UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2016

Impax Laboratories, Inc.
(Exact name of registrant as specified in its charter)

					
Delaware  	 	001-34263  	 	65-0403311	
 	 	 	 	 	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
30831 Huntwood Avenue
Hayward, California 94544 
(Address of principal executive offices)
Registrant’s telephone number, including area code: (510) 240-6000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note
On August 3, 2016, Impax Laboratories, Inc. (“Impax” or the “Company”) filed a Current Report on Form 8-K (the “Initial 8-K”) to report, among other items, the completion on that date of (A) its acquisition of certain assets related to (i) 15 currently marketed generic pharmaceutical products, (ii) one approved generic product and two tentatively approved strengths of a currently marketed product, which have not yet launched, (iii) one pipeline generic product and one pipeline strength of a currently marketed product, which are pending approval by the U.S. Food and Drug Administration (the “FDA”) and (iv) one generic product under development, and (B) the return to the Company of its full commercial rights to its pending Abbreviated New Drug Application for the generic equivalent to Concerta® (methylphenidate hydrochloride), a product the Company previously partnered with Teva Pharmaceuticals USA, Inc. (“Teva USA”) (collectively, the products and pipeline products and the assets related thereto in (A) and (B), the “Acquired Product Lines” and the transactions related thereto the “Teva Transaction”), pursuant to (x) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with Teva Pharmaceutical Industries Ltd. (“Teva”), acting directly or through its affiliates (the “Teva APA”), (y) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with affiliates of Allergan plc (“Allergan”), including Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc. and Watson Laboratories, Inc. (the “Allergan APA”), and (z) a Termination Agreement, dated as of June 20, 2016, between the Company and Teva USA, terminating each party’s rights and obligations with respect to methylphenidate hydrochloride under the Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva USA. The aggregate purchase price for the Acquired Product Lines pursuant to the terms of the Teva APA and the Allergan APA, including the upfront payment to Teva in accordance with the Termination Agreement, was $585.8 million in cash at closing. The Company is also obligated to make future payments to Teva of up to $40.0 million under the terms of the Termination Agreement, payable upon the achievement of specified commercialization events related to methylphenidate hydrochloride. The Teva Transaction was part of the divestiture process mandated by the Federal Trade Commission in connection with the acquisition by Teva of the U.S. generics business of Allergan.
The Company also reported on the Initial 8-K that on August 3, 2016, the Company entered into a restatement agreement among the Company, Royal Bank of Canada (“RBC”), as administrative agent, and the lenders and guarantors party thereto (the "Restatement Agreement"). The Restatement Agreement amends and restates the Company’s Revolving Credit Facility Agreement, dated as of August 4, 2015, among the Company, as borrower, RBC, as administrative agent and collateral agent, the lenders party thereto, and the other agents and parties thereto (as amended and restated, the “Amended and Restated Credit Agreement”) to, among other things, (i) add a term loan feature to allow for the borrowing of up to $400.0 million of term loans (the “Term Loan Facility”) by the Company in accordance with the terms of the Amended and Restated Credit Agreement, (ii) increase the aggregate principal amount of the revolving loans permitted under the Amended and Restated Credit Agreement (the “Revolving Credit Facility,” and, together with the Term Loan Facility, the “RBC Credit Facilities”) from $100.0 million to $200.0 million, and (iii) extend the maturity date of the Revolving Credit Facility from August 4, 2020 to August 3, 2021. Proceeds of $400.0 million from the Term Loan Facility were used to finance the Teva Transaction. The full amount of the $200.0 million Revolving Credit Facility remains available to the Company for working capital and other general corporate purposes.
This Amendment No. 1 to the Form 8-K (“this Amendment”) amends the Initial 8-K to include the historical audited financial information related to the Acquired Product Lines and the pro forma combined financial information required by Items 9.01(a) and 9.01(b) of Form 8-K that were excluded from the Initial Form 8-K in reliance on the instructions to those items. Any information required to be set forth in the Initial 8-K which is not being amended or supplemented pursuant to this Amendment is hereby incorporated by reference. Except as set forth herein, no modifications have been made to the information contained in the Initial 8-K, and the Company has not updated the information contained therein to reflect events that have occurred since the date of the Initial 8-K. Accordingly, this Amendment should be read in conjunction with the Initial 8-K.
Item 9.01      Financial Statements and Exhibits.

