334Total revenues
    
    $
    10,985
    
    
    $
    15,388
    
    
    $
    33,744
    
    
    $
    38,124GROSS PROFITOphthalmic
    
    $
    2,261
    
    
    $
    5,066
    
    
    $
    6,453
    
    
    $
    11,452Injectable
    
    
    1,255
    
    
    
    1,572
    
    
    
    4,630
    
    
    
    2,264Contract Services
    
    
    152
    
    
    
    136
    
    
    
    780
    
    
    
    396Total gross profit
    
    
    3,668
    
    
    
    6,774
    
    
    
    11,863
    
    
    
    14,112Operating expenses
    
    
    5,685
    
    
    
    4,817
    
    
    
    16,321
    
    
    
    14,239Operating income (loss)
    
    
    (2,017
    )
    
    
    1,957
    
    
    
    (4,458
    )
    
    
    (127
    )Interest expense
    
    
    (595
    )
    
    
    (996
    )
    
    
    (1,705
    )
    
    
    (3,709
    )Gain related to disputed settlements
    
    
    
    
    
    
    1,582
    
    
    
    
    
    
    
    1,582Gain on Retirement of Debt
    
    
    
    
    
    
    
    
    
    
    1,212
    
    
    
    Income/(Loss) before income taxes
    
    $
    (2,612
    )
    
    $
    2,543
    
    
    $
    (4,951
    )
    
    $
    (2,254
    )
  12




---



##### 



NOTE K  COMMITMENTS AND CONTINGENCIES
   th
 th
    13




---



##### 



NOTE L  CUSTOMER AND SUPPLIER CONCENTRATION
     14




---



##### 



Item 2.
 AKORN, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS AND FACTORS AFFECTING FUTURE RESULTS
  
    
    Our ability to resolve our FDA compliance issues at our Decatur, Illinois manufacturing facility;
    
    Our ability to avoid defaults under debt covenants;
    
    Our ability to generate cash from operations sufficient to meet our working capital requirements;
    
    Our ability to obtain additional funding to operate and grow our business;
    
    The effects of federal, state and other governmental regulation of our business;
    
    Our success in developing, manufacturing and acquiring new products;
    
    Our success in developing, manufacturing and distributing new products through our joint
venture and licensing agreements;
    
    Our ability to complete and validate our lyophilization facility and receive FDA approval on a timely basis;
    
    Our ability to bring new products to market and the effects of sales of such products on our financial results;
    
    The effects of competition from generic pharmaceuticals and from other pharmaceutical companies;
    
    Availability of raw materials needed to produce our products; and
    
    Other factors referred to in this Form 10-Q, our Form 10-K and our other SEC filings.
 RESULTS OF OPERATIONS
 THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO 2004
  THREE MONTHS ENDED SEPTEMBER 30,2005
    
    
    2004Ophthalmic segment
    
    $
    5,779
    
    
    $
    8,807Injectable segment
    
    
    3,152
    
    
    
    3,872Contract Services segment
    
    
    2,054
    
    
    
    2,709Total revenues
    
    $
    10,985
    
    
    $
    15,388
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NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO 2004
  NINE MONTHS ENDED SEPTEMBER 30,2005
    
    
    2004Ophthalmic segment
    
    $
    17,102
    
    
    $
    22,613Injectable segment
    
    
    10,415
    
    
    
    8,177Contract Services segment
    
    
    6,227
    
    
    
    7,334Total revenues
    
    $
    33,744
    
    
    $
    38,124
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FINANCIAL CONDITION AND LIQUIDITY
 Overview
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FDA Compliance Matters
  Facility Expansion
   Credit Facility
  CRITICAL ACCOUNTING POLICIES
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. CONTROLS AND PROCEDURES
   PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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ITEM 3. DEFAULT UPON SENIOR SECURITIES
 None
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 None
 ITEM 5. OTHER INFORMATION
 None
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ITEM 6. EXHIBITS
  Exhibit No.
    
    Description(3.1)
    
    Restated Articles of Incorporation of the Company dated September 16, 2004, incorporated by reference to
Exhibit 3.1 to the Companys Registration Statement on Form S-1 filed on September 21, 2004.(3.2)
    
    Amended and Restated By-laws of the Company incorporated by reference to Exhibit 3.2 to the Companys
Registration Statement on Form S-1 filed on June 14, 2005.(4.1)
    
    First Amendment dated October 7, 2003 to Registration Rights Agreement dated July 12, 2001 between the
Company and The John N. Kapoor Trust dated 9/20/89, incorporated by reference to Exhibit 4.1 to the
Companys report on Form 8-K filed on October 24, 2003.(4.2)
    
    Form of Warrant Certificate, incorporated by reference to Exhibit 4.2 to the Companys report on Form 8-K
filed on October 24, 2003.(4.3)
    
    Form of Warrant Agreement dated October 7, 2003 between the Company and certain investors, incorporated by
reference to Exhibit 4.3 to the Companys report on Form 8-K filed on October 24, 2003.(4.4)
    
    Warrant Agreement dated October 7, 2003 between the Company and The John N. Kapoor Trust dated 9/20/89
issued with respect to New Credit Facility guaranty, incorporated by reference to Exhibit 4.4 to the
Companys report on Form 8-K filed on October 24, 2003.(4.5)
    
    Warrant Agreement dated October 7, 2003 between the Company and Arjun C. Waney issued with respect to New
Credit Facility guaranty, incorporated by reference to Exhibit 4.5 to the Companys report on Form 8-K filed
on October 24, 2003.(4.6)
    
    Warrant Agreement dated October 7, 2003 between the Company and The John N. Kapoor Trust dated 9/20/89
issued with respect to the Notes, incorporated by reference to Exhibit 4.6 to the Companys report on Form
8-K filed on October 24, 2003.(4.7)
    
    Warrant Agreement dated October 7, 2003 between the Company and Arjun C. Waney issued with respect to the
Notes, incorporated by reference to Exhibit 4.7 to the Companys report on Form 8-K filed on October 24,
2003.(4.8)
    
    Warrant Agreement dated October 7, 2003 between the Company and Argent Fund Management Ltd. issued with
respect to the Notes, incorporated by reference to Exhibit 4.8 to the Companys report on Form 8-K filed on
October 24, 2003.(4.9)
    
    Registration Rights Agreement dated October 7, 2003 among the Company and certain investors, incorporated by
reference to Exhibit 4.9 to the Companys report on Form 8-K filed on October 24, 2003.(4.10)
    
    Form of Subscription Agreement between the Company and certain investors, incorporated by reference to
Exhibit 4.1 to the Companys report on Form 8-K filed on August 24, 2004.(4.11)
    
    Form of Common Stock Purchase Warrant between the Company and certain investors, incorporated by reference
to Exhibit 4.2 to the Companys report on Form 8-K filed on August 24, 2004.(4.12)
    
    Warrant Purchase and Registration Agreement dated June 18, 2003 between the Company and AEG Partners LLC,
incorporated by reference to Exhibit 4.1 to the Companys report on Form 8-K filed on August 27, 2004.(4.13)
    
    Stock Registration Rights Agreement dated November 15, 1990 between the Company and The John N. Kapoor Trust
dated 9/20/89, incorporated by reference to Exhibit 4.12 to the Companys Registration Statement on Form S-1
filed on September 21, 2004.(4.14)
    
    Stock Purchase Agreement dated November 15, 1990 between the Company and The John N. Kapoor Trust dated
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Exhibit No.
    
    Description9/20/89, incorporated by reference to Exhibit 4.13 to the Companys Registration Statement on Form S-1 filed
on September 21, 2004.(10.1)
    
    Fourth Amendment to the Credit Agreement, incorporated by reference to Exhibit 10.1 to the Companys report
on Form 8-K filed on October 5, 2005.(10.2)
    
    Master Letter of Credit Agreement, incorporated by reference to Exhibit 10.2 to the Companys report on Form
8-K filed on October 5, 2005.(31.1)*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934(31.2)*
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934(32.1)*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of
the Sarbanes-Oxley Act of 2002(32.2)*
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of
the Sarbanes-Oxley Act of 2002
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SIGNATURES
  AKORN, INC./s/ JEFFREY A. WHITNELLJeffrey A. WhitnellSr. Vice President, Chief Financial Officer(Duly Authorized and Principal Financial Officer)
  23