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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 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: 001-34263
 Impax Laboratories, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    65-0403311(State or other jurisdiction of incorporation or
 organization)
    
    (I.R.S. Employer Identification No.)30831 Huntwood Avenue, Hayward, CA
    
    94544(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(510) 476-2000
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registered:Common Stock, par value $0.01 per share 
Series A Junior Participating
Preferred Stock Purchase Rights
    
    The NASDAQ Stock Market LLC
The NASDAQ Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act: None
 Yes þ No o
 o þ
 þ o
 o o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 Forward-Looking Statements
    
    
    iiPART I
    
    
    1Item 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    16Item 1B. Unresolved Staff Comments
    
    
    38Item 2. Properties
    
    
    38Item 3. Legal Proceedings
    
    
    39Item 4. (Removed and Reserved)
    
    
    44PART II
    
    
    45Item 5. Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    45Item 6. Selected Financial Data
    
    
    48Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    49Item 7A. Quantitative and Qualitative Disclosures about Market
Risk
    
    
    86Item 8. Financial Statements and Supplementary Data
    
    
    86Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
    
    
    86Item 9A. Controls and Procedures
    
    
    87Item 9B. Other Information
    
    
    90PART III
    
    
    91Item 10. Directors, Executive Officers and Corporate
Governance
    
    
    91Item 11. Executive Compensation
    
    
    91Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    91Item 13. Certain Relationships and Related Transactions, and
Director Independence
    
    
    91Item 14. Principal Accounting Fees and Services
    
    
    91PART IV
    
    
    92Item 15. Exhibits and Financial Statement Schedules
    
    
    92SIGNATURESEXHIBIT INDEXExhibit 10.1.8Exhibit 10.14Exhibit 10.15Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   i




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Forward-Looking Statements
   ii




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PART I
 
 Item 1.
    
    Business
 Overview
   
    
    62 ANDAs approved by the Food and Drug Administration (FDA), which include
generic versions of brand name pharmaceuticals such as Brethine®, Florinef®,
Minocin®, Claritin-D® 12-hour, Claritin-D® 24-hour, Wellbutrin SR®, Wellbutrin XL®,
Ditropan XL®, Depakote ER® and Prilosec®.
    
    38 applications pending at the FDA, including 2 tentatively approved (i.e.,
satisfying substantive FDA requirements but remaining subject to statutory
pre-approval restrictions), that address approximately $19.7 billion in recent 12
month U.S. product sales.
    
    61 products in various stages of development for which applications have not yet
been filed.
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Our Strategy
   Global Division
   
    
    the Global Product sales channel: generic pharmaceutical prescription products
we sell directly to wholesalers, large retail drug chains, and others;
    
    the Private Label sales channel: generic pharmaceutical over-the-counter
(OTC) and prescription products we sell to unrelated third parties who in-turn
sell the product under their own label,
    
    the Rx Partner sales channel: generic prescription products sold through
unrelated third-party pharmaceutical entities pursuant to alliance and collaboration
agreements; and
    
    the OTC Partner sales channel: sales of generic pharmaceutical OTC products
sold through unrelated third-party pharmaceutical entities pursuant to alliance and
collaboration agreements.
   2




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Product
    
    Generic of2004 OR EARLIERMethytestosterone 10mg
    
    Android®Orphenadrine 100 mg Tablets
    
    Norflex®Minocycline 50, 75 and 100 mg Capsules
    
    Minocin®Terbutaline 2.5 and 5 mg Tablets
    
    Brethine®Fludrocortisone 0.1 mg Tablets
    
    Florinef®Rimantadine 100 mg Tablets
    
    Flumadine®Pyridostigmine 60 mg Tablets
    
    Mestinon®Chloroquine 250 mg Tablets
    
    N/AChloroquine 500 mg Tablets
    
    Aralen®Flavoxate 100 mg Tablets
    
    Urispas®Fenofibrate 67, 134 and 200 mg Capsules
    
    Lofibra®Loratadine and Pseudoephedrine Sulfate 5/120 mg ER Tablets
    
    Claritin-D 12-hr®Bupropion Hydrochloride 100 and 150 mg ER Tablets (twice daily)
    
    Wellbutrin SR®Bupropion Hydrochloride 150 mg ER Tablets (twice daily)
    
    Zyban®Loratadine and Pseudoephedrine Sulfate 10/240 mg ER Tablets
    
    Claritin-D® 24-HourDemeclocycline Hydrochloride 150 and 300 mg Tablets
    
    Declomycin®Carbidopa/Levodopa 25/100 & 50/200 mg ER Tablets
    
    SinemetCR®Midodrine Hydrochloride 2.5, 5 and 10 mg Tablets
    
    ProAmatine®Bupropion Hydrochloride 200 mg ER Tablets (twice daily)
    
    Wellbutrin SR®2005Dantrolene Sodium 25, 50 and 100 mg Capsules
    
    Dantrium®Carprofen 25, 75 and 100 mg Caplets (a veterinary product)
    
    Rimadyl®2006Pilocarpine Hydrochloride 5 and 7.5 mg Tablets
    
    Salagen®Colestipol Hydrochloride 5 g Packet and 5 g Scoopful
    
    Colestid®Colestipol Hydrochloride 1 g Tablets
    
    Colestid®Bethanechol Chloride 5, 10, 25 and 50 mg Tablets (4 separate ANDAs)
    
    Urecholine®Oxybutynin Chloride 15 mg ER Tablets (1a)
    
    Ditropan XL®Bupropion Hydrochloride 300 mg ER Tablets (1b) (once daily)
    
    Wellbutrin XL®2007Nadolol /Bendroflumethiazide 40/5 and 80/5 mg Tablets
    
    Corzide®Oxybutynin Chloride 5 and 10 mg ER Tablets (1a)
    
    Ditropan XL®Dipyridamole 25, 50, 75 mg Tablets USP
    
    Persantine®2008Primidone 50 and 250 mg Tablets
    
    Mysoline®Promethazine 12.5, 25 and 50 mg Tablets (2 separate ANDAs)
    
    Phenergan®Fenofibrate 54 and 160 mg Tablets
    
    Lofibra®Bupropion Hydrochloride 150 mg ER Tablets (1b) (once daily)
    
    Wellbutrin XL®2009Acarbose 25, 50 and 100 mg Tablets
    
    Precose®Divalproex Sodium ER 250 and 500 mg Tablets
    
    Depakote® ERGalantamine 8, 16 and 24 mg Capsules
    
    Razadyne® ER2010Tamsulosin Hydrochloride 0.4 mg Capsules
    
    Flomax®Doxycycline Hyclate DR 75, and 100 mg Tablets
    
    Doryx®Digoxin 125 and 250 mcg Tablets
    
    Lanoxin®
 (1)
    
    Multiple products filed under same ANDA, including (i) 1a: Oxybutynin Chloride products, (ii)
1b: Bupropion Hydrochloride products, and (iii) 1c: Omeprazole products.
  3




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Product
    
    Generic ofColesevelam 625 mg Tablets
    
    Welchol®Colesevelam Powder 3.75 g
    
    Welchol®Cyclobenzaprine CD 15 and 30 mg Capsules
    
    Amrix®Doxycycline Hyclate DR 150 mg Tablets
    
    Doryx®Doxycycline USP 40 mg Capsules
    
    Oracea®Duloxetine HCI 20, 30 and 60 mg DR Capsules
    
    Cymbalta®Ezetimibe Simvastatin 10mg / 10, 20, 40, 80 mg
    
    Vytorin®Fenofibrate 48 and 145mg Tablets
    
    Tricor®Fenofibrate Tab 40, 120mg
    
    Fenoglide®Fenofibric Acid 45, 135 mg
    
    Trilipix®Guanfacine ER 1, 2, 3, 4mg
    
    Intuniv®Methylphenidate HCI 18, 27, 36 and 54 mg ER Tablets
    
    Concerta®Niacin ER / Simvastatin 1000/20mg Tab
    
    Simcor®Ropinirole ER 2, 3, 4, 6, 8, 12mg Tablets
    
    Requip XL®Sevelamer Carbonate 800mg Tablets
    
    Renvela®Sevelamer HCI 400 and 800 mg Tablets
    
    Renagel®
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Impax Division
      5




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Alliance and Collaboration Agreements
  Global Division  Alliance and Collaboration Agreements
 License and Distribution Agreement with Shire
 ®
 Rx Partner and OTC Partner Alliance Agreements
  Year Ended December 31,$s in 000s
    
    2010
    
    
    2009
    
    
    2008Gross Revenue and % Gross RevenueRx Partner
    
    $
    217,277
    
    
    
    18
    %
    
    $
    33,835
    
    
    
    6
    %
    
    $
    81,778
    
    
    
    28
    %OTC Partner
    
    $
    8,888
    
    
    
    1
    %
    
    $
    6,842
    
    
    
    1
    %
    
    $
    15,946
    
    
    
    5
    %
 Rx Partner Alliance Agreement with Teva
  
    
    Wellbutrin SR® 100 and 150 mg extended release tablets
    
    Zyban® 150 mg extended release tablets
    
    Claritin-D® 12-hour 120 mg 12-hour extended release tablets
    
    Claritin-D® 24-hour 240 mg 24-hour extended release tablets
    
    Claritin Reditabs® 10 mg orally disintegrating tablets
    
    Ditropan XL® 5, 10 and 15 mg extended release tablets
  6




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
    
    Glucophage XR® 500 mg extended release tablets
    
    Concerta® 18, 27, 36 and 54 mg extended release tablets
    
    Wellbutrin XL® 150 and 300 mg extended release tablets
 ® ® ® ® ®
   OTC Partner Alliance Agreements
 ® ®
 ® ®
  7




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Upfront andAggregate
    
    
    MilestoneUpfront
    
    
    Milestone
    
    
    PaymentsOTC Partner
    
    Initial Date
    
    
    Payment
    
    
    Payments
    
    
    Received(unaudited and $ in 000s)Merck
    
    June 2002
    
    $
    2,250
    
    
    $
    2,250
    
    
    $
    4,500Pfizer
    
    June 2002
    
    $
    350
    
    
    $
    4,050
    
    
    $
    2,000
 Research Partner Alliance Agreement
 ® ®
 Impax Division  Alliance and Collaboration Agreements
 License, Development and Commercialization Agreement with Glaxo Group Limited
  Co-Promotion Agreement with Pfizer Inc.
 ® ®
  8




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Development and Co-Promotion Agreement with Endo Pharmaceuticals Inc.
  Our Controlled-Release Technology
   Competition
   
    
    the ability to introduce generic versions of products promptly after a patent
expires;
    
    price;
    
    product quality;
    
    customer service (including maintenance of inventories for timely delivery);
    
    the ability to identify and market niche products.
   9




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Sales and Marketing
  Manufacturing and Distribution
      10




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Raw Materials
  ® ®
  Quality Control
    Research and Development
    11




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Regulation
   New Drug Application (NDA).
 Abbreviated New Drug Application (ANDA).
    12




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13




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Environmental Laws
  Available Information
  Corporate and Other Information
   Employees
   14




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Executive Officers
  Name
    
    Age
    
    Positions with ImpaxArthur A. Koch, Jr.
    
    
    57
    
    
    Senior Vice President, Finance, and Chief
Financial OfficerCharles V. Hildenbrand
    
    
    59
    
    
    Senior Vice President, OperationsMichael J. Nestor
    
    
    58
    
    
    President, Impax Pharmaceuticals Division
 Arthur A. Koch, Jr.
 Charles V. Hildenbrand
 Michael J. Nestor
  15




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Item 1A.
    
    Risk Factors
  Risks Related to Our Business
 Unstable economic conditions may adversely affect our industry, business, financial position and
results of operations.
    If we fail to maintain an effective system of internal control over financial reporting, we may not
be able to accurately report our financial results, timely file our periodic reports, maintain our
reporting status or prevent fraud.
    16




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Our revenues and operating income could fluctuate significantly.
  
    
    the timing of FDA approvals we receive;
    
    the timing of process validation for particular drug products;
    
    the timing of product launches, and market acceptance of such products launched;
    
    changes in the amount we spend to research, develop, acquire, license or promote new
products;
    
    the outcome of our clinical trial programs;
    
    serious or unexpected health or safety concerns with our products, the brand products we
have genericized, or our product candidates;
    
    the introduction of new products by others that render our products obsolete or
noncompetitive;
    
    the ability to maintain selling prices and gross margins on our products;
    
    the outcome of our patent infringement litigation, and other litigation matters, and
expenditures as a result of such litigation;
    
    the ability to comply with complex governmental regulations which deal with many aspects
of our business;
    
    changes in coverage and reimbursement policies of health plans and other health insurers,
including changes to Medicare, Medicaid and similar state programs;
    
    increases in the cost of raw materials used to manufacture our products;
    
    manufacturing and supply interruptions, including failure to comply with manufacturing
specifications;
    
    the ability of our brand license partner(s) to secure regulatory approval, gain market
share, sales volume, and sales milestone levels;
    
    timing of revenue recognition related to our alliance and collaboration agreements;
    
    the ability to protect our intellectual property and avoid infringing the intellectual
property of others; and
    
    the addition or loss of customers.
 ® ® ® ®
  17




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Our continued growth is dependent on our ability to continue to successfully introduce new products
to the market.
  A substantial portion of our total revenues is derived from sales to a limited number of customers.
   A substantial portion of our total revenues is derived from sales of a limited number of products.
   18




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We face intense competition from both brand-name and generic manufacturers.
  
    
    proprietary processes or delivery systems;
    
    larger research and development and marketing staffs;
    
    larger production capabilities in a particular therapeutic area;
    
    more experience in preclinical testing and human clinical trials;
    
    more experience in obtaining required regulatory approvals, including FDA approval;
    
    more products; or
    
    more experience in developing new drugs and financial resources, particularly with
regard to brand manufacturers.
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We have experienced operating losses and negative cash flow from operations in the past, and our
future profitability is uncertain.
  
    
    obtain FDA approval of our products;
    
    successfully launch new products;
    
    prevail in patent infringement litigation in which we are involved;
    
    continue to generate or obtain sufficient capital on acceptable terms to fund our
operations; and
    
    comply with the many complex governmental regulations that deal with virtually every
aspect of our business activities.
 Any delays or unanticipated expenses in connection with the operation of our Taiwan facility could
have a material adverse effect on our results of operations, liquidity and financial condition.
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Our business is subject to the economic, political, legal and other risks of maintaining facilities
and conducting clinical trials in foreign countries.
  We are routinely subject to patent litigation that can delay or prevent our commercialization of
products, force us to incur substantial expense to defend, and expose us to substantial liability.
  ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®
  21




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Our ability to develop or license, or otherwise acquire, and introduce new products on a timely
basis in relation to our competitors product introductions involves inherent risks and
uncertainties.
  Our approved products may not achieve expected levels of market acceptance.
  
    
    the availability of alternative products from our competitors;
    
    the prices of our products relative to those of our competitors;
    
    the timing of our market entry;
    
    the ability to market our products effectively at the retail level;
    
    the perception of patients and the healthcare community, including third-party
payors, regarding the safety, efficacy and benefits of our drug products compared to
those of competing products; and
    
    the acceptance of our products by government and private formularies.
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We expend a significant amount of resources on research and development efforts that may not lead
to successful product introductions or the recovery of our research and development expenditures.
   The time necessary to develop generic drugs may adversely affect whether, and the extent to which,
we receive a return on our capital.
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Approvals for our new generic drug products may be delayed or become more difficult to obtain if
the FDA institutes changes to its approval requirements.
  Our inexperience in conducting clinical trials and submitting NDAs could result in delays or
failure in development and commercialization of our own branded products, which could have a
material adverse effect on our results of operations, liquidity, and financial condition.
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The risks and uncertainties inherent in conducting clinical trials could delay or prevent the
development and commercialization of our own branded products, which could have a material adverse
effect on our results of operations, liquidity, financial condition, and growth prospects.
   
    
    delays in patient enrollment, and variability in the number and types of patients
available for clinical trials;
    
    regulators or institutional review boards may not allow us to commence or continue a
clinical trial;
    
    our inability, or the inability of our partners, to manufacture or obtain from third
parties materials sufficient to complete our clinical trials;
    
    delays or failure in reaching agreement on acceptable clinical trial contracts or
clinical trial protocols with prospective clinical trial sites;
    
    risks associated with trial design, which may result in a failure of the trial to
show statistically significant results even if the product candidate is effective;
    
    difficulty in maintaining contact with patients after treatment commences, resulting
in incomplete data;
    
    poor effectiveness of product candidates during clinical trials;
    
    safety issues, including adverse events associated with product candidates;
    
    the failure of patients to complete clinical trials due to adverse side effects,
dissatisfaction with the product candidate, or other reasons;
    
    governmental or regulatory delays or changes in regulatory requirements, policy and
guidelines; and
    
    varying interpretation of data by the FDA or foreign regulatory agencies.
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We rely on our license partner for regulatory filing and commercialization of IPX066 outside of the
United States and Taiwan
  We rely on third parties to conduct clinical trials for our product candidates, and if they do not
properly and successfully perform their legal and regulatory obligations, as well as their
contractual obligations to us, we may not be able to obtain regulatory approvals for our product
candidates.
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We are dependent on a small number of suppliers for our raw materials that we use to manufacture
our products.
  
    
    greater possibility for disruption due to transportation or communication problems;
    
    the relative instability of some foreign governments and economies;
    
    interim price volatility based on labor unrest, materials or equipment shortages,
export duties, restrictions on the transfer of funds, or fluctuations in currency
exchange rates; and
    
    uncertainty regarding recourse to a dependable legal system for the enforcement of
contracts and other rights.
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We may be adversely affected by alliance, collaboration, supply, or license and distribution
agreements we enter into with other companies.
   We depend on qualified scientific and technical employees, and our limited resources may make it
more difficult to attract and retain these personnel.
   We are subject to significant costs and uncertainties related to compliance with the extensive
regulations that govern the manufacturing, labeling, distribution, and promotion of pharmaceutical
products as well as environmental, safety and health regulations.
    28




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We may experience reductions in the levels of reimbursement for pharmaceutical products by
governmental authorities, HMOs or other third-party payers. Any such reductions could have a
material adverse effect on our business, financial position and results of operations.
  Reporting and payment obligations under the Medicaid rebate program and other government programs
are complex, and failure to comply could result in sanctions and penalties or we could be required
to reimburse the government for underpayments, which could have a material adverse affect on our
business.
  Legislative or regulatory programs that may influence prices of prescription drugs could have a
material adverse effect on our business.
   29




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Our failure to comply with the legal and regulatory requirements governing the healthcare industry
may result in substantial fines, sanctions and restrictions on our business activities.
     30




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We have entered into, and anticipate entering into, contracts with various U.S. government
agencies. Unfavorable provisions in government contracts, some of which may be customary, may harm
our business, financial condition and operating results.
  
    
    suspend or debar the contractor from doing business with the government or a specific
government agency;
    
    terminate existing contracts, in whole or in part, for any reason or no reason;
    
    reduce the scope and value of contracts;
    
    change certain terms and conditions in contracts;
    
    claim rights to products, including intellectual property, developed under the contract;
    
    take actions that result in a longer development timeline than expected;
    
    direct the course of a development program in a manner not chosen by the government
contractor;
    
    audit and object to the contractors contract-related costs and fees, including allocated
indirect costs; and
    
    control and potentially prohibit the export of the contractors products.
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Legislative or regulatory reform of the healthcare system in the United States may harm our future
business.
  
    
    revisions to the Medicaid rebate program by: (a) increasing the rebate percentage for
branded drugs dispensed after December 31, 2009 to 23.1% of the average manufacturer price
(AMP), with limited exceptions, (b) increasing the rebate for outpatient generic,
multiple source drugs dispensed after December 31, 2009 to 13% of AMP; (c) changing the
definition of AMP; and (d) effective January 1, 2011, the Medicaid rebate program will be
extended to Medicaid managed care plans, with limited exception;
    
    the imposition of annual fees upon manufacturers or importers of branded prescription
drugs, which fees will be in amounts determined by the Secretary of Treasury based upon
market share and other data;
    
    providing a 50% discount on brand-name prescriptions filled in the Medicare Part D
coverage gap beginning in 2011;
    
    imposing increased penalties for the violation of fraud and abuse laws and funding for
anti-fraud activities;
    
    creating a new pathway for approval of biosimilar biological products and granting an
exclusivity period of 12 years for branded drug manufacturers of biological products before
biosimilar products can be approved for marketing in the U.S.; and
    
    expands the definition of covered entities that purchase certain outpatient drugs in
the 340B Drug Pricing Program of Section 340B of the Public Health Service Act.
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We depend on our intellectual property, and our future success is dependent on our ability to
protect our intellectual property and not infringe on the rights of others.
  
    
    any of our future processes or products will be patentable;
    
    our processes or products will not infringe upon the patents of third parties; or
    
    we will have the resources to defend against charges of patent infringement by third
parties or to protect our own rights against infringement by third parties.
  We are subject to potential product liability claims that can result in substantial litigation
costs and liability.
  We face risks relating to our goodwill and intangibles.
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If we are unable to manage our growth, our business will suffer.
  The terms of our revolving credit facility impose financial and operating restrictions on us.
  
    
    incur additional indebtedness and grant liens on assets;
    
    make certain investments and restricted payments (including the ability to pay
dividends and repurchase stock);
    
    undertake certain acquisitions or sell certain assets; and
    
    enter into certain transactions with our affiliates.
   There are inherent uncertainties involved in estimates, judgments and assumptions used in the
preparation of financial statements in accordance with GAAP. Any future changes in estimates,
judgments and assumptions used or necessary revisions to prior estimates; judgments or assumptions
could lead to a restatement of our results.
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Terrorist attacks and other acts of violence or war may adversely affect our business.
   Because of the location of our manufacturing and research and development facilities, our
operations could be interrupted by an earthquake or be susceptible to climate changes.
    35




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Risks Related to Our Stock
 Our stock price is volatile.
   
    
    our ability to maintain compliance with SEC reporting requirements;
    
    our ability to maintain the listing of our common stock on The NASDAQ Stock Market
LLC;
    
    investor perception of us;
    
    analyst recommendations;
    
    market conditions relating to specialty pharmaceutical companies;
    
    announcements of new products by us or our competitors;
    
    publicity regarding actual or potential developments relating to products under
development by us or our competitors;
    
    developments, disputes or litigation concerning patent or proprietary rights;
    
    delays in the development or approval of our product candidates;
    
    regulatory developments;
    
    period to period fluctuations in our financial results and those of our competitors;
    
    future sales of substantial amounts of common stock by stockholders; and
    
    economic and other external factors.
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We have adopted certain provisions that may have the effect of hindering, delaying or preventing
third party takeovers, which may prevent our stockholders from receiving premium prices for shares
of their common stock in an unsolicited takeover.
     We do not pay dividends on our common stock and do not anticipate doing so in the foreseeable
future.
   37




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Item 1B.
    
    Unresolved Staff Comments
  
 Item 2.
    
    Properties
     38




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Item 3.
    
    Legal Proceedings
 Patent Infringement Litigation
 Aventis Pharmaceuticals Inc., et al. v. Impax Laboratories, Inc. (Fexofenadine
/Pseudoephedrine)
 ® ® ®
 ® ® ®
 Pfizer Inc., et aI. v. Impax Laboratories, Inc. (Tolterodine)
 ® Pfizer Inc. et al. v. Teva
Pharmaceuticals USA, Inc. Pfizer
 Eli Lilly and Company v. Impax Laboratories, Inc. (Duloxetine)
 ®
  39




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Warner Chilcott, Ltd. et.al. v. Impax Laboratories, Inc. (Doxycycline Hyclate)
 ®
 Eurand, Inc., et al. v. Impax Laboratories, Inc. (Cyclobenzaprine)
 ®
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Hydrochloride)
 ®
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Carbonate)
 ®
 The Research Foundation of State University of New York et al. v. Impax Laboratories, Inc.
(Doxycycline Monohydrate)
 ®
 Elan Pharma International Ltd. and Fournier Laboratories Ireland Ltd. v. Impax Laboratories,
Inc. and Abbott Laboratories and Laboratories Fournier S.A. v. Impax Laboratories, Inc.
(Fenofibrate)
 ®
  40




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##### Table of Contents



Daiichi Sankyo, Inc. et al. v. Impax Laboratories, Inc. (Colesevelam)
 ®
 Abbott Laboratories, et al. v. Impax Laboratories, Inc. (Choline Fenofibrate)
 ®
 Shionogi Pharma, Inc. and LifeCycle Pharma A/S v. Impax Laboratories, Inc. (Fenofibrate)
 ®
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Carbonate Powder)
 ®
 Schering Corp., et al. v. Impax Laboratories, Inc. (Ezetimibe/Simvastatin)
 ®
 Abbott Laboratories, et al. v. Impax Laboratories, Inc. (Niacin-Simvastatin)
 ®
 Alza Corp., et al. v. Impax Laboratories, Inc., et al. (Methylphenidate)
 ®
  41




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##### Table of Contents



Daiichi Sankyo, Inc. et al. v. Impax Laboratories, Inc. (Colesevelam Powder)
 ®
 Shire LLC, et al. v. Impax Laboratories, Inc., et al. (Guanfacine)
 ®
  42




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##### Table of Contents



Other Litigation Related to Our Business
 Budeprion XL Litigation
 Kelly v. Teva Pharmaceuticals Indus. Ltd, et al. Morgan v. Teva Pharmaceuticals Indus. Ltd, et a Weber v. Teva Pharmaceuticals Indus., Ltd., et al. Rosenfeld v. Teva Pharmaceuticals USA, Inc.. et al. Henchenski and Vogel v. Teva Pharmaceuticals Industries
Ltd., et al. Anderson v. Teva Pharmaceuticals
Indus., Ltd., et al. Brown et al. v. Teva Pharmaceuticals
Inds., Ltd., et al. Latvala et al. v. Teva Pharmaceuticals
Inds., Ltd., et al. Jordan v. Teva Pharmaceuticals Indus. Ltd
et al. Leighty v. Teva
Pharmaceuticals Indus. Ltd et al. ®
 Impax Laboratories, Inc. v. Shire LLC and Shire Laboratories, Inc. (generic Adderall XR)
 ®
  43




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##### Table of Contents



Insurance
  
 Item 4.
    
    (Removed and Reserved)
  44




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##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Stock Price
  Price Rangeper ShareHigh
    
    
    LowYear Ending December 31, 2010First Quarter
    
    $
    18.15
    
    
    $
    12.87Second Quarter
    
    $
    22.39
    
    
    $
    7.20Third Quarter
    
    $
    20.12
    
    
    $
    14.70Fourth Quarter
    
    $
    22.00
    
    
    $
    17.61Year Ended December 31, 2009First Quarter
    
    $
    7.74
    
    
    $
    2.50Second Quarter
    
    $
    7.75
    
    
    $
    4.68Third Quarter
    
    $
    9.35
    
    
    $
    6.81Fourth Quarter
    
    $
    13.97
    
    
    $
    8.30
  ® ® ®
 Holders
   45




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##### Table of Contents



Dividends
  Unregistered Sales of Securities
  Purchases of Equity Securities by the Issuer
  TotalNumber ofShares (or
    
    
    MaximumUnits)
    
    
    Number (orPurchased
    
    
    Approximate Dollaras Part of
    
    
    Value) of Shares (orTotal
    
    
    
    
    
    Publicly
    
    
    Units) that May YetNumber of Shares
    
    Average
    
    
    Announced
    
    
    Be Purchased Under(or Units)
    
    Price Paid Per
    
    
    Plans or
    
    
    the Plans orPeriod
    
    Purchased(1)
    
    Share (or Unit)
    
    
    Programs
    
    
    ProgramsOctober 1, 2010 to October 31, 2010
    
    34,492 shares of common stock
    
    $
    21.38
    
    
    
    
    
    
    
    November 1, 2010 to November 30, 2010
    
    8,587 shares of common stock
    
    $
    18.97
    
    
    
    
    
    
    
    December 1, 2010 to December 31, 2010
    
    3,024 shares of common stock
    
    $
    18.65
    
    
    
    
    
    
    
    
 (1)
    
    Represents shares of our common stock that we accepted during the indicated periods as a tax
withholding from certain of our employees in connection with the vesting of shares of
restricted stock pursuant to the terms of our Amended and Restated 2002 Equity Incentive Plan
(the 2002 Plan).  46




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##### Table of Contents



Equity Compensation Plans
  Number ofSecuritiesRemainingAvailable forNumber of
    
    
    
    
    
    
    Future IssuanceSecurities to be
    
    
    
    
    
    
    Under EquityIssued Upon
    
    
    Weighted Average
    
    
    CompensationExercise of
    
    
    Exercise Price of
    
    
    Plans (ExcludingOutstanding
    
    
    Outstanding
    
    
    Securities reflectedOptions, Warrants
    
    
    Options, Warrants
    
    
    inand Rights
    
    
    and Rights
    
    
    Column (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation plans approved by
security holders
    
    
    6,514,676
    (1)
    
    $
    10.84
    
    
    
    2,674,061Equity compensation plans not
approved by security holders
    
    
    
    
    
    
    
    
    
    
    283,481
    (2)Total:
    
    
    6,514,676
    
    
    $
    10.84
    
    
    
    2,957,542
 (1)
    
    Represents options issued pursuant to the 2002 Plan, and the Impax Laboratories Inc. 1999
Equity Incentive Plan.(2)
    
    Represents 283,481 shares of common stock available for future issuance under the Impax
Laboratories, Inc. 2001 Non-Qualified Employee Stock Purchase Plan.   47




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##### Table of Contents



Item 6.
    
    Selected Financial Data
   For the Years Ended December 31($ in 000s, except per share data)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Statements of Operations Data:Total revenues
    
    $
    879,509
    
    
    $
    358,409
    
    
    $
    210,071
    
    
    $
    273,753
    
    
    $
    135,246Research and development
    
    
    86,223
    
    
    
    63,274
    
    
    
    59,237
    
    
    
    39,992
    
    
    
    29,635Total operating expenses
    
    
    145,939
    
    
    
    117,683
    
    
    
    114,179
    
    
    
    89,590
    
    
    
    74,245Income (loss) from operations
    
    
    393,324
    
    
    
    70,413
    
    
    
    3,923
    
    
    
    76,507
    
    
    
    (11,247
    )Net income (loss)
    
    
    250,418
    
    
    
    50,061
    
    
    
    15,987
    
    
    
    125,410
    
    
    
    (12,044
    )Net income (loss) per share  basic
    
    $
    4.04
    
    
    $
    0.83
    
    
    $
    0.27
    
    
    $
    2.13
    
    
    $
    (0.20
    )Net income (loss) per share  diluted
    
    $
    3.82
    
    
    $
    0.82
    
    
    $
    0.26
    
    
    $
    2.05
    
    
    $
    (0.20
    )
 As of December 31($ in 000s)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Balance Sheet Data:Cash, cash equivalents and
short-term investments
    
    $
    348,401
    
    
    $
    90,369
    
    
    $
    119,985
    
    
    $
    143,496
    
    
    $
    29,834Working capital
    
    
    394,287
    
    
    
    170,143
    
    
    
    126,784
    
    
    
    110,108
    
    
    
    81,919Total assets
    
    
    693,318
    
    
    
    660,756
    
    
    
    514,287
    
    
    
    513,745
    
    
    
    343,888Long-term debt
    
    
    
    
    
    
    
    
    
    
    5,990
    
    
    
    16,061
    
    
    
    89,603Total liabilities
    
    
    185,169
    
    
    
    438,529
    
    
    
    354,637
    
    
    
    377,697
    
    
    
    347,864Retained earnings (deficit)
    
    
    251,246
    
    
    
    828
    
    
    
    (49,233
    )
    
    
    (65,220
    )
    
    
    (186,215
    )Total stockholders equity (deficit)
    
    $
    508,149
    
    
    $
    222,227
    
    
    $
    159,650
    
    
    $
    136,048
    
    
    $
    (3,976
    )
  48




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##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
 General
      49




---



##### Table of Contents



® ® ® ®
  50




---



##### Table of Contents



Impact of Economic and Regulatory Conditions
   51




---



##### Table of Contents



Critical Accounting Estimates
   Global Product sales, net.
   52




---



##### Table of Contents



Chargebacks.
 As of December 31,Chargeback reserve
    
    2010
    
    
    2009
    
    
    2008($ in 000s)Beginning balance
    
    $
    21,448
    
    
    $
    4,056
    
    
    $
    2,977Provision recorded during the period
    
    
    181,566
    
    
    
    126,105
    
    
    
    50,144Credits issued during the period
    
    
    (188,096
    )
    
    
    (108,713
    )
    
    
    (49,065
    )Ending balance
    
    $
    14,918
    
    
    $
    21,448
    
    
    $
    4,056Provision as a percent of gross Global Product sales
    
    
    19
    %
    
    
    24
    %
    
    
    28
    %
 ®
 ®
  53




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##### Table of Contents



Rebates.
  As of December 31,Rebate reserve
    
    2010
    
    
    2009
    
    
    2008($ in 000s)Beginning balance
    
    $
    37,781
    
    
    $
    4,800
    
    
    $
    3,603Provision recorded during the period
    
    
    91,064
    
    
    
    72,620
    
    
    
    20,361Credits issued during the period
    
    
    (107,953
    )
    
    
    (39,639
    )
    
    
    (19,164
    )Ending balance
    
    $
    20,892
    
    
    $
    37,781
    
    
    $
    4,800Provision as a percent of gross Global Product sales
    
    
    9
    %
    
    
    14
    %
    
    
    11
    %
 ® ® ®
 ®
  54




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##### Table of Contents



Returns.
 As of December 31,Returns reserve
    
    2010
    
    
    2009
    
    
    2008($ in 000s)Beginning balance
    
    $
    22,114
    
    
    $
    13,675
    
    
    $
    14,261Provision recorded during the period
    
    
    15,821
    
    
    
    11,847
    
    
    
    5,719Credits issued during the period
    
    
    (4,180
    )
    
    
    (3,408
    )
    
    
    (6,305
    )Ending balance
    
    $
    33,755
    
    
    $
    22,114
    
    
    $
    13,675Provision as a percent of gross Global Product sales
    
    
    1.6
    %
    
    
    2.3
    %
    
    
    3.2
    %
 ®
  55




---



##### Table of Contents



Medicaid. ®
 Shelf-Stock Adjustments.
 Allowance for Uncollectible Amounts
 Private Label Sales. TM
  56




---



##### Table of Contents



Rx Partner and OTC Partner.
    57




---



##### Table of Contents



Research Partner
 Promotional Partner
  58




---



##### Table of Contents



Estimated Lives of Alliance and Collaboration Agreements.
     59




---



##### Table of Contents



Third-Party Research Agreements.
 Share-Based Compensation.
  60




---



##### Table of Contents



Income Taxes.
 Fair Value of Financial Instruments.
 Contingencies.
  61




---



##### Table of Contents



Goodwill.
 Adoption of FASB ASC Topic 470
   62




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##### Table of Contents



Results of Operations
 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
 Overview:
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2010
    
    
    2009
    
    
    $
    
    
    %Total revenues
    
    $
    879,509
    
    
    $
    358,409
    
    
    $
    521,100
    
    
    
    145
    %Gross profit
    
    
    539,263
    
    
    
    188,096
    
    
    
    351,167
    
    
    
    187
    %Income from operations
    
    
    393,324
    
    
    
    70,413
    
    
    
    322,911
    
    
    
    459
    %Income before income taxes
    
    
    393,879
    
    
    
    70,977
    
    
    
    322,902
    
    
    
    455
    %Provision for income taxes
    
    
    143,521
    
    
    
    21,006
    
    
    
    122,515
    
    
    
    583
    %250,358
    
    
    
    49,971
    
    
    
    200,387
    
    
    
    401
    %Non-controlling interest
    
    
    60
    
    
    
    90
    
    
    
    (30
    )
    
    
    (33
    )%Net income
    
    $
    250,418
    
    
    $
    50,061
    
    
    $
    200,357
    
    
    
    400
    %
 Net Income
 ® ® ® ® ®
  63




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##### Table of Contents



Global Division
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2010
    
    
    2009
    
    
    $
    
    
    %RevenuesGlobal Product sales, net
    
    $
    622,889
    
    
    $
    287,079
    
    
    $
    335,810
    
    
    
    117
    %Private Label product sales
    
    
    2,074
    
    
    
    5,513
    
    
    
    (3,439
    )
    
    
    (62
    )%Rx Partner
    
    
    217,277
    
    
    
    33,835
    
    
    
    183,442
    
    
    
    542
    %OTC Partner
    
    
    8,888
    
    
    
    6,842
    
    
    
    2,046
    
    
    
    30
    %Research Partner
    
    
    13,539
    
    
    
    11,680
    
    
    
    1,859
    
    
    
    16
    %Other
    
    
    
    
    
    
    12
    
    
    
    (12
    )
    
    
    (100
    )%Total revenues
    
    
    864,667
    
    
    
    344,961
    
    
    
    519,706
    
    
    
    151
    %Cost of revenues
    
    
    328,163
    
    
    
    158,270
    
    
    
    169,893
    
    
    
    107
    %Gross profit
    
    
    536,504
    
    
    
    186,691
    
    
    
    349,813
    
    
    
    187
    %Operating expenses:Research and development
    
    
    44,311
    
    
    
    38,698
    
    
    
    5,613
    
    
    
    15
    %Patent litigation
    
    
    6,384
    
    
    
    5,379
    
    
    
    1,005
    
    
    
    19
    %Selling, general and administrative
    
    
    15,951
    
    
    
    10,891
    
    
    
    5,060
    
    
    
    46
    %Total operating expenses
    
    
    66,646
    
    
    
    54,968
    
    
    
    11,678
    
    
    
    21
    %Income from operations
    
    $
    469,858
    
    
    $
    131,723
    
    
    
    338,135
    
    
    
    257
    %
 Revenues
  ® ® ®
  ®
  64




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##### Table of Contents



®
  Cost of Revenues
 ®
 Gross Profit
 ®
 Research and Development Expenses
  Patent Litigation Expenses
  Selling, General and Administrative Expenses
   65




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##### Table of Contents



Impax Division
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2010
    
    
    2009
    
    
    $
    
    
    %Promotional Partner revenue
    
    $
    14,073
    
    
    $
    13,448
    
    
    
    625
    
    
    
    5
    %Research Partner revenue
    
    
    769
    
    
    
    
    
    
    
    769
    
    
    nmTotal revenue
    
    
    14,842
    
    
    
    13,448
    
    
    
    1,394
    
    
    
    10
    %Cost of revenues
    
    
    12,083
    
    
    
    12,043
    
    
    
    40
    
    
    
    0
    %Gross profit
    
    
    2,759
    
    
    
    1,405
    
    
    
    1,354
    
    
    
    96
    %Operating expenses:Research and development
    
    
    41,912
    
    
    
    24,576
    
    
    
    17,336
    
    
    
    71
    %Selling, general and administrative
    
    
    3,510
    
    
    
    3,469
    
    
    
    41
    
    
    
    1
    %Total operating expenses
    
    
    45,422
    
    
    
    28,045
    
    
    
    17,377
    
    
    
    62
    %Loss from operations
    
    $
    (42,663
    )
    
    $
    (26,640
    )
    
    
    (16,023
    )
    
    
    (60
    )%nm-not meaningful
 Revenues
  Cost of Revenues
  Gross Profit
   66




---



##### Table of Contents



Research and Development Expenses
  Selling, General and Administrative Expenses
   67




---



##### Table of Contents



Corporate and other
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2010
    
    
    2009
    
    
    $
    
    
    %Litigation settlement
    
    $
    
    
    
    $
    9,318
    
    
    
    (9,318
    )
    
    
    (100
    )%General and administrative expenses
    
    
    33,871
    
    
    
    25,352
    
    
    
    8,519
    
    
    
    34
    %Total operating expenses
    
    
    33,871
    
    
    
    34,670
    
    
    
    (799
    )
    
    
    (2
    )%Loss from operations
    
    
    (33,871
    )
    
    
    (34,670
    )
    
    
    799
    
    
    
    2
    %Other (expense) income, net
    
    
    (315
    )
    
    
    57
    
    
    
    (372
    )
    
    
    (653
    )%Interest income
    
    
    1,037
    
    
    
    753
    
    
    
    284
    
    
    
    38
    %Interest expense
    
    
    (167
    )
    
    
    (246
    )
    
    
    79
    
    
    
    32
    %Loss before income taxes
    
    
    (33,316
    )
    
    
    (34,106
    )
    
    
    790
    
    
    
    2
    %Provision for income taxes
    
    $
    143,521
    
    
    $
    21,006
    
    
    
    122,515
    
    
    
    583
    %
 Litigation settlement
  General and administrative expenses
  Other (expense) income, net
  Interest Income
  Interest Expense
   68




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##### Table of Contents



Income Taxes
   69




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##### Table of Contents



Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Overview:
  Year Ended
    
    
    Increase/December 31
    
        December 31

    
    
    (Decrease)(in $000s)
    
    2009
    
    
    2008
    
    
    $
    
    
    %Total revenues
    
    $
    358,409
    
    
    $
    210,071
    
    
    $
    148,338
    
    
    
    71
    %Gross profit
    
    
    188,096
    
    
    
    118,102
    
    
    
    69,994
    
    
    
    59
    %Income from operations
    
    
    70,413
    
    
    
    3,923
    
    
    
    66,490
    
    
    
    nmIncome before income taxes
    
    
    70,977
    
    
    
    26,009
    
    
    
    44,968
    
    
    
    173
    %Provision for income taxes
    
    
    21,006
    
    
    
    10,069
    
    
    
    10,937
    
    
    
    109
    %49,971
    
    
    
    15,940
    
    
    
    34,031
    
    
    
    213
    %Non-controlling interest
    
    
    90
    
    
    
    47
    
    
    
    43
    
    
    
    91
    %Net income
    
    $
    50,061
    
    
    $
    15,987
    
    
    $
    34,074
    
    
    
    213
    %
 nm  not meaningful Net Income
 ® ®
  70




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##### Table of Contents



Global Division
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2009
    
    
    2008
    
    
    $
    
    
    %RevenuesGlobal Product sales, net
    
    $
    287,079
    
    
    $
    96,006
    
    
    $
    191,073
    
    
    
    199
    %Private Label product sales
    
    
    5,513
    
    
    
    2,596
    
    
    
    2,917
    
    
    
    112
    %Rx Partner
    
    
    33,835
    
    
    
    81,778
    
    
    
    (47,943
    )
    
    
    (59
    )%OTC Partner
    
    
    6,842
    
    
    
    15,946
    
    
    
    (9,104
    )
    
    
    (57
    )%Research Partner
    
    
    11,680
    
    
    
    833
    
    
    
    10,847
    
    
    
    nmOther
    
    
    12
    
    
    
    21
    
    
    
    (9
    )
    
    
    (43
    )%Total revenues
    
    
    344,961
    
    
    
    197,180
    
    
    
    147,781
    
    
    
    75
    %Cost of revenues
    
    
    158,270
    
    
    
    80,724
    
    
    
    77,546
    
    
    
    96
    %Gross profit
    
    
    186,691
    
    
    
    116,456
    
    
    
    70,235
    
    
    
    60
    %Operating expenses:Research and development
    
    
    38,698
    
    
    
    42,930
    
    
    
    (4,232
    )
    
    
    (10
    )%Patent litigation
    
    
    5,379
    
    
    
    6,472
    
    
    
    (1,093
    )
    
    
    (17
    )%Selling, general and administrative
    
    
    10,891
    
    
    
    11,445
    
    
    
    (554
    )
    
    
    (5
    )%Total operating expenses
    
    
    54,968
    
    
    
    60,847
    
    
    
    (5,879
    )
    
    
    (10
    )%Income from operations
    
    $
    131,723
    
    
    $
    55,609
    
    
    
    76,114
    
    
    
    137
    %
 nm  not meaningful Revenues
  ® ®
   71




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##### Table of Contents



® ® ® ® ® ® ® ® ®
   Cost of Revenues
 ®
 Gross Profit
 ® ®
 Research and Development Expenses
  Patent Litigation Expenses
  Selling, General and Administrative Expenses
   72




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##### Table of Contents



Impax Division
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2009
    
    
    2008
    
    
    $
    
    
    %Promotional Partner revenue
    
    $
    13,448
    
    
    $
    12,891
    
    
    
    557
    
    
    
    4
    %Cost of revenues
    
    
    12,043
    
    
    
    11,245
    
    
    
    798
    
    
    
    7
    %Gross profit
    
    
    1,405
    
    
    
    1,646
    
    
    
    (241
    )
    
    
    (15
    )%Operating expenses:Research and development
    
    
    24,576
    
    
    
    16,307
    
    
    
    8,269
    
    
    
    51
    %Selling, general and administrative
    
    
    3,469
    
    
    
    2,671
    
    
    
    798
    
    
    
    30
    %Total operating expenses
    
    
    28,045
    
    
    
    18,978
    
    
    
    9,067
    
    
    
    48
    %Loss from operations
    
    $
    (26,640
    )
    
    $
    (17,332
    )
    
    
    (9,308
    )
    
    
    (54
    )%
 Revenues
  Cost of Revenues
  Gross Profit
  Research and Development Expenses
  Selling, General and Administrative Expenses
   73




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##### Table of Contents



Corporate and other
  Year Ended
    
    
    Increase/December 31
    
    
    December 31
    
    
    (Decrease)(in $000s)
    
    2009
    
    
    2008
    
    
    $
    
    
    %(as adjusted)Litigation settlement
    
    $
    9,318
    
    
    $
    
    
    
    
    9,318
    
    
    nm
    %General and administrative expenses
    
    
    25,352
    
    
    
    34,354
    
    
    
    (9,002
    )
    
    
    (26
    )%Total operating expenses
    
    
    34,670
    
    
    
    34,354
    
    
    
    316
    
    
    
    1
    %Loss from operations
    
    
    (34,670
    )
    
    
    (34,354
    )
    
    
    (316
    )
    
    
    (1
    )%Change in fair value of common stock purchase warrant
    
    
    
    
    
    
    1,234
    
    
    
    (1,234
    )
    
    
    (100
    )%Other income, net
    
    
    57
    
    
    
    21,529
    
    
    
    (21,472
    )
    
    
    (100
    )%Loss on repurchase of 3.5% Debentures
    
    
    
    
    
    
    (113
    )
    
    
    113
    
    
    
    100
    %Interest income
    
    
    753
    
    
    
    4,218
    
    
    
    (3,465
    )
    
    
    (82
    )%Interest expense
    
    
    (246
    )
    
    
    (4,782
    )
    
    
    4,536
    
    
    
    95
    %Loss before income taxes
    
    
    (34,106
    )
    
    
    (12,268
    )
    
    
    (21,838
    )
    
    
    (178
    )%Provision for income taxes
    
    $
    21,006
    
    
    $
    10,069
    
    
    
    10,937
    
    
    
    109
    %
 nm  not meaningful Litigation settlement
  General and administrative expenses
  Other income, net
   74




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Interest Income
  Interest Expense
  Income Taxes
   75




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##### Table of Contents



Liquidity and Capital Resources
    Cash and Cash Equivalents
  Cash Flows
 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009.
  ®
  76




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##### Table of Contents



Year Ended December 31, 2009 Compared to Year Ended December 31, 2008.
   ® ®
  77




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78




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##### Table of Contents



Outstanding Debt Obligations
 Senior Lenders; Wells Fargo Bank, N.A.
    
    
    The outstanding principal amount of all revolving credit loans, together with accrued
and unpaid interest thereon, will be due and payable on the maturity date, which will
occur four years following the February 11, 2011 closing date.
 
    
    Borrowings under the Revolving Credit Facility will bear interest, at our option, at
either an Alternate Base Rate (as defined in the Credit Agreement) plus the applicable
margin in effect from time to time ranging from 0.5% to 1.5%, or a LIBOR Rate (as
defined in the Credit Agreement) plus the applicable margin in effect from time to time
ranging from 1.5% to 2.5%. We are also required to pay an unused commitment fee ranging
from 0.25% to 0.45% per annum based on the daily average undrawn portion of the
Revolving Credit Facility. The applicable margin described above and the unused
commitment fee in effect at any given time will be determined based on the Companys
Total Net Leverage Ratio (as defined in the Credit Agreement), which is based upon our
consolidated total debt, net of unrestricted cash in excess of $100 million, compared to
Consolidated EBITDA (as defined in the Credit Agreement) for the immediately preceding
four quarters.
 
    
    We may prepay any outstanding loan under the Revolving Credit Facility without
premium or penalty.
 
    
    We are required under the Credit Agreement and the Security Agreement to comply with
a number of affirmative, negative and financial covenants. Among other things, these
covenants (i) require us to provide periodic reports, notices of material events and
information regarding collateral, (ii) restrict our, subject to certain exceptions and
baskets, to incur additional indebtedness, grant liens on assets, undergo fundamental
changes, change the nature of its business, make investments, undertake acquisitions,
sell assets, make restricted payments (including the ability to pay dividends and
repurchase stock) or engage in affiliate transactions, and (iii) requires us to maintain
a Total Net Leverage Ratio (which is, generally, our total funded debt, net of
unrestricted cash in excess of $100 million, over our EBITDA for the preceding four
quarters) of less than 3.75 to 1.00, a Senior Secured Leverage Ratio (which is,
generally, our total senior secured debt over our EBITDA for the preceding four
quarters) of less than 2.50 to 1.00 and a Fixed Charge Coverage Ratio (which is,
generally, our EBITDA for the preceding four quarters over the sum of cash interest
expense, cash tax payments, scheduled funded debt payments and capital expenditures
during such four quarter period) of at least 2.00 to 1.00 (with each such ratio as more
particularly defined as set forth in the Credit Agreement).
  79




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
    
    The Credit Agreement contains customary events of default (subject to customary grace
periods, cure rights and materiality thresholds), including, among others, failure to
pay principal, interest or fees, violation of covenants, material inaccuracy of
representations and warranties, cross-default and cross-acceleration of material
indebtedness and other obligations, certain bankruptcy and insolvency events, certain
judgments, certain events related to the Employee Retirement Income Security Act of
1974, as amended, and a change of control.
 
    
    Following an event of default under the Credit Agreement, the Administrative Agent
would be entitled to take various actions, including the acceleration of amounts due
under the Credit Agreement and seek other remedies that may be taken by secured
creditors.
    80




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##### Table of Contents



3.5% Debentures
   Subordinated Promissory Note
  Vendor Financing Agreement
 
  81




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##### Table of Contents



Commitments and Contractual Obligations
  Payments Due by PeriodLess
    
    
    
    
    
    
    
    
    
    
    MoreThan 1
    
    
    1-3
    
    
    3-5
    
    
    Than 5($ in 000s)
    
    Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsContractual Obligations (a)Credit Facilities and Long-Term Debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest Expense Payable  Long-Term Debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Open Purchase Order Commitments
    
    
    18,570
    
    
    
    18,570
    
    
    
    
    
    
    
    
    
    
    
    Operating Leases(b)
    
    
    5,866
    
    
    
    1,469
    
    
    
    2,774
    
    
    
    1,623
    
    
    
    Construction Contracts(c)
    
    
    2,060
    
    
    
    2,060
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    26,496
    
    
    $
    22,099
    
    
    $
    2,774
    
    
    $
    1,623
    
    
    $
    
 
 (a)
    
    Liabilities for uncertain tax positions FASB ASC Topic 740, Sub-topic 10, were excluded as we
are not able to make a reasonably reliable estimate of the amount and period of related future
payments. As of December 31, 2010, we had a $1.6 million provision for uncertain tax
positions.(b)
    
    We lease office, warehouse, and laboratory facilities under non-cancelable operating leases
through December 2015. We also lease certain equipment under various non-cancelable operating
leases with various expiration dates through September 2015.(c)
    
    Construction contracts are related to ongoing expansion activities at our manufacturing
facility in Taiwan. Off Balance-Sheet Arrangements
   82




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Recent Accounting Pronouncements
        83




---



##### Table of Contents



84




---



##### Table of Contents



85




---



##### Table of Contents



Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
      
 Item 8.
    
    Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
   86




---



##### Table of Contents



Item 9A.
    
    Controls and Procedures
 Disclosure Controls and Procedures
    87




---



##### Table of Contents



Management Report on Internal Control Over Financial Reporting
    88




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
        
  89




---



##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 Item 9B.
    
    Other Information
   90




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
 Code of Ethics
   
 Item 11.
    
    Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accounting Fees and Services
   91




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##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 (a)(1) Consolidated Financial Statements
  (a)(2) Financial Statement Schedules
   92




---



##### Table of Contents



(a)(3) Exhibits
 Exhibit No.


    Description of Document3.1.1
    


    Restated Certificate of Incorporation, dated August 30, 2004.(1)3.1.2
    


    Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with
the Secretary of State of Delaware on January 21, 2009.(2)3.2
    


    Amended and Restated Bylaws, effective June 29, 2009.(3)4.1
    


    Specimen of Common Stock Certificate.(4)4.2
    


    Form of Debenture (incorporated by reference to Exhibit A to the Indenture, dated as of June
27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee, listed on
Exhibit 4.3)4.3
    


    Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National
Association, as Trustee.(4)4.4
    


    Supplemental Indenture, dated as of July 6, 2005, between the Company and HSBC Bank USA,
National Association, as Trustee.(4)4.5
    


    Registration Rights Agreement, dated as of June 27, 2005, between the Company and the
Initial Purchasers named therein.(4)4.6
    


    Promissory Note dated June 7, 2006, issued by the Company to Solvay Pharmaceuticals, Inc.(4)4.7
    


    Preferred Stock Rights Agreement, dated as of January 20, 2009, by and between the Company
and StockTrans, Inc., as Rights Agent.(2)10.1.1
    


    Amended and Restated Loan and Security Agreement, dated as of December 15, 2005, between the
Company and Wachovia Bank, National Association.(4)10.1.2
    


    First Amendment, dated October 14, 2008, to Amended and Restated Loan and Security
Agreement, dated December 15, 2005, between the Company and Wachovia Bank, National
Association.(5)10.1.3
    


    Second Amendment to Amended and Restated Loan and Security Agreement, effective as of
December 31, 2008, by and among the Company and Wachovia Bank, National Association.(6)10.1.4
    


    Third Amendment to Amended and Restated Loan and Security Agreement, effective as of March
31, 2009, by and among the Company and Wachovia Bank, National Association.(7)10.1.5
    


    Fourth Amendment to Amended and Restated Loan and Security Agreement, effective as of March
12, 2010, by and among the Company and Wachovia Bank, National Association, a Wells Fargo
Company.(8)10.1.6
    


    Fifth Amendment to Amended and Restated Loan and Security Agreement, effective as of June
30, 2010, by and among the Company and Wells Fargo Bank, National Association, successor by
merger to Wachovia Bank, National Association.(9)10.1.7
    


    Sixth Amendment to Amended and Restated Loan and Security Agreement, effective as of
September 30, 2010, by and among the Company and Wells Fargo Bank, National Association,
successor by merger to Wachovia Bank, National Association.(10)10.1.8
    


    Seventh Amendment to Amended and Restated Loan and Security Agreement, effective as of
January 31, 2011, by and among the Company and Wells Fargo Bank, National Association,
successor by merger to Wachovia Bank, National Association.10.2
    


    Purchase Agreement, dated June 26, 2005, between the Company and the Purchasers named
therein.(4)10.3.1
    


    Impax Laboratories Inc. 1999 Equity Incentive Plan.*(6)10.3.2
    


    Form of Stock Option Grant under the Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(6)10.4
    


    Impax Laboratories Inc. 2001 Non-Qualified Employee Stock Purchase Plan.*(4)10.5.1
    


    Impax Laboratories Inc. Amended and Restated 2002 Equity Incentive Plan.*(11)10.5.2
    


    Form of Stock Option Grant under the Impax Laboratories, Inc. Amended and Restated 2002
Equity Incentive Plan.*(6)
  93




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##### Table of Contents



Exhibit No.


    Description of Document10.5.3
    


    Form of Stock Bonus Agreement under the Impax Laboratories, Inc. Amended and Restated 2002
Equity Incentive Plan.*(6)10.6.1
    


    Impax Laboratories Inc. Executive Non-Qualified Deferred Compensation Plan, amended and
restated effective January 1, 2008.*(8)10.6.2
    


    Amendment to Impax Laboratories Inc. Executive Non-Qualified Deferred Compensation Plan,
effective as of January 1, 2009.* (8)10.7.1
    


    Employment Agreement, dated December 14, 1999, by and between the Company and Larry Hsu,
Ph.D.*(5)10.7.2
    


    Amendment No. 1, dated May 19, 2009, to Employment Agreement, dated December 14, 1999, by
and between the Company and Larry Hsu, Ph.D.*(12)10.7.3
    


    Employment Agreement, dated as of January 1, 2010, between the Company and Larry Hsu,
Ph.D.*(13)10.8
    


    Employment Agreement, dated as of January 1, 2010, between the Company and Charles V.
Hildenbrand.*(13)10.9
    


    Employment Agreement, dated as of January 1, 2010, between the Company and Arthur A. Koch,
Jr.*(13)10.10
    


    Employment Agreement, dated as of January 1, 2010, between the Company and Michael J.
Nestor.*(13)10.11.1
    


    Offer of Employment Letter, effective as of January 5, 2009, between the Company and
Christopher Mengler.*(6)10.11.2
    


    Employment Agreement, dated as of January 1, 2010, between the Company and Christopher
Mengler, R.Ph.*(13)10.11.3
    


    Separation Agreement and General Release, dated October 19, 2010, by and between the Company
and Christopher Mengler, R.Ph.*(14)10.12
    


    License and Distribution Agreement, dated as of January 19, 2006, between the Company and
Shire LLC.**(15)10.13
    


    Joint Development Agreement, dated as of November 26, 2008, between the Company and Medicis
Pharmaceutical Corporation.**(15)10.14
    


    License, Development and Commercialization Agreement, dated as of December 15, 2010, by and
between the Company and Glaxo Group Limited.***10.15
    


    Supply Agreement, dated as of December 15, 2010, by and between the Company and Glaxo Group
Limited.***11.1
    


    Statement re computation of per share earnings (incorporated by reference to Note 17 to the
Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K).21.1
    


    Subsidiaries of the registrant.23.1
    


    Consent of Grant Thornton LLP.
  94




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##### Table of Contents



Exhibit No.


    Description of Document31.1
    


    Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    


    Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    


    Certifications of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    


    Certifications of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract, compensatory plan or arrangement.**
    
    Confidential treatment granted for certain portions of this exhibit pursuant to Rule 24b-2
under the Exchange Act, which portions are omitted and filed separately with the SEC.***
    
    Confidential treatment requested for certain portions of this exhibit pursuant to Rule 24b-2
under the Exchange Act, which portions are omitted and filed separately with the SEC.(1)
    
    Incorporated by reference to Amendment No. 5 to the Companys Registration Statement on Form
10 filed on December 23, 2008.(2)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on January 22,
2009.(3)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on July 2, 2009.(4)
    
    Incorporated by reference to the Companys Registration Statement on Form 10 filed on October
10, 2008.(5)
    
    Incorporated by reference to Amendment No. 2 to the Companys Registration Statement on Form
10 filed on December 2, 2008.(6)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2008.(7)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009.(8)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2010.(9)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010.(10)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended September 30, 2010.(11)
    
    Incorporated by reference to the Companys Definitive Proxy Statement on Schedule 14A filed
on April 14, 2010.(12)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended June 30, 2009.(13)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on January 14,
2010.(14)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on October 22,
2010.(15)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2009.  95




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##### Table of Contents



Impax Laboratories, Inc.  INDEX TO FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    F-3Consolidated Statements of Operations for each of the three years in the period ended
December 31, 2010
    
    
    F-4Consolidated Statements of Changes in Stockholders Equity (Deficit) and
Consolidated Statements of Comprehensive
Income for each of the three years in the period ended December 31, 2010
    
    
    F-5Consolidated Statements of Cash Flows for each of the three years in the period ended
December 31, 2010
    
    
    F-6Notes to Consolidated Financial Statements for each of the three years in the period ended
December 31, 2010
    
    
    F-8Schedule II, Valuation and Qualifying Accounts
    
    
    S-1
  F-1




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##### Table of Contents



Impax Laboratories, Inc.
 
 Report of Independent Registered Public Accounting Firm
 
      /s/ Grant Thornton LLP 
  F-2




---



##### Table of Contents



IMPAX LABORATORIES, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share data)
 December 31,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    91,796
    
    
    $
    31,770Short-term investments
    
    
    256,605
    
    
    
    58,599Accounts receivable, net
    
    
    82,054
    
    
    
    185,854Inventory, net
    
    
    44,549
    
    
    
    49,130Current portion of deferred product manufacturing costs-alliance agreements
    
    
    2,012
    
    
    
    11,624Current portion of deferred income taxes
    
    
    39,271
    
    
    
    32,286Prepaid expenses and other current assets
    
    
    4,407
    
    
    
    4,748Total current assets
    
    
    520,694
    
    
    
    374,011Property, plant and equipment, net
    
    
    106,280
    
    
    
    101,650Deferred product manufacturing costs-alliance agreements
    
    
    8,223
    
    
    
    96,619Deferred income taxes, net
    
    
    5,069
    
    
    
    48,544Other assets
    
    
    25,478
    
    
    
    12,358Goodwill
    
    
    27,574
    
    
    
    27,574Total assets
    
    $
    693,318
    
    
    $
    660,756LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    18,812
    
    
    $
    23,295Accrued expenses
    
    
    72,788
    
    
    
    62,055Accrued income taxes payable
    
    
    2,393
    
    
    
    31,627Accrued profit sharing and royalty expenses
    
    
    14,147
    
    
    
    53,695Current portion of deferred revenue-alliance agreements
    
    
    18,276
    
    
    
    33,196Total current liabilities
    
    
    126,416
    
    
    
    203,868Deferred revenue-alliance agreements
    
    
    44,195
    
    
    
    224,522Other liabilities
    
    
    14,558
    
    
    
    10,139Total liabilities
    
    $
    185,169
    
    
    $
    438,529Commitments and contingencies (Notes 19 and 20)Stockholders equity:Preferred Stock, $0.01 par value, 2,000,000 shares authorized,
0 shares outstanding at December 31, 2010 and 2009
    
    $
    
    
    
    $
    Common stock, $0.01 par value, 90,000,000 shares authorized and
64,721,041 and 62,210,089 shares issued at
December 31, 2010 and 2009, respectively
    
    
    647
    
    
    
    622Additional paid-in capital
    
    
    255,440
    
    
    
    223,239Treasury stock  243,729 shares
    
    
    (2,157
    )
    
    
    (2,157
    )Accumulated other comprehensive income (loss)
    
    
    2,811
    
    
    
    (524
    )Retained earnings
    
    
    251,246
    
    
    
    828507,987
    
    
    
    222,008Noncontrolling interest
    
    
    162
    
    
    
    219Total stockholders equity
    
    
    508,149
    
    
    
    222,227Total liabilities and stockholders equity
    
    $
    693,318
    
    
    $
    660,756
   F-3




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##### Table of Contents



IMPAX LABORATORIES, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (amounts in thousands, except share and per share data)
 Years Ended December 312010
    
    
    2009
    
    
    2008Revenues:Global Product sales, net
    
    $
    622,889
    
    
    $
    287,079
    
    
    $
    96,006Private Label Product sales
    
    
    2,074
    
    
    
    5,513
    
    
    
    2,596Rx Partner
    
    
    217,277
    
    
    
    33,835
    
    
    
    81,778OTC Partner
    
    
    8,888
    
    
    
    6,842
    
    
    
    15,946Research Partner
    
    
    14,308
    
    
    
    11,680
    
    
    
    833Promotional Partner
    
    
    14,073
    
    
    
    13,448
    
    
    
    12,891Other
    
    
    
    
    
    
    12
    
    
    
    21Total revenues
    
    
    879,509
    
    
    
    358,409
    
    
    
    210,071Cost of revenues
    
    
    340,246
    
    
    
    170,313
    
    
    
    91,969Gross profit
    
    
    539,263
    
    
    
    188,096
    
    
    
    118,102Operating expenses:Research and development
    
    
    86,223
    
    
    
    63,274
    
    
    
    59,237Patent litigation
    
    
    6,384
    
    
    
    5,379
    
    
    
    6,472Litigation settlement
    
    
    
    
    
    
    9,318
    
    
    
    Selling, general and administrative
    
    
    53,332
    
    
    
    39,712
    
    
    
    48,470Total operating expenses
    
    
    145,939
    
    
    
    117,683
    
    
    
    114,179Income from operations
    
    
    393,324
    
    
    
    70,413
    
    
    
    3,923Change in fair value of common stock
purchase warrant
    
    
    
    
    
    
    
    
    
    
    1,234Loss on repurchase of 3.5% Debentures
    
    
    
    
    
    
    
    
    
    
    (113
    )Other (expense) income, net
    
    
    (315
    )
    
    
    57
    
    
    
    21,529Interest income
    
    
    1,037
    
    
    
    753
    
    
    
    4,218Interest expense
    
    
    (167
    )
    
    
    (246
    )
    
    
    (4,782
    )Income before income taxes
    
    
    393,879
    
    
    
    70,977
    
    
    
    26,009Provision for income taxes
    
    
    143,521
    
    
    
    21,006
    
    
    
    10,069Net income before noncontrolling interest
    
    
    250,358
    
    
    
    49,971
    
    
    
    15,940Add back loss attributable to noncontrolling interest
    
    
    60
    
    
    
    90
    
    
    
    47Net income
    
    $
    250,418
    
    
    $
    50,061
    
    
    $
    15,987Net Income per share:Basic
    
    $
    4.04
    
    
    $
    0.83
    
    
    $
    0.27Diluted
    
    $
    3.82
    
    
    $
    0.82
    
    
    $
    0.26Weighted average common shares outstanding:Basic
    
    
    62,037,908
    
    
    
    60,279,602
    
    
    
    59,072,752Diluted
    
    
    65,565,132
    
    
    
    61,080,184
    
    
    
    60,782,721
   F-4




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##### Table of Contents



IMPAX LABORATORIES, INC.
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2010
 (amounts in thousands)
 Retained
    
    
    AccumulatedAdditional
    
    
    
    
    
    
    Earnings/
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Treasury
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    NoncontrollingStockholders Equity
    
    Shares
    
    
    Par Value
    
    
    Capital
    
    
    Stock
    
    
    Deficit)
    
    
    Income
    
    
    Interest
    
    
    TotalBalance at
December 31, 2007
    
    
    58,822
    
    
    $
    591
    
    
    $
    202,715
    
    
    $
    (2,157
    )
    
    $
    (65,220
    )
    
    $
    (26
    )
    
    
    145
    
    
    $
    136,0482008Exercise of common stock purchase
warrants and stock options,
issuance of restricted stock and
sale of common stock under ESPP
    
    
    994
    
    
    
    10
    
    
    
    1,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,039Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    5,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,817Issuance of common stock
    
    
    76
    
    
    
    1
    
    
    
    643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    644Reversal of deferred tax liability on
3.5% Debenture conversion option
as a result of repurchase
    
    
    
    
    
    
    
    
    
    
    924
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    924Purchase of noncontrolling interest shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    202
    
    
    
    202Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (969
    )
    
    
    
    
    
    
    (969
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,987
    
    
    
    
    
    
    
    
    
    
    
    15,987Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    (42
    )Balance at December 31, 2008
    
    
    59,892
    
    
    $
    602
    
    
    $
    211,128
    
    
    $
    (2,157
    )
    
    $
    (49,233
    )
    
    $
    (995
    )
    
    
    305
    
    
    $
    159,6502009Exercise of stock options
issuance of restricted stock and
sale of common stock under ESPP
    
    
    2,074
    
    
    
    20
    
    
    
    4,507
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,527Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    7,391
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,391Tax benefit related to
exercise of employee stock options
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    471
    
    
    
    
    
    
    
    471Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,061
    
    
    
    
    
    
    
    
    
    
    
    50,061Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86
    )
    
    
    (86
    )Balance at December 31, 2009
    
    
    61,966
    
    
    $
    622
    
    
    $
    223,239
    
    
    $
    (2,157
    )
    
    $
    828
    
    
    $
    (524
    )
    
    
    219
    
    
    $
    222,2272010Exercise of stock options
issuance of restricted stock and
sale of common stock under ESPP
    
    
    2,495
    
    
    
    25
    
    
    
    15,004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,029Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    10,693
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,693Issuance of common stock in settlement
of royalty obligation
    
    
    16
    
    
    
    
    
    
    
    332
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    332Tax benefit related to
exercise of employee stock options
    
    
    
    
    
    
    
    
    
    
    6,172
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,172Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,335
    
    
    
    
    
    
    
    3,335Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,418
    
    
    
    
    
    
    
    
    
    
    
    250,418Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )
    
    
    (57
    )Balance at December 31, 2010
    
    
    64,477
    
    
    $
    647
    
    
    $
    255,440
    
    
    $
    (2,157
    )
    
    $
    251,246
    
    
    $
    2,811
    
    
    
    162
    
    
    $
    508,149
 Years Ended December 31,Comprehensive Income
    
    2010
    
    
    2009
    
    
    2008Net income
    
    $
    250,418
    
    
    $
    50,061
    
    
    $
    15,987Currency translation adjustments
    
    
    3,335
    
    
    
    471
    
    
    
    (969
    )Comprehensive income
    
    $
    253,753
    
    
    $
    50,532
    
    
    $
    15,018
   F-5




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##### Table of Contents



IMPAX LABORATORIES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (dollars in thousands)
 Years Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    250,418
    
    
    $
    50,061
    
    
    $
    15,987Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation
    
    
    12,649
    
    
    
    11,266
    
    
    
    9,588Amortization of 3.5% Debentures discount
and deferred financing costs
    
    
    
    
    
    
    307
    
    
    
    2,416Amortization of Credit Agreement deferred financing costs
    
    
    25
    
    
    
    75
    
    
    
    74Bad debt expense
    
    
    277
    
    
    
    229
    
    
    
    568Deferred income taxes (benefit)
    
    
    42,662
    
    
    
    (10,379
    )
    
    
    3,816Tax benefit related to the exercise of employee stock options
    
    
    (6,172
    )
    
    
    (213
    )
    
    
    Change in accrual for uncertain tax positions
    
    
    280
    
    
    
    (6,308
    )
    
    
    1,397Loss, net on repurchase of 3.5% Debentures
    
    
    
    
    
    
    
    
    
    
    113Deferred revenue  Alliance Agreements
    
    
    35,704
    
    
    
    49,255
    
    
    
    151,275Deferred product manufacturing costs  Alliance Agreements
    
    
    (10,640
    )
    
    
    (26,018
    )
    
    
    (50,018
    )Deferred revenue recognized  Alliance Agreements
    
    
    (230,951
    )
    
    
    (52,357
    )
    
    
    (98,557
    )Amortization deferred product manufacturing costs  Alliance Agreements
    
    
    108,648
    
    
    
    24,497
    
    
    
    37,690Accrued profit sharing and royalty expense
    
    
    101,247
    
    
    
    53,912
    
    
    
    360Profit sharing and royalty payments
    
    
    (140,794
    )
    
    
    (469
    )
    
    
    (656
    )Payments on exclusivity period fee
    
    
    
    
    
    
    (6,000
    )
    
    
    (12,000
    )Accrued litigation settlement expense
    
    
    
    
    
    
    5,865
    
    
    
    3,500Payments on accrued litigation settlements
    
    
    (5,865
    )
    
    
    (11,495
    )
    
    
    (2,197
    )Share-based compensation expense
    
    
    10,714
    
    
    
    7,391
    
    
    
    5,817Fair value of shares issued under severance arrangement
    
    
    
    
    
    
    
    
    
    
    561Accretion of interest income on short-term investments
    
    
    (638
    )
    
    
    (519
    )
    
    
    (2,867
    )Change in fair value of stock purchase warrants
    
    
    
    
    
    
    
    
    
    
    (1,234
    )Changes in assets and liabilities:Accounts receivable
    
    
    103,523
    
    
    
    (142,777
    )
    
    
    7,629Inventory
    
    
    4,581
    
    
    
    (16,825
    )
    
    
    (4,737
    )Prepaid expenses and other assets
    
    
    (12,092
    )
    
    
    2,179
    
    
    
    (4,184
    )Accounts payable and accrued expenses
    
    
    (17,896
    )
    
    
    57,059
    
    
    
    (517
    )Other liabilities
    
    
    4,081
    
    
    
    3,107
    
    
    
    737Net cash provided by (used in) operating activities
    
    $
    249,761
    
    
    $
    (8,157
    )
    
    $
    64,564Cash flows from investing activities:Purchase of short-term investments
    
    
    (403,086
    )
    
    
    (66,626
    )
    
    
    (202,133
    )Maturities of short-term investments
    
    
    205,718
    
    
    
    59,256
    
    
    
    260,324Acquisition of ANDA intellectual property rights
    
    
    
    
    
    
    (750
    )
    
    
    Purchases of property, plant and equipment
    
    
    (16,267
    )
    
    
    (13,667
    )
    
    
    (25,863
    )Net cash (used in) provided by investing activities
    
    $
    (213,635
    )
    
    $
    (21,787
    )
    
    $
    32,328
  F-6




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##### Table of Contents



IMPAX LABORATORIES, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(dollars in thousands)
 Years Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from financing activities:Repayment of long-term debt
    
    
    
    
    
    
    (12,887
    )
    
    
    (65,234
    )Tax benefit related to the exercise of employee stock options
    
    
    6,172
    
    
    
    213
    
    
    
    Proceeds from exercise of stock options
and purchases under the ESPP
    
    
    17,728
    
    
    
    5,113
    
    
    
    155Net cash provided by (used in) financing activities
    
    $
    23,900
    
    
    $
    (7,561
    )
    
    $
    (65,079
    )Net increase (decrease) in cash and cash equivalents
    
    $
    60,026
    
    
    $
    (37,505
    )
    
    $
    31,813Cash and cash equivalents, beginning of period
    
    $
    31,770
    
    
    $
    69,275
    
    
    $
    37,462Cash and cash equivalents, end of period
    
    $
    91,796
    
    
    $
    31,770
    
    
    $
    69,275
  Years Ended December 31,(in $000s)
    
    2010
    
    
    2009
    
    
    2008Cash paid for interest
    
    $
    167
    
    
    $
    622
    
    
    $
    2,970Cash paid for income taxes
    
    $
    129,763
    
    
    $
    415
    
    
    $
    8,381
     F-7




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##### Table of Contents



IMPAX LABORATORIES, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 YEARS ENDED DECEMBER 31, 2010, 2009, 2008
 1. THE COMPANY
        F-8




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
  Principles of Consolidation
  Cash and Cash Equivalents
  Short-Term Investments
  Fair Value of Financial Instruments
   F-9




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Contingencies
 TM
 Allowance for Doubtful Accounts
  Concentration of Credit Risk
   Percent of Total Accounts Receivable
    
    2010
    
    
    2009
    
    
    2008Customer #1
    
    
    28.3
    %
    
    
    19.9
    %
    
    
    22.9
    %Customer #2
    
    
    18.4
    %
    
    
    18.7
    %
    
    
    20.4
    %Customer #3
    
    
    15.0
    %
    
    
    43.8
    %
    
    
    20.4
    %Customer #4
    
    
    
    %
    
    
    
    %
    
    
    13.5
    %Customer #5
    
    
    
    %
    
    
    
    %
    
    
    6.0
    %Customer #6
    
    
    13.5
    %
    
    
    3.6
    %
    
    
    
    %Customer #7
    
    
    2.9
    %
    
    
    2.7
    %
    
    
    
    %Total-Five largest customers
    
    
    78.1
    %
    
    
    88.7
    %
    
    
    83.2
    %
 Percent of Gross Revenues
    
    2010
    
    
    2009
    
    
    2008Customer #1
    
    
    19.9
    %
    
    
    22.2
    %
    
    
    18.0
    %Customer #2
    
    
    
    %
    
    
    5.7
    %
    
    
    14.0
    %Customer #3
    
    
    
    %
    
    
    
    %
    
    
    13.9
    %Customer #4
    
    
    14.1
    %
    
    
    26.5
    %
    
    
    11.6
    %Customer #5
    
    
    14.2
    %
    
    
    15.3
    %
    
    
    10.9
    %Customer #6
    
    
    6.5
    %
    
    
    3.9
    %
    
    
    
    %Customer #7
    
    
    3.4
    %
    
    
    
    %
    
    
    
    %Total-Five largest customers
    
    
    58.1
    %
    
    
    73.6
    %
    
    
    68.4
    %
   F-10




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Inventory
  Property, Plant and Equipment
   F-11




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Goodwill
    Debt
  Twelve Months Ended:December 31,
    
    
    December 31,
    
    
    December 31,(in $000s except per share amounts)
    
    2010
    
    
    2009
    
    
    2008Additional interest expense
    
    $
    
    
    
    $
    253
    
    
    $
    2,183Reduction in gain on
extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (1,432
    )Benefit for income taxes
    
    
    
    
    
    
    (89
    )
    
    
    (902
    )Decrease in net income
    
    $
    
    
    
    $
    (164
    )
    
    $
    (2,713
    )Decrease in Net income per share:Basic
    
    $
    
    
    
    $
    
    
    
    $
    (0.05
    )Diluted
    
    $
    
    
    
    $
    
    
    
    $
    (0.04
    )
  F-12




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Revenue Recognition
   
    
    the delivered item has value to the customer on a stand alone basis; and
 
    
    if the arrangement includes a general right of return relative to the delivered item,
delivery or performance of the undelivered item is considered probable and substantially
in the control of the vendor.
    F-13




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Global Product sales, net:
  Returns
   Rebates and Chargebacks
    F-14




---



##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Shelf-Stock Adjustments
  Medicaid
  Cash Discounts
   F-15




---



##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Private Label Product sales
  Rx Partner and OTC Partner:
     F-16




---



##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
   F-17




---



##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Research Partner:
  Promotional Partner:
  Shipping and Handling Fees and Costs
  Research and Development
  Derivatives
   F-18




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Income Taxes
   Share-Based Compensation
  Litigation Settlements
 ®
  F-19




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##### Table of Contents



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Earnings per Share
  Other Comprehensive Income
  Deferred Financing Costs
  Foreign Currency Translation
   F-20




---



##### Table of Contents



3. RECENT ACCOUNTING PRONOUNCEMENTS
        F-21




---



##### Table of Contents



3. RECENT ACCOUNTING PRONOUNCEMENTS (continued)
      F-22




---



##### Table of Contents



3. RECENT ACCOUNTING PRONOUNCEMENTS (continued)
   F-23




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##### Table of Contents



4. INVESTMENTS
   Gross
    
    
    Gross(in $000s)
    
    Amortized
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairDecember 31, 2010
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueCommercial paper
    
    $
    168,260
    
    
    $
    36
    
    
    $
    (7
    )
    
    $
    168,289Government sponsored
enterprise obligations
    
    
    56,866
    
    
    
    40
    
    
    
    (1
    )
    
    
    56,905Corporate bonds
    
    
    18,316
    
    
    
    15
    
    
    
    (13
    )
    
    
    18,318Certificates of deposit
    
    
    13,163
    
    
    
    13
    
    
    
    
    
    
    
    13,176Total short-term investments
    
    $
    256,605
    
    
    $
    104
    
    
    $
    (21
    )
    
    $
    256,688
 Gross
    
    
    Gross(in $000s)
    
    Amortized
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairDecember 31, 2009
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueCommercial paper
    
    $
    13,387
    
    
    $
    4
    
    
    $
    (1
    )
    
    $
    13,390Government sponsored
enterprise obligations
    
    
    41,953
    
    
    
    32
    
    
    
    (1
    )
    
    
    41,984Corporate bonds
    
    
    3,021
    
    
    
    1
    
    
    
    (1
    )
    
    
    3,021Certificates of deposit
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    238Total short-term investments
    
    $
    58,599
    
    
    $
    37
    
    
    $
    (3
    )
    
    $
    58,633
  F-24




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##### Table of Contents



5. ACCOUNTS RECEIVABLE
  December 31,
    
    
    December 31,(in $000s)
    
    2010
    
    
    2009Gross accounts receivable
    
    $
    123,941
    
    
    $
    254.094Less: Rebate reserve
    
    
    (20,892
    )
    
    
    (37,781
    )Less: Chargeback reserve
    
    
    (14,918
    )
    
    
    (21,448
    )Less: Other deductions
    
    
    (6,077
    )
    
    
    (9,011
    )Accounts receivable, net
    
    $
    82,054
    
    
    $
    185,854
  (in $000s)
    
    December 31,
    
    
    December 31
    
    
    December 31Rebate reserve
    
    2010
    
    
    2009
    
    
    2008Beginning balance
    
    $
    37,781
    
    
    $
    4,800
    
    
    $
    3,603Provision recorded during the period
    
    
    91,063
    
    
    
    72,620
    
    
    
    20,361Credits issued during the period
    
    
    (107,952
    )
    
    
    (39,639
    )
    
    
    (19,164
    )Ending balance
    
    $
    20,892
    
    
    $
    37,781
    
    
    $
    4,800
 (in $000s)
    
    December 31,
    
    
    December 31
    
    
    December 31Chargeback reserve
    
    2010
    
    
    2009
    
    
    2008Beginning balance
    
    $
    21,448
    
    
    $
    4,056
    
    
    $
    2,977Provision recorded during the period
    
    
    181,566
    
    
    
    126,105
    
    
    
    50,144Credits issued during the period
    
    
    (188,096
    )
    
    
    (108,713
    )
    
    
    (49,065
    )Ending balance
    
    $
    14,918
    
    
    $
    21,448
    
    
    $
    4,056
   F-25




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##### Table of Contents



6. INVENTORY
  December 31,
    
    
    December 31,(in $000s)
    
    2010
    
    
    2009Raw materials
    
    $
    27,871
    
    
    $
    30,758Work in process
    
    
    2,575
    
    
    
    2,768Finished goods
    
    
    20,545
    
    
    
    17,051Total inventory, net
    
    $
    50,991
    
    
    $
    50,577Less: Non-current inventory, net
    
    
    6,442
    
    
    
    1,447Total inventory-current, net
    
    $
    44,549
    
    
    $
    49,130
     F-26




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##### Table of Contents



7. PROPERTY, PLANT AND EQUIPMENT
  December 31,
    
    
    December 31,(in $000s)
    
    2010
    
    
    2009Land
    
    $
    2,270
    
    
    $
    2,270Buildings and improvements
    
    
    82,836
    
    
    
    77,778Equipment
    
    
    70,785
    
    
    
    59,612Office furniture and equipment
    
    
    9,077
    
    
    
    7,425Construction-in-progress
    
    
    3,958
    
    
    
    4,880Property, plant and equipment, gross
    
    $
    168,926
    
    
    $
    151,965Less: Accumulated depreciation
    
    
    (62,646
    )
    
    
    (50,315
    )Property, plant and equipment, net
    
    $
    106,280
    
    
    $
    101,650
   F-27




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##### Table of Contents



8. ACCRUED EXPENSES
  December 31,
    
    
    December 31(in $000s)
    
    2010
    
    
    2009Payroll-related expenses
    
    $
    16,796
    
    
    $
    15,274Product returns
    
    
    33,755
    
    
    
    22,114Medicaid rebates
    
    
    12,475
    
    
    
    9,759Physician detailing sales force fees
    
    
    2,308
    
    
    
    2,449Legal and professional fees
    
    
    3,143
    
    
    
    3,660Litigation settlements
    
    
    
    
    
    
    5,865Shelf stock price protection
    
    
    281
    
    
    
    225Other
    
    
    4,030
    
    
    
    2,709Total accrued expenses
    
    $
    72,788
    
    
    $
    62,055
 Product Returns
  (in $000s)
    
    December 31,
    
    
    December 31
    
    
    December 31Returns Reserve
    
    2010
    
    
    2009
    
    
    2008Beginning balance
    
    $
    22,114
    
    
    $
    13,675
    
    
    $
    14,261Provision related to
sales recorded in the period
    
    
    15,821
    
    
    
    11,847
    
    
    
    5,719Credits issued during the period
    
    
    (4,180
    )
    
    
    (3,408
    )
    
    
    (6,305
    )Ending balance
    
    $
    33,755
    
    
    $
    22,114
    
    
    $
    13,675
 Accrued Litigation Settlement Expenses
   F-28




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9. FAIR VALUE OF COMMON STOCK PURCHASE WARRANTS
 Common Stock Purchase Warrants
    F-29




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##### Table of Contents



10. INCOME TAXES
  For the Years Ended December 31,(in $000s)
    
    2010
    
    
    2009
    
    
    2008Current:Federal taxes
    
    $
    96,560
    
    
    $
    29,550
    
    
    $
    6,315State taxes
    
    
    10,471
    
    
    
    1,715
    
    
    
    (62
    )Total current tax expense
    
    
    107,031
    
    
    
    31,265
    
    
    
    6,253Deferred:Federal taxes
    
    $
    27,138
    
    
    $
    (11,520
    )
    
    $
    4,938State taxes
    
    
    9,140
    
    
    
    1,995
    
    
    
    (1,122
    )Foreign taxes
    
    
    212
    
    
    
    (734
    )
    
    
    Total deferred tax expense (benefit)
    
    
    36,490
    
    
    
    (10,259
    )
    
    
    3,816Provision for income taxes
    
    $
    143,521
    
    
    $
    21,006
    
    
    $
    10,069
  For the Years Ended December 31,(in $000s)
    
    2010
    
    
    2009
    
    
    2008Income before income taxes
    
    $
    393,879
    
    
    
    
    
    
    $
    70,977
    
    
    
    
    
    
    $
    26,009Tax provision at the
federal statutory rate
    
    
    137,858
    
    
    
    35.0
    %
    
    
    24,842
    
    
    
    35.0
    %
    
    
    9,103
    
    
    
    35.0
    %Increase (decrease) in tax rate resulting from:State and local taxes, net of federal benefit
    
    
    12,873
    
    
    
    3.3
    %
    
    
    3,628
    
    
    
    5.1
    %
    
    
    25
    
    
    
    0.1
    %Research and development credits
    
    
    (2,700
    )
    
    
    (0.7
    )%
    
    
    (2,546
    )
    
    
    (3.6
    )%
    
    
    (2,228
    )
    
    
    (8.6
    )%Share-based compensation
    
    
    979
    
    
    
    0.2
    %
    
    
    1,824
    
    
    
    2.6
    %
    
    
    1,438
    
    
    
    5.5
    %Domestic manufacturing deduction
    
    
    (6,563
    )
    
    
    (1.7
    )%
    
    
    (700
    )
    
    
    (1.0
    )%
    
    
    (531
    )
    
    
    (2.0
    )%Change in warrant fair value
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    (432
    )
    
    
    (1.6
    )%Provision for uncertain tax positions
    
    
    203
    
    
    
    0.1
    %
    
    
    (6,084
    )
    
    
    (8.6
    )%
    
    
    1,050
    
    
    
    4.0
    %Other, net
    
    
    871
    
    
    
    0.2
    %
    
    
    294
    
    
    
    0.4
    %
    
    
    1,311
    
    
    
    4.9
    %Change in valuation allowance
    
    
    
    
    
    
    
    %
    
    
    (252
    )
    
    
    (0.3
    )%
    
    
    333
    
    
    
    1.4
    %Provision for income taxes
    
    $
    143,521
    
    
    
    36.4
    %
    
    $
    21,006
    
    
    
    29.6
    %
    
    $
    10,069
    
    
    
    38.7
    %
  F-30




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##### Table of Contents



10. INCOME TAXES (continued)
  December 31,(in $000s)
    
    2010
    
    
    2009Deferred tax assets:Deferred revenues
    
    $
    15,970
    
    
    $
    99,160Accrued expenses
    
    
    28,752
    
    
    
    21,115Inventory reserves
    
    
    2,874
    
    
    
    2,936Net operating loss carryforwards
    
    
    1,317
    
    
    
    1,648Depreciation and amortization
    
    
    458
    
    
    
    492Other
    
    
    4,212
    
    
    
    3,674Deferred tax assets
    
    $
    53,583
    
    
    $
    129,025Deferred tax liabilities:Tax depreciation and amortization
in excess of book amounts
    
    $
    3,862
    
    
    $
    3,919Deferred manufacturing costs
    
    
    3,916
    
    
    
    42,591Other
    
    
    1,465
    
    
    
    1,685Deferred tax liabilities
    
    $
    9,243
    
    
    $
    48,195Deferred tax assets, net
    
    $
    44,340
    
    
    $
    80,830
  December 31,(in $000s)
    
    2010
    
    
    2009Current deferred tax assets
    
    $
    41,506
    
    
    $
    38,337Current deferred tax liabilities
    
    
    (2,235
    )
    
    
    (6.551
    )Current deferred tax assets, net
    
    
    39,271
    
    
    
    32,286Non-current deferred tax assets
    
    
    12,077
    
    
    
    91,037Non-current deferred tax liabilities
    
    
    (7,008
    )
    
    
    (42,493
    )Non-current deferred tax assets, net
    
    
    5,069
    
    
    
    48,544Deferred tax assets, net
    
    $
    44,340
    
    
    $
    80,830
  (in $000s)Year
    
    Amount2021
    
    $
    3,498,7222022
    
    
    1,954,7682023
    
    
    3,775,188Total
    
    $
    9,228,678
  F-31




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##### Table of Contents



10. INCOME TAXES (continued)
  (in $000s)Balance at January 1, 2010
    
    $
    1,207Increase/(decrease) based on prior year tax positions
    
    
    108Increase/(decrease) based on current year tax positions
    
    
    172Interest expense
    
    
    93Balance at December 31, 2010
    
    $
    1,580
   F-32




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##### Table of Contents



11. REVOLVING LINE OF CREDIT
    
    
    The outstanding principal amount of all revolving credit loans, together with accrued
and unpaid interest thereon, will be due and payable on the maturity date, which will
occur four years following the February 11, 2011 closing date.
 
    
    Borrowings under the Revolving Credit Facility will bear interest, at the Companys
option, at either an Alternate Base Rate (as defined in the Credit Agreement) plus the
applicable margin in effect from time to time ranging from 0.5% to 1.5%, or a LIBOR Rate
(as defined in the Credit Agreement) plus the applicable margin in effect from time to
time ranging from 1.5% to 2.5%. The Company is also required to pay an unused
commitment fee ranging from 0.25% to 0.45% per annum based on the daily average undrawn
portion of the Revolving Credit Facility. The applicable margin described above and the
unused commitment fee in effect at any given time will be determined based on the
Companys Total Net Leverage Ratio (as defined in the Credit Agreement), which is based
upon the Companys consolidated total debt, net of unrestricted cash in excess of $100
million, compared to Consolidated EBITDA (as defined in the Credit Agreement) for the
immediately preceding four quarters.
 
    
    The Company may prepay any outstanding loan under the Revolving Credit Facility
without premium or penalty.
 
    
    The Company is required under the Credit Agreement and the Security Agreement to
comply with a number of affirmative, negative and financial covenants. Among other
things, these covenants (i) require the Company to provide periodic reports, notices of
material events and information regarding collateral, (ii) restrict the Company
ability, subject to certain exceptions and baskets, to incur additional indebtedness,
grant liens on assets, undergo fundamental changes, change the nature of its business,
make investments, undertake acquisitions, sell assets, make restricted payments
(including the ability to pay dividends and repurchase stock) or engage in affiliate
transactions, and (iii) require the Company to maintain a Total Net Leverage Ratio
(which is, generally, our total funded debt, net of unrestricted cash in excess of $100
million, over our EBITDA for the preceding four quarters) of less than 3.75 to 1.00, a
Senior Secured Leverage Ratio (which is, generally, our total senior secured debt over
our EBITDA for the preceding four quarters) of less than 2.50 to 1.00 and a Fixed Charge
Coverage Ratio (which is, generally, our EBITDA for the preceding four quarters over the
sum of cash interest expense, cash tax payments, scheduled funded debt payments and
capital expenditures during such four quarter period) of at least 2.00 to 1.00 (with
each such ratio as more particularly defined as set forth in the Credit Agreement).
  F-33




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##### Table of Contents



11. REVOLVING LINE OF CREDIT (continued)
 
    
    The Credit Agreement contains customary events of default (subject to customary grace
periods, cure rights and materiality thresholds), including, among others, failure to
pay principal, interest or fees, violation of covenants, material inaccuracy of
representations and warranties, cross-default and cross-acceleration of material
indebtedness and other obligations, certain bankruptcy and insolvency events, certain
judgments, certain events related to the Employee Retirement Income Security Act of
1974, as amended, and a change of control.
 
    
    Following an event of default under the Credit Agreement, the Administrative Agent
would be entitled to take various actions, including the acceleration of amounts due
under the Credit Agreement and seek other remedies that may be taken by secured
creditors.
    F-34




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12. LONG-TERM DEBT
 3.5% Convertible Senior Subordinated Debentures
    F-35




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##### Table of Contents



12. LONG-TERM DEBT (continued)
 Adoption of FASB ASC Topic 470
        Year Ended December 31:(in $000s)
    
    2010
    
    
    2009
    
    
    2008Contractual interest
    
    $
    
    
    
    $
    202
    
    
    $
    2,084Discount amortization
    
    
    
    
    
    
    241
    
    
    
    2,078Deferred financing cost amortization
    
    
    
    
    
    
    66
    
    
    
    338Total interest cost
    
    $
    
    
    
    $
    509
    
    
    $
    4,500Effective interest rate on 3.5% Debentures
    
    
    
    
    
    
    8.7
    %
    
    
    8.7
    %
  F-36




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS
 License and Distribution Agreement with Shire
 ®
  F-37




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS
 Strategic Alliance Agreement with Teva
   Product Development, Manufacture and Sales:
 Cost Sharing:
 Sale of Common Stock:
 
    
    Contingent Stock Repurchase Option. The Teva Agreement divided the products
into three categories, referred to as product tiers. The Tier 1 products were those
pending FDA approval when the Teva Agreement was entered into, whereas Tier 2 and Tier 3
products were those for which applications to the FDA had not as yet been filed at the
inception of the Teva Agreement. The Teva Agreement gave the Company the option to
repurchase from Teva 243,729 shares of its common stock (one-sixth of the shares
initially sold to Teva) for $1.00 contingent upon Teva achieving a commercial sale
of either a Tier 2 or Tier 3 product.
  F-38




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 Advance Deposit:
 
    
    Contingent Sale of Market Exclusivity The Teva Agreement obligated the
Company to deliver and Teva to purchase the exclusive marketing rights for four of the
covered products for $22,000,000 to the extent the Company achieved specified
product development milestones relating to four products. Portions of this $
22,000,000 purchase price were assigned to milestones based on their negotiated values
at the inception of the Teva Agreement. If some, but not all of the milestones were
achieved, then exclusive marketing rights would transfer only for those products for
which the related milestones were met. To the extent the milestones were not achieved by
January 15, 2004 and Teva had not exercised the contingent option to purchase market
exclusivity described below, the related exclusive marketing rights would not be
transferred to Teva, the Company would be required to repay the corresponding portions
of the $22,000,000 advance deposit and Teva would retain non-exclusive marketing
rights with respect to the related products. The milestones and related portions to be
repaid were: $2,000,000 if tentative FDA approval for one specified product was not
obtained by June 15, 2002; $5,000,000 if the same product was not launched by February
15, 2003; $5,000,000 and $4,000,000, respectively, if two additional products were
not launched by December 15, 2003; $1,000,000 if tentative FDA approval of a fourth
product was not received by January 15, 2003; and $5,000,000 if the same product was
not launched by December 15, 2003.
 
    
    Contingent Option to Purchase Market Exclusivity The Company also granted
Teva an option to purchase the exclusive marketing rights to the four specified products
to the extent the product development milestones were not met. Teva could exercise this
right by forgiving repayment of half of the foregoing portions of the $22,000,000
advance deposit payable as assigned in the Teva Agreement to the specified product.
 
    
    The Companys Share Settlement Option To the extent the Company failed to
achieve the milestones and Teva failed to exercise its option to purchase market
exclusivity for the four specified products and the Company was thus required to repay
the advance deposit, the Company had the option to settle, or repay, the applicable
portion of the advance deposit either in cash or with shares of its common stock valued
at the Designated Share Price.
 
    
    Interest Forgiveness /FDA Approval Provision Under the terms of the Teva
Agreement, when the Company received FDA approval for any three of the covered products,
the entire amount of interest payable under the advance deposit would be forgiven. The
nominal amount of the accrued interest expected to be incurred over the life of the
advance deposit was estimated not to exceed approximately $4,400,000.
 Other Provisions
  F-39




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
    
    
    Research and development related activities (the Combined Unit)  Consideration received as a result of research and
development related activities performed under the Teva Agreement will initially be deferred and recognized on the
straight-line method over the Companys expected period of performance of the research and development related services,
estimated to be from July 2001 (following the June 2001 effective date of the Teva Agreement) to October 2014 (with FDA
approval of the ANDA for the final product under the Teva Agreement).
    
    Manufacture and delivery of the products  Consideration received as a result of the manufacture and delivery of the
products under the Teva Agreement will be recognized under the Companys revenue recognition policy, as proscribed by SAB
104, as follows:
 
    
    Product shipments  The Company will account for the shipment of products under the Teva Agreement as current period
revenue in accordance with its revenue recognition policy applicable to its Global Products.
    
    Profit share  The Company will recognize profit share, if any, as current period revenue when earned.
 
    
    Gain on the repurchase of Company stock  This represents additional profit share revenue resulting from the successful
December 2006 commercial sale of a Tier 2 or Tier 3 product, and was recognized as revenue in the period earned.
   F-40




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
   Inception(in $000s)
    
    For the Years Ended December 31,
    
    
    ThroughDeferred revenue
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2007Beginning balance
    
    $
    202,032
    
    
    $
    200,608
    
    
    $
    181,149
    
    
    $
    Additions:Product related and cost sharing
    
    
    10,096
    
    
    
    35,245
    
    
    
    60,406
    
    
    
    321,618Exclusivity charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,600
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,527Total additions
    
    $
    10,096
    
    
    $
    35,245
    
    
    $
    60,406
    
    
    $
    283,545Less:Amount recognized
    
    $
    (11,278
    )
    
    $
    (33,821
    )
    
    $
    (40,947
    )
    
    $
    (102,396
    )Accounting adjustment
    
    
    (196,440
    )
    
    
    
    
    
    
    
    
    
    
    Total deferred revenue
    
    $
    4,410
    
    
    $
    202,032
    
    
    $
    200,608
    
    
    $
    181,149
 (in $000s)
    
    
    
    
    
    
    
    
    
    
    
    
    
    InceptionDeferred product
    
    For the Years Ended December 31,
    
    
    Throughmanufacturing costs
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2007Beginning balance
    
    $
    94,040
    
    
    $
    88,361
    
    
    $
    75,296
    
    
    $
    Additions
    
    
    7,416
    
    
    
    24,089
    
    
    
    33,621
    
    
    
    117,855LessAmount recognized
    
    
    (6,030
    )
    
    
    (18,410
    )
    
    
    (20,556
    )
    
    
    (42,559
    )Accounting adjustment
    
    
    (95,426
    )Total deferred product
manufacturing costs
    
    $
    
    
    
    $
    94,040
    
    
    $
    88,361
    
    
    $
    75,296
  DeferredRevenue(in $000s)
    
    Recognition2011
    
    $
    1,1512012
    
    
    1,1512013
    
    
    1,1512014
    
    
    9572015
    
    
    Thereafter
    
    
    Totals
    
    $
    4,410
  F-41




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 OTC Partner Alliance Agreements
       ® ®
  F-42




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
   Inception(in $000s)
    
    For the Years Ended December 31,
    
    
    ThroughDeferred revenue
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2007Beginning balance
    
    $
    16,162
    
    
    $
    21,044
    
    
    $
    20,591
    
    
    $
    Additions:Upfront fees and milestone payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,436Cost sharing and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,642Product related deferrals
    
    
    4,108
    
    
    
    1,960
    
    
    
    16,399
    
    
    
    65,467Total additions
    
    $
    4,108
    
    
    $
    1,960
    
    
    $
    16,399
    
    
    $
    75,545Less: amounts recognized:
    
    
    (8,888
    )
    
    
    (6,842
    )
    
    
    (15,946
    )
    
    
    (54,954
    )Total deferred revenue
    
    $
    11,382
    
    
    $
    16,162
    
    
    $
    21,044
    
    
    $
    20,591
 (in $000s)
    
    
    
    
    
    
    
    
    
    
    
    
    
    InceptionDeferred product
    
    For the Years Ended December 31,
    
    
    Throughmanufacturing costs
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2007Beginning balance
    
    $
    14,203
    
    
    $
    18,361
    
    
    $
    17,251
    
    
    $
    Additions
    
    $
    3,223
    
    
    $
    1,929
    
    
    $
    16,087
    
    
    $
    59,854Less: amount recognized
    
    
    (7,191
    )
    
    
    (6,087
    )
    
    
    (14,977
    )
    
    
    (42,603
    )Total deferred product
manufacturing costs
    
    $
    10,235
    
    
    $
    14,203
    
    
    $
    18,361
    
    
    $
    17,251
  DeferredDeferred
    
    
    ProductRevenue
    
    
    Manufacturing Costs(in $000s)
    
    Recognition
    
    
    Amortization2011
    
    $
    2,268
    
    
    $
    2,0122012
    
    
    1,450
    
    
    
    1,3132013
    
    
    1,450
    
    
    
    1,3132014
    
    
    1,450
    
    
    
    1,3132015
    
    
    1,450
    
    
    
    1,313Thereafter
    
    
    3,314
    
    
    
    2,971Total
    
    $
    11,382
    
    
    $
    10,235
  F-43




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 Agreements with Medicis Pharmaceutical Corporation
  Joint Development Agreement
 ® ®
  1. Research & Development Services
   2. Royalty Fees Earned  Mediciss Sale of Advanced Form SOLODYN® (Brand) Product
 ® ® ® ®
  F-44




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 3. Accounting for Sales of the Companys Four Generic Dermatology Products
   (in $000s)
    
    Years Ended December 31Deferred revenue
    
    2010
    
    
    2009
    
    
    2008Beginning balance
    
    $
    39,487
    
    
    $
    39,167
    
    
    $
    Additions:Up-front fees and milestone payments
    
    
    
    
    
    
    12,000
    
    
    
    40,000Product related deferrals
    
    
    
    
    
    
    
    
    
    
    Total additions
    
    
    
    
    
    
    12,000
    
    
    
    40,000Less: amount recognized
    
    
    (13,539
    )
    
    
    (11,680
    )
    
    
    (833
    )Total deferred revenue
    
    $
    25,948
    
    
    $
    39,487
    
    
    $
    39,167
  DeferredRevenue(in $000s)
    
    Recognition2011
    
    $
    13,5382012
    
    
    12,4102013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    Total
    
    $
    25,948
  F-45




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 Supply & Distribution Agreement with DAVA Pharmaceuticals, Inc.
 ®
   Inception(in $000s)
    
    For the Years Ended December 31,
    
    
    ThroughDeferred revenue
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2007Beginning balance
    
    $
    
    
    
    $
    
    
    
    $
    6,361
    
    
    $
    Additions:Upfront fees and milestone payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Product related deferrals
    
    
    
    
    
    
    
    
    
    
    34,470
    
    
    
    117,977Total additions
    
    
    
    
    
    
    
    
    
    
    34,470
    
    
    
    127,977Less: amount recognized
    
    
    
    
    
    
    
    
    
    
    (40,831
    )
    
    
    (121,616
    )Total deferred revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,361
 (in $000s)
    
    
    
    
    
    
    
    
    
    
    
    
    
    InceptionDeferred product
    
    For the Years Ended December 31,
    
    
    Throughmanufacturing costs
    
    2010
    
    
    2009
    
    
    2008
    
    
    Dec 31, 2006Beginning balance
    
    $
    
    
    
    $
    
    
    
    $
    1,850
    
    
    $
    Additions
    
    
    
    
    
    
    
    
    
    
    307
    
    
    
    28,737Less: amount recognized
    
    
    
    
    
    
    
    
    
    
    (2,157
    )
    
    
    (26,887
    )Total deferred product
manufacturing costs
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,850
  F-46




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 Development and Co-Promotion Agreement with Endo Pharmaceuticals Inc.
    License, Development and Commercialization Agreement with Glaxo Group Limited
   F-47




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##### Table of Contents



13. ALLIANCE AND COLLABORATION AGREEMENTS (continued)
 Co-Promotion Agreement with Pfizer
 ®
 ®
 Promotional Services Agreement with Shire
 ®
  F-48




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##### Table of Contents



14. EMPLOYEE BENEFIT PLANS
 4 01(k) Defined Contribution Plan
  Employee Stock Purchase Plan
  Deferred Compensation Plan
    F-49




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##### Table of Contents



15. SHARE-BASED COMPENSATION
  Impax Laboratories, Inc. 1995 Stock Incentive Plan
  Impax Laboratories, Inc. 1999 Equity Incentive Plan
  Impax Laboratories, Inc. Amended and Restated 2002 Equity Incentive Plan
   WeightedAverageExerciseNumber of Shares
    
    
    PriceStock Options
    
    Under Option
    
    
    per ShareOutstanding at December 31, 2007
    
    
    9,047,761
    
    
    $
    9.90Options granted
    
    
    539,850
    
    
    $
    8.80Options exercised
    
    
    (956,824
    )
    
    $
    4.18Options forfeited
    
    
    (350,547
    )
    
    $
    9.07Outstanding at December 31, 2008
    
    
    8,280,240
    
    
    $
    10.53Options granted
    
    
    2,489,141
    
    
    $
    6.96Options exercised
    
    
    (1,175,897
    )
    
    $
    3.69Options forfeited
    
    
    (1,363,666
    )
    
    $
    13.86Outstanding at December 31, 2009
    
    
    8,229,818
    
    
    $
    9.87Options granted
    
    
    405,600
    
    
    $
    20.22Options exercised
    
    
    (1,900,549
    )
    
    $
    8.62Options forfeited
    
    
    (220,193
    )
    
    $
    11.03Outstanding at December 31, 2010
    
    
    6,514,676
    
    
    $
    10.84Vested and expected to vest at December 31, 2010
    
    
    6,898,658
    
    
    $
    10.79Options exercisable at December 31, 2010
    
    
    3,890,143
    
    
    $
    11.73
  F-50




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##### Table of Contents



15. SHARE-BASED COMPENSATION (continued)
   Non-Vested
    
    
    WeightedRestricted
    
    
    AverageStock
    
    
    Grant DateRestricted Stock Awards
    
    Awards
    
    
    Fair ValueNon-vested at December 31, 2007
    
    
    270,341
    
    
    $
    11.45Granted
    
    
    210,300
    
    
    $
    8.81Vested
    
    
    (64,111
    )
    
    $
    11.45Forfeited
    
    
    (16,814
    )
    
    $
    11.15Non-vested at December 31, 2008
    
    
    399,716
    
    
    $
    10.30Granted
    
    
    886,969
    
    
    $
    6.99Vested
    
    
    (113,204
    )
    
    $
    10.25Forfeited
    
    
    (20,558
    )
    
    $
    7.87Non-vested at December 31, 2009
    
    
    1,152,923
    
    
    $
    7.72Granted
    
    
    727,556
    
    
    $
    18.87Vested
    
    
    368,825
    
    
    $
    8.61Forfeited
    
    
    76,895
    
    
    $
    10.17Non-vested at December 31, 2010
    
    
    1,434,759
    
    
    $
    12.93
    For the Years Ended December 31,2010
    
    
    2009
    
    
    2008Volatility (range)
    
    
    55.1%-56.4
    %
    
    
    58.3%-64.2
    %
    
    
    64.1%-67.7
    %Volatility (weighted average)
    
    
    55.9
    %
    
    
    60.4
    %
    
    
    66.8
    %Risk-free interest rate (range)
    
    
    1.5%-3.1
    %
    
    
    2.1%-2.9
    %
    
    
    1.6%-3.8
    %Risk-free interest rate (weighted average)
    
    
    2.3
    %
    
    
    2.6
    %
    
    
    3.0
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected life (years)
    
    
    6.21
    
    
    
    6.25
    
    
    
    6.25Weighted average grant date fair value
    
    $
    11.08
    
    
    $
    4.07
    
    
    $
    5.58
  F-51




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##### Table of Contents



15. SHARE-BASED COMPENSATION (continued)
   For the Years Ended December 31,(in $000s)
    
    2010
    
    
    2009
    
    
    2008Cost of revenues
    
    $
    2,377
    
    
    $
    1,600
    
    
    $
    1,538Research and development
    
    
    3,466
    
    
    
    2,677
    
    
    
    2,273Selling, general and administrative
    
    
    4,871
    
    
    
    3,114
    
    
    
    2,006Total
    
    $
    10,714
    
    
    $
    7,391
    
    
    $
    5,817
    F-52




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##### Table of Contents



16. STOCKHOLDERS EQUITY
 Preferred Stock
  Common Stock
  Shareholders Rights Plan
    F-53




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##### Table of Contents



17. EARNINGS PER SHARE
   For the Years Ended December 31,(in $000s, except share and per share amounts)
    
    2010
    
    
    2009
    
    
    2008Numerator:Net income
    
    $
    250,418
    
    
    $
    50,061
    
    
    $
    15,987Denominator:Weighted average
common shares outstanding
    
    
    62,037,908
    
    
    
    60,279,602
    
    
    
    59,072,752Effect of dilutive options and
and common stock purchase warrants
    
    
    3,527,224
    
    
    
    800,582
    
    
    
    1,709,969Diluted weighted average
common shares outstanding
    
    
    65,565,132
    
    
    
    61,080,184
    
    
    
    60,782,721Basic net income per share
    
    $
    4.04
    
    
    $
    0.83
    
    
    $
    0.27Diluted net income per share
    
    $
    3.82
    
    
    $
    0.82
    
    
    $
    0.26
    F-54




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##### Table of Contents



18. SEGMENT INFORMATION
      F-55




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##### Table of Contents



18. SEGMENT INFORMATION (continued)
  (in $000s)
    
    Global
    
    
    Impax
    
    
    Corporate
    
    
    TotalYear Ended December 31, 2010
    
    Division
    
    
    Division
    
    
    and Other
    
    
    CompanyRevenues, net
    
    $
    864,667
    
    
    $
    14,842
    
    
    $
    
    
    
    $
    879,509Cost of revenues
    
    
    328,163
    
    
    
    12,083
    
    
    
    
    
    
    
    340,246Research and development
    
    
    44,311
    
    
    
    41,912
    
    
    
    
    
    
    
    86,223Patent Litigation
    
    
    6,384
    
    
    
    
    
    
    
    
    
    
    
    6,384Income (loss) before income taxes
    
    $
    469,858
    
    
    $
    (42,663
    )
    
    $
    (33,316
    )
    
    $
    393,879
 Global
    
    
    Impax
    
    
    Corporate
    
    
    TotalYear Ended December 31, 2009
    
    Division
    
    
    Division
    
    
    and Other
    
    
    CompanyRevenues, net
    
    $
    344,961
    
    
    $
    13,448
    
    
    $
    
    
    
    $
    358,409Cost of revenues
    
    
    158,270
    
    
    
    12,043
    
    
    
    
    
    
    
    170,313Research and development
    
    
    38,698
    
    
    
    24,576
    
    
    
    
    
    
    
    63,274Patent Litigation
    
    
    5,379
    
    
    
    
    
    
    
    
    
    
    
    5,379Income (loss) before income taxes
    
    $
    131,723
    
    
    $
    (26,640
    )
    
    $
    (34,106
    )
    
    $
    70,977
 Global
    
    
    Impax
    
    
    Corporate
    
    
    TotalYear Ended December 31, 2008
    
    Division
    
    
    Division
    
    
    and Other
    
    
    CompanyRevenues, net
    
    $
    197,180
    
    
    $
    12,891
    
    
    $
    
    
    
    $
    210,071Cost of revenues
    
    
    80,724
    
    
    
    11,245
    
    
    
    
    
    
    
    91,969Research and development
    
    
    42,930
    
    
    
    16,307
    
    
    
    
    
    
    
    59,237Patent Litigation
    
    
    6,472
    
    
    
    
    
    
    
    
    
    
    
    6,472Income (loss) before income taxes
    
    $
    55,609
    
    
    $
    (17,332
    )
    
    $
    (12,268
    )
    
    $
    26,009
 Foreign Operations
   F-56




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##### Table of Contents



19. COMMITMENTS AND CONTINGENCIES
 Leases
  Years Ended(in $000s)
    
    December 31,2011
    
    $
    1,4692012
    
    
    1,3972013
    
    
    1,3772014
    
    
    1,1522015
    
    
    471Thereafter
    
    
    Total minimum lease payments
    
    $
    5,866
 Purchase Order Commitments
  Taiwan Facility
   F-57




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS
 Patent Litigation
        F-58




---



##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Patent Infringement Litigation
 AstraZeneca AD et al. v. Impax Laboratories, Inc. (Omeprazole)
 ® ®
 Aventis Pharmaceuticals Inc., et al. v. Impax Laboratories, Inc.
Fexofenadine/(Pseudoephedrine)
 ® ® ®
 ® ® ®
  F-59




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Endo Pharmaceuticals Inc., et al. v. Impax Laboratories, Inc. (Oxymorphone)
 ®
 Pfizer Inc., et aI. v. Impax Laboratories, Inc. (Tolterodine)
 ® Pfizer Inc. et al. v. Teva Pharmaceuticals USA, Inc. Pfizer
 Boehringer Ingelheim Pharmaceuticals, et al. v. Impax Laboratories, Inc. (Tamsulosin)
 ®
  F-60




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Purdue Pharma Products L.P., et al. v. Impax Laboratories, Inc. (Tramadol)
 ® ® Pharma Products L.P. et al, v. Par
Pharmaceutical, Inc. et al.
 Eli Lilly and Company v. Impax Laboratories, Inc. (Duloxetine)
 ®
 Warner Chilcott, Ltd. et.al. v. Impax Laboratories, Inc. (Doxycycline Hyclate)
 ®
 Eurand, Inc., et al. v. Impax Laboratories, Inc. (Cyclobenzaprine)
 ®
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Hydrochloride)
 ®
  F-61




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Carbonate)
 ®
 The Research Foundation of State University of New York et al. v. Impax Laboratories,
Inc. (Doxycycline Monohydrate)
 ®
 Elan Pharma International Ltd. and Fournier Laboratories Ireland Ltd. v. Impax
Laboratories, Inc. and Abbott Laboratories and Laboratories Fournier S.A. v. Impax
Laboratories, Inc. (Fenofibrate)
 ®
 Daiichi Sankyo, Inc. et al. v. Impax Laboratories, Inc. (Colesevelam)
 ®
 Abbott Laboratories, et al. v. Impax Laboratories, Inc. (Choline Fenofibrate)
 ®
 Shionogi Pharma, Inc. and LifeCycle Pharma A/S v. Impax Laboratories, Inc. (Fenofibrate)
 ®
  F-62




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Genzyme Corp. v. Impax Laboratories, Inc. (Sevelamer Carbonate Powder)
 ®
 Schering Corp., et al. v. Impax Laboratories, Inc. (Ezetimibe/Simvastatin)
 ®
 Abbott Laboratories, et al. v. Impax Laboratories, Inc. (Niacin-Simvastatin)
 ®
 Alza Corp., et al. v. Impax Laboratories, Inc., et al. (Methylphenidate)
 ®
 Daiichi Sankyo, Inc. et al. v. Impax Laboratories, Inc. (Colesevelam Powder)
 ®
 Shire LLC, et al. v. Impax Laboratories, Inc., et al. (Guanfacine)
 ®
  F-63




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##### Table of Contents



20. LEGAL AND REGULATORY MATTERS (continued)
 Other Litigation Related to Our Business
 Axcan Scandipharm Inc. v. Ethex Corp, et al. (Lipram UL)
 ® ®
 Budeprion XL Litigation
 Kelly v. Teva Pharmaceuticals Indus. Ltd, et al. Morgan v. Teva Pharmaceuticals Indus. Ltd, et a Weber v. Teva Pharmaceuticals Indus., Ltd., et al. Rosenfeld v. Teva Pharmaceuticals
USA, Inc.. et al. Henchenski and Vogel v. Teva
Pharmaceuticals Industries Ltd., et al. Anderson v.
Teva Pharmaceuticals Indus., Ltd., et al. Brown et al. v.
Teva Pharmaceuticals Inds., Ltd., et al. Latvala et al. v.
Teva Pharmaceuticals Inds., Ltd., et al. Jordan v. Teva
Pharmaceuticals Indus. Ltd et al. Leighty v. Teva Pharmaceuticals Indus. Ltd et al. ®
 Impax Laboratories, Inc. v. Shire LLC and Shire Laboratories, Inc. (generic Adderall XR)
   F-64




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##### Table of Contents



21. SUPPLEMENTARY FINANCIAL INFORMATION

(unaudited)
  2010 Quarters Ended:(in $000s except per share amounts)
    
    March 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Revenue:Global Product sales, gross
    
    $
    425,986
    
    
    $
    224,318
    
    
    $
    167,759
    
    
    $
    147,699Less:Chargebacks
    
    
    56,168
    
    
    
    49,420
    
    
    
    36,065
    
    
    
    39,913Rebates
    
    
    29,425
    
    
    
    16,739
    
    
    
    21,630
    
    
    
    17,666Product Returns
    
    
    7,400
    
    
    
    4,596
    
    
    
    8,344
    
    
    
    (4,519
    )Other credits
    
    
    23,888
    
    
    
    15,925
    
    
    
    10,669
    
    
    
    9,544Global Product sales, net
    
    
    309,105
    
    
    
    137,638
    
    
    
    91,051
    
    
    
    85,095Private Label Product sales
    
    
    672
    
    
    
    339
    
    
    
    528
    
    
    
    535Rx Partner
    
    
    4,903
    
    
    
    5,802
    
    
    
    202,799
    
    
    
    3,773OTC Partner
    
    
    1,765
    
    
    
    2,309
    
    
    
    2,365
    
    
    
    2,449Research Partner
    
    
    3,385
    
    
    
    3,494
    
    
    
    3,714
    
    
    
    3,715Promotional Partner
    
    
    3,503
    
    
    
    3,500
    
    
    
    3,535
    
    
    
    3,535Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total revenues
    
    
    323,333
    
    
    
    153,082
    
    
    
    303,992
    
    
    
    99,102Gross profit
    
    
    243,757
    
    
    
    84,190
    
    
    
    160,871
    
    
    
    50,445Net income
    
    $
    131,485
    
    
    $
    31,348
    
    
    $
    75,163
    
    
    
    12,422Net income per share (basic)
    
    $
    2.16
    
    
    $
    0.51
    
    
    $
    1.20
    
    
    $
    0.20Net income per share (diluted)
    
    $
    2.06
    
    
    $
    0.48
    
    
    $
    1.15
    
    
    $
    0.19Weighted Average:common shares outstanding:Basic
    
    
    61,008,015
    
    
    
    61,876,599
    
    
    
    62,435,116
    
    
    
    62,807,768Diluted
    
    
    63,865,678
    
    
    
    65,538,805
    
    
    
    65,470,341
    
    
    
    66,210,101
  ®
  F-65




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##### Table of Contents



21. SUPPLEMENTARY FINANCIAL INFORMATION (unaudited) (continued)
  2009 Quarters Ended:(in $000s except per share amounts)
    
    March 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Revenue:Global Product sales, gross
    
    $
    78,696
    
    
    $
    81,764
    
    
    $
    82,514
    
    
    $
    281,540Less:Chargebacks
    
    
    22,638
    
    
    
    24,844
    
    
    
    21,265
    
    
    
    57,358Rebates
    
    
    10,819
    
    
    
    13,425
    
    
    
    9,411
    
    
    
    38,965Returns
    
    
    3,256
    
    
    
    3,100
    
    
    
    2,030
    
    
    
    3,461Other credits
    
    
    2,862
    
    
    
    3,008
    
    
    
    3,172
    
    
    
    17,821Global Product sales, net
    
    
    39,121
    
    
    
    37,387
    
    
    
    46,636
    
    
    
    163,935Private Label Product sales
    
    
    1,297
    
    
    
    2,220
    
    
    
    1,752
    
    
    
    244Rx Partner
    
    
    10,736
    
    
    
    11,119
    
    
    
    8,328
    
    
    
    3,652OTC Partner
    
    
    1,858
    
    
    
    1,628
    
    
    
    1,769
    
    
    
    1,587Research Partner
    
    
    2,611
    
    
    
    2,833
    
    
    
    2,962
    
    
    
    3,274Promotional Partner
    
    
    3,284
    
    
    
    3,224
    
    
    
    3,499
    
    
    
    3,441Other
    
    
    6
    
    
    
    5
    
    
    
    
    
    
    
    1Total revenues
    
    
    58,913
    
    
    
    58,416
    
    
    
    64,946
    
    
    
    176,134Gross profit
    
    
    32,663
    
    
    
    31,132
    
    
    
    36,891
    
    
    
    87,410Net income
    
    $
    2,219
    
    
    $
    3,013
    
    
    $
    6,685
    
    
    $
    38,144Net income per share (basic)
    
    $
    0.04
    
    
    $
    0.05
    
    
    $
    0.11
    
    
    $
    0.63Net income per share (diluted)
    
    $
    0.04
    
    
    $
    0.05
    
    
    $
    0.11
    
    
    $
    0.61Weighted Average:common shares outstanding:Basic
    
    
    59,711,133
    
    
    
    60,112,308
    
    
    
    60,559,064
    
    
    
    60,721,808Diluted
    
    
    60,222,215
    
    
    
    60,552,344
    
    
    
    61,247,700
    
    
    
    62,288,318
  ®
  F-66




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##### Table of Contents



SCHEDULE II, VALUATION AND QUALIFYING ACCOUNTS
 For the Year Ended December 31, 2008
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column EBalance at
    
    
    Charge to
    
    
    Charge to
    
    
    
    
    
    Balance atBeginning of
    
    
    Costs and
    
    
    Other
    
    
    
    
    
    End ofDescription
    
    Period
    
    
    Expenses
    
    
    Accounts
    
    
    Deductions
    
    
    PeriodDeferred tax asset
valuation allowance
    
    $
    
    
    
    $
    333
    
    
    $
    
    
    
    $
    
    
    
    $
    333Inventory reserve
    
    
    3,148
    
    
    
    1,257
    
    
    
    
    
    
    
    
    
    
    
    4,405Reserve for bad debts
    
    
    550
    
    
    
    568
    
    
    
    
    
    
    
    (290
    )
    
    
    828
 For the Year Ended December 31, 2009
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column EBalance at
    
    
    Charge to
    
    
    Charge to
    
    
    
    
    
    Balance atBeginning of
    
    
    Costs and
    
    
    Other
    
    
    
    
    
    End ofDescription
    
    Period
    
    
    Expenses
    
    
    Accounts
    
    
    Deductions
    
    
    PeriodDeferred tax asset
valuation allowance
    
    $
    333
    
    
    $
    (333
    )
    
    $
    
    
    
    $
    
    
    
    $
    Inventory reserve
    
    
    4,405
    
    
    
    241
    
    
    
    
    
    
    
    
    
    
    
    4,646Reserve for bad debts
    
    
    828
    
    
    
    229
    
    
    
    
    
    
    
    (685
    )
    
    
    372
 For the Year Ended December 31, 2010
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column EBalance at
    
    
    Charge to
    
    
    Charge to
    
    
    
    
    
    Balance atBeginning of
    
    
    Costs and
    
    
    Other
    
    
    
    
    
    End ofDescription
    
    Period
    
    
    Expenses
    
    
    Accounts
    
    
    Deductions
    
    
    PeriodDeferred tax asset
valuation allowance
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Inventory reserve
    
    
    4,646
    
    
    
    648
    
    
    
    
    
    
    
    
    
    
    
    5,294Reserve for bad debts
    
    
    372
    
    
    
    277
    
    
    
    
    
    
    
    (110
    )
    
    
    539
  S-1




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##### Table of Contents



SIGNATURES
  IMPAX LABORATORIES, INC.By:
    /s/  Larry Hsu, Ph.D.Name:
    Larry Hsu, Ph.D.Title:
    President and Chief Executive Officer   Signature
    
    Title
    
    Date/s/Larry Hsu, Ph.D

Larry Hsu, Ph.D
    
    President, Chief
Executive Officer
(Principal Executive
Officer) and Director
    
    February 25, 2011/s/Arthur A. Koch, Jr.

Arthur A. Koch, Jr.
    
    Senior Vice President,
Finance, and Chief
Financial Officer
(Principal Financial
and Accounting
Officer)
    
    February 25, 2011/s/Leslie Z. Benet, Ph.D.

Leslie Z. Benet, Ph.D.
    
    Director
    
    February 25, 2011/s/Robert L. Burr

Robert L. Burr
    
    Chairman of the Board
    
    February 25, 2011/s/Nigel Ten Fleming, Ph.D.

Nigel Ten Fleming, Ph.D.
    
    Director
    
    February 25, 2011/s/Michael Markbreiter

Michael Markbreiter
    
    Director
    
    February 25, 2011/s/Allen Chao, Ph.D.

Allen Chao, Ph.D.
    
    Director
    
    February 25, 2011/s/Peter R. Terreri

Peter R. Terreri
    
    Director
    
    February 25, 2011
  II-1




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.

    Description of Document3.1.1
    


    Restated Certificate of Incorporation, dated August 30, 2004.(1)3.1.2
    


    Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with
the Secretary of State of Delaware on January 21, 2009.(2)3.2
    


    Amended and Restated Bylaws, effective June 29, 2009.(3)4.1
    


    Specimen of Common Stock Certificate.(4)4.2
    


    Form of Debenture (incorporated by reference to Exhibit A to the Indenture, dated as of June
27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee, listed on
Exhibit 4.3)4.3
    


    Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National
Association, as Trustee.(4)4.4
    


    Supplemental Indenture, dated as of July 6, 2005, between the Company and HSBC Bank USA,
National Association, as Trustee.(4)4.5
    


    Registration Rights Agreement, dated as of June 27, 2005, between the Company and the
Initial Purchasers named therein.(4)4.6
    


    Promissory Note dated June 7, 2006, issued by the Company to Solvay Pharmaceuticals, Inc.(4)4.7
    


    Preferred Stock Rights Agreement, dated as of January 20, 2009, by and between the Company
and StockTrans, Inc., as Rights Agent.(2)10.1.1
    


    Amended and Restated Loan and Security Agreement, dated as of December 15, 2005, between the
Company and Wachovia Bank, National Association.(4)10.1.2
    


    First Amendment, dated October 14, 2008, to Amended and Restated Loan and Security
Agreement, dated December 15, 2005, between the Company and Wachovia Bank, National
Association.(5)10.1.3
    


    Second Amendment to Amended and Restated Loan and Security Agreement, effective as of
December 31, 2008, by and among the Company and Wachovia Bank, National Association.(6)10.1.4
    


    Third Amendment to Amended and Restated Loan and Security Agreement, effective as of March
31, 2009, by and among the Company and Wachovia Bank, National Association.(7)10.1.5
    


    Fourth Amendment to Amended and Restated Loan and Security Agreement, effective as of March
12, 2010, by and among the Company and Wachovia Bank, National Association, a Wells Fargo
Company.(8)10.1.6
    


    Fifth Amendment to Amended and Restated Loan and Security Agreement, effective as of June
30, 2010, by and among the Company and Wells Fargo Bank, National Association, successor by
merger to Wachovia Bank, National Association.(9)10.1.7
    


    Sixth Amendment to Amended and Restated Loan and Security Agreement, effective as of
September 30, 2010, by and among the Company and Wells Fargo Bank, National Association,
successor by merger to Wachovia Bank, National Association.(10)10.1.8
    


    Seventh Amendment to Amended and Restated Loan and Security Agreement, effective as of
January 31, 2011, by and among the Company and Wells Fargo Bank, National Association,
successor by merger to Wachovia Bank, National Association.10.2
    


    Purchase Agreement, dated June 26, 2005, between the Company and the Purchasers named
therein.(4)10.3.1
    


    Impax Laboratories Inc. 1999 Equity Incentive Plan.*(6)10.3.2
    


    Form of Stock Option Grant under the Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(6)10.4
    


    Impax Laboratories Inc. 2001 Non-Qualified Employee Stock Purchase Plan.*(4)10.5.1
    


    Impax Laboratories Inc. Amended and Restated 2002 Equity Incentive Plan.*(11)10.5.2
    


    Form of Stock Option Grant under the Impax Laboratories, Inc. Amended and Restated 2002
Equity Incentive Plan.*(6)
  II-2




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##### Table of Contents



Exhibit No.

    Description of Document10.5.3
    
    
    
    Form of Stock Bonus Agreement under the Impax Laboratories, Inc. Amended and Restated 2002
Equity Incentive Plan.*(6)10.6.1
    
    
    
    Impax Laboratories Inc. Executive Non-Qualified Deferred Compensation Plan, amended and
restated effective January 1, 2008.*(8)10.6.2
    
    
    
    Amendment to Impax Laboratories Inc. Executive Non-Qualified Deferred Compensation Plan,
effective as of January 1, 2009.* (8)10.7.1
    
    
    
    Employment Agreement, dated December 14, 1999, by and between the Company and Larry Hsu,
Ph.D.*(5)10.7.2
    
    
    
    Amendment No. 1, dated May 19, 2009, to Employment Agreement, dated December 14, 1999, by
and between the Company and Larry Hsu, Ph.D.*(12)10.7.3
    
    
    
    Employment Agreement, dated as of January 1, 2010, between the Company and Larry Hsu,
Ph.D.*(13)10.8
    
    
    
    Employment Agreement, dated as of January 1, 2010, between the Company and Charles V.
Hildenbrand.*(13)10.9
    
    
    
    Employment Agreement, dated as of January 1, 2010, between the Company and Arthur A. Koch,
Jr.*(13)10.10
    
    
    
    Employment Agreement, dated as of January 1, 2010, between the Company and Michael J.
Nestor.*(13)10.11.1
    
    
    
    Offer of Employment Letter, effective as of January 5, 2009, between the Company and
Christopher Mengler.*(6)10.11.2
    
    
    
    Employment Agreement, dated as of January 1, 2010, between the Company and Christopher
Mengler, R.Ph.*(13)10.11.3
    
    
    
    Separation Agreement and General Release, dated October 19, 2010, by and between the Company
and Christopher Mengler, R.Ph.*(14)10.12
    
    
    
    License and Distribution Agreement, dated as of January 19, 2006, between the Company and
Shire LLC.**(15)10.13
    
    
    
    Joint Development Agreement, dated as of November 26, 2008, between the Company and Medicis
Pharmaceutical Corporation.**(15)10.14
    
    
    
    License, Development and Commercialization Agreement, dated as of December 15, 2010, by and
between the Company and Glaxo Group Limited.***10.15
    
    
    
    Supply Agreement, dated as of December 15, 2010, by and between the Company and Glaxo Group
Limited.***11.1
    
    
    
    Statement re computation of per share earnings (incorporated by reference to Note 17 to the
Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K).21.1
    
    
    
    Subsidiaries of the registrant.
  II-3




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##### Table of Contents



Exhibit No.


    Description of Document23.1
    


    Consent of Grant Thornton LLP.31.1
    


    Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    


    Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    


    Certifications of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    


    Certifications of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  *
    
    Management contract, compensatory plan or arrangement.**
    
    Confidential treatment granted for certain portions of this exhibit pursuant to Rule 24b-2
under the Exchange Act, which portions are omitted and filed separately with the SEC.***
    
    Confidential treatment requested for certain portions of this exhibit pursuant to Rule 24b-2
under the Exchange Act, which portions are omitted and filed separately with the SEC.(1)
    
    Incorporated by reference to Amendment No. 5 to the Companys Registration Statement on Form
10 filed on December 23, 2008.(2)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on January 22,
2009.(3)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on July 2, 2009.(4)
    
    Incorporated by reference to the Companys Registration Statement on Form 10 filed on October
10, 2008.(5)
    
    Incorporated by reference to Amendment No. 2 to the Companys Registration Statement on Form
10 filed on December 2, 2008.(6)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2008.(7)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009.(8)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2010.(9)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010.(10)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended September 30, 2010.(11)
    
    Incorporated by reference to the Companys Definitive Proxy Statement on Schedule 14A filed
on April 14, 2010.(12)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarter
ended June 30, 2009.(13)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on January 14,
2010.(14)
    
    Incorporated by reference to the Companys Current Report on Form 8-K filed on October 22,
2010.(15)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2009.  II-4