(a)      Financial Statements of Businesses Acquired.
The audited special purpose combined financial statements of Certain Pharmaceuticals Products of each of Teva Pharmaceuticals Industries Limited ("Teva") and Allergan plc ("Allergan"), comprised in each case of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines are filed as Exhibits 99.1 and 99.2, respectively, to this Amendment and are incorporated herein by reference.
The unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of each of Teva and Allergan, comprised in each case of the special purpose combined statements of assets acquired as of June 30, 2016 and the

related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines are filed as Exhibits 99.3 and 99.4, respectively, to this Amendment and are incorporated herein by reference.
(b)      Pro Forma Financial Information.
The unaudited pro forma combined balance sheet as of June 30, 2016 and statements of operations for the year ended December 31, 2015 and the six months ended June 30, 2016, giving effect to the Teva Transaction, including the Credit Facilities entered into by the Company to finance the Teva Transaction, as if such transactions had occurred on January 1, 2015, of the Company are filed as Exhibit 99.5 to this Amendment and incorporated herein by reference.

		
Exhibit No.	Description	
23.1	Consent of PricewaterhouseCoopers LLP related to the special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited.	
23.2	Consent of PricewaterhouseCoopers LLP related to the special purpose combined financial statements of Certain Pharmaceutical Products of Allergan plc.	
99.1	Audited special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited, comprised of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines.	
99.2	Audited special purpose combined financial statements of Certain Pharmaceutical Products of Allergan plc, comprised of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines.	
99.3	Unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited, comprised of the special purpose combined statements of assets acquired as of June 30, 2016 and the related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines.	
99.4	Unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of Allergan plc, comprised of the special purpose combined statements of assets acquired as of June 30, 2016 and the related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines.	
99.5	Unaudited pro forma combined balance sheet as of June 30, 2016 and statements of operations for the year ended December 31, 2015 and the six months ended June 30, 2016, and the related notes, of Impax Laboratories, Inc.	

SIGNATURES
         Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			
 	 	IMPAX LABORATORIES, INC.	
Date: October 19, 2016	By:	/s/ Bryan M. Reasons	
 	 	Name: Bryan M. Reasons	
 	 	Title: Senior Vice President, Finance and Chief Financial Officer	

EXHIBIT INDEX

		
Exhibit No.	Description	
23.1	Consent of PricewaterhouseCoopers LLP related to the special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited.	
23.2	Consent of PricewaterhouseCoopers LLP related to the special purpose combined financial statements of Certain Pharmaceutical Products of Allergan plc.	
99.1	Audited special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited, comprised of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines.	
99.2	Audited special purpose combined financial statements of Certain Pharmaceutical Products of Allergan plc, comprised of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines.	
99.3	Unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited, comprised of the special purpose combined statements of assets acquired as of June 30, 2016 and the related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines.	
99.4	Unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of Allergan plc, comprised of the special purpose combined statements of assets acquired as of June 30, 2016 and the related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines.	
99.5	Unaudited pro forma combined balance sheet as of June 30, 2016 and statements of operations for the year ended December 31, 2015 and the six months ended June 30, 2016, and the related notes, of Impax Laboratories, Inc.	

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-213677, 333-189360, 333-168584 and 333-158259) of Impax Laboratories, Inc. of our report dated October 7, 2016 relating to the special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited, which appears in this Current Report on Form 8‑K/A of Impax Laboratories, Inc.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 19, 2016

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-213677, 333-189360, 333-168584 and 333-158259) of Impax Laboratories, Inc. of our report dated October 17, 2016 relating to the special purpose combined financial statements of Certain Pharmaceutical Products of Allergan plc, which appears in this Current Report on Form 8-K/A of Impax Laboratories, Inc.

/s/ PricewaterhouseCoopers LLP

Florham Park, New Jersey
October 17, 2016

Exhibit 99.1

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

Special Purpose Combined Financial Statements of Assets Acquired as of December 31, 2015 and 2014, and Special Purpose Combined Statements of Revenue and Direct Expenses of the Years Ended December 31, 2015, 2014 and 2013.

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

	
		
INDEX	 	
Independent Auditor’s Report	1	
Special Purpose Combined Statements of Assets Acquired	3	
Special Purpose Combined Statements of Revenues and Direct Expenses	4	
Notes to Special Purpose Combined Financial Statements	5	

Independent Auditor’s Report

To the Management of
Teva Pharmaceuticals Industries Limited

We have audited the accompanying special purpose combined financial statements of Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited (the “Company”), which comprise the special purpose combined statements of assets acquired as of December 31, 2015 and 2014, and the related special purpose combined statements of revenues and direct expenses for each of the three years in the period ended December 31, 2015.

