There are many factors that affect our business, our financial condition, and the results of our operations. In addition to the information set forth in this quarterly report, you should carefully read and consider “Item 1A. Risk Factors” in Part I, and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, of our 2025 Annual Report on Form 10-K filed with the SEC, which contain a description of significant factors that might cause our actual results of operations in future periods to differ materially from those currently expected or desired. Tariffs could adversely affect our business. President Donald Trump and Commerce Secretary Howard Lutnick have each signaled plans for the Administration to potentially tax pharmaceutical imports through tariffs. In furtherance of that goal, on April 16, 2025, the U.S. Department of Commerce posted a notice in the Federal Registry announcing that it would begin a probe "to determine the effects on national security of imports of pharmaceuticals and pharmaceutical ingredients" under section 232 of the Trade Expansion Act of 1962, as amended, the results of which could lead to tariffs on pharmaceutical imports. We source our API and finished drug products from both U.S. and foreign suppliers. Additionally, we currently purchase AGAMREE® active ingredients from Santhera while working to complete our own manufacturer arrangements for the product and also purchase FYCOMPA® supplies from Eisai through at least the end of 2029, both of which source from outside of the U.S. If tariffs make purchases of materials from certain jurisdictions untenable, we may need to obtain materials from other sources, if possible, which could also increase our costs and delay our planned clinical trials and manufacture of our products and product candidates. Further, retaliatory tariffs introduced by other countries could affect the sales of our products outside of the United States. Finally, royalties owed as part of our license arrangements may be subject to tariffs. Any of these factors may adversely affect our financial condition or results of operations. Most Favored Nation (MFN Pricing) of drug products could adversely affect our business. The Trump Administration has discussed the possibility that pricing of drugs in other countries could be used to price drug products for sale in the U.S. Recently, President Trump sent letters to 17 major pharmaceutical companies with a list of demands, including MFN pricing to all drugs provided to Medicaid enrollees. He stated in the letter that he wants companies to guarantee that Medicaid, Medicare, and commercial market insurers pay such prices for all new drugs, and he gave the companies 60 days to comply. To date, 16 of the 17 largest pharmaceutical conglomerates have reached deals with the Administration for relief on this issue and on potential tariffs with other companies being invited to negotiate similar deals. To date, Catalyst has not been invited to do so. There can be no assurance as to what impact such rules, if adopted, might have on our financial condition and results of operations. If our proposed Merger does not close, or is delayed, we may experience financial and operational disruptions. In addition our stock price may decline if the Merger is perceived as uncertain to close. On May 6, 2026, we entered into a Merger Agreement to be acquired by Angelini Pharma. The closing of the Merger is subject to the satisfaction or waiver of certain conditions, many of which are not within our full control. We currently expect that the Merger will be completed in the third quarter of fiscal year 2026. However, we may be unable to obtain and satisfy, or experience delays in obtaining and satisfying, required regulatory approvals, stockholder approvals, and other closing conditions. In addition, both we and Angelini Pharma may terminate the Merger Agreement for reasons specified therein. The announcement and pendency of the Merger could adversely affect our business and stock price, including if the Merger does not close or is delayed, for reasons including the following: •Uncertainty about the effect of the Merger may impair our ability to attract, retain, and motivate key personnel, and could cause customers, suppliers, financial counterparties, and others to seek to change existing business relationships with us. •The Merger Agreement restricts us, without the consent of Angelini Pharma, from making certain acquisitions and investments, from accessing the debt and capital markets, and from taking other specified actions until closing of the Merger or the termination of the Merger Agreement. These restrictions may prevent us from pursuing otherwise attractive business opportunities and taking other actions with respect to our business that we may consider advantageous. 50 Table of Contents •Our costs of accessing funds in the debt and capital markets may be higher than before execution of the Merger Agreement as a result of actions that could be taken by ratings agencies after announcement of the transaction. •We have incurred, and will continue to incur, significant costs, expenses, and fees for professional services and other transaction costs in connection with the Merger. Many of the fees and costs will be payable by us even if the Merger is not completed. In addition, we may be required to pay a termination fee of approximately $155.5 million to Angelini Pharma, and reimburse certain out-of-pocket expenses, if the Merger Agreement is terminated for certain specified reasons. •The Merger may not occur on the expected timeline because of a delay in receiving required regulatory approvals, stockholder approvals or other reasons. Any delay or inability to close the Merger may cause the market price of our common stock to decline. Lawsuits may be filed against us and the members of our Board of Directors arising out of the proposed Merger, which may delay or prevent the proposed Merger or otherwise negatively affect our business and operations. Putative stockholder complaints, including stockholder class action complaints, and other complaints may be filed against us, our Board of Directors and others in connection with the transactions contemplated by the Merger Agreement. The outcome of any such litigation is uncertain, and we may not be successful in defending against any such future claims. Lawsuits that may be filed against us, our Board of Directors or others could delay or prevent the Merger from being completed, divert the attention of our management and employees away from our day-to-day business, and otherwise adversely affect our business, results of operations, and financial condition. If the Merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Merger.