Management’s Responsibility for the Special Purpose Combined Financial Statements
Management is responsible for the preparation and fair presentation of the special purpose combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the special purpose combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on the special purpose combined financial statements based on our audits.We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special purpose combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special purpose combined financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the special purpose combined financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the special purpose combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special purpose combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the special purpose financial statements referred to above present fairly, in all material respects, the assets acquired of the Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited, as of December 31, 2015 and December 31, 2014, and the results of their revenues and direct expenses for each of the three years in the period ended December 31, 2015 in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
The accompanying special purpose combined financial statements were prepared in connection with the Company’s transactions related to the Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited and, as described in Note 1, were prepared in accordance with an SEC waiver received by the buyer, for the purposes of the buyer complying with Rule 3-05 of the Securities and Exchange Commission’s Regulation S-X. These special purpose combined financial statements are not intended to be a complete presentation of the financial position or results of operations of the Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 7, 2016

1

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

SPECIAL PURPOSE COMBINED STATEMENTS OF ASSETS ACQUIRED
(U.S. dollars in thousands)

	
								
 	December 31, 2015	 	December 31, 2014	
Intangible assets, net – product rights	$	12,752		 	$	17,768		
Total assets acquired	$	12,752		 	$	17,768		

The accompanying notes are an integral part of these special purpose combined financial statements.

2

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

SPECIAL PURPOSE COMBINED STATEMENTS OF REVENUES AND DIRECT EXPENSES
(U.S. dollars in thousands)

	
												
 	December 31, 2015	 	December 31, 2014	 	December 31, 2013	
Net product revenues	$	57,124		 	$	15,854		 	$	41,585		
   Cost of sales (excluding amortization of intangibles)	19,351		 	23,148		 	27,409		
   Amortization	5,016		 	5,016		 	5,016		
   Research and development expenses	1,613		 	—		 	—		
   Selling, general and administrative expenses	3,538		 	2,852		 	5,465		
   Total direct expenses	$	29,518		 	$	31,016		 	$	37,890		
Revenues net of direct expenses	$	27,606		 	$	(15,162	)	 	$	3,695		

The accompanying notes are an integral part of these special purpose combined financial statements.

3

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

Notes to Special Purpose Combined Financial Statements

NOTE 1 – Background

Teva Pharmaceutical Industries Limited (the “Parent Company”), headquartered in Israel, together with its subsidiaries and associated companies (the “Company,” “Teva” or the “Group”), is engaged in the development, manufacturing, marketing and distribution of generic, specialty, and other pharmaceutical products. The majority of the Group’s revenues are in the United States and Europe. The Group’s main manufacturing facilities are located in Israel, Hungary, United States, Germany, Canada, Japan, Ireland, the United Kingdom, the Czech Republic, Croatia, Italy and India.

Impax Laboratories, Inc. (“Impax”) entered into an Asset Purchase Agreement (the “Teva Purchase Agreement”) with an affiliate of Teva to purchase respective rights to certain pharmaceutical products (the “Products”) in connection with the divestitures of the Products related to the acquisition of certain businesses and assets by Teva pursuant to the Master Purchase Agreement dated as of July 26, 2015 by and between Allergan plc and Teva. Impax acquired from Teva certain existing assets and rights related to the development, manufacture, import, export, commercialization, distribution, marketing, use, storage, transport, promotion, disposition or sales of the Products.

NOTE 2 – Basis of presentation

The accompanying Special Purpose Combined Financial Statements (the “Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and derived from Teva’s books and records and certain of its affiliates and only present the assets acquired and the Products’ revenues and direct expenses, including certain allocated expenses. It is impracticable to prepare complete financial statements related to the Products as Teva never accounted for them on a stand-alone basis, as a separate division or subsidiary. Teva never prepared full stand-alone or full carve-out financial statements for these Products and has never maintained the distinct and separate accounts necessary to prepare such financial statements.

These Financial Statements are based upon the Teva Purchase Agreements and relief from SEC Rule 3-05, Significant Acquisition Carve-out Financial Statement Reporting Requirements , obtained by Impax from the Securities and Exchange Commission. These Financial Statements are not intended to be a complete presentation of the financial position, results of operations or cash flows in conformity with accounting principles generally accepted in the United States of America. The operations of these Products rely, to varying degrees, on Teva and certain of its affiliates for marketing, sales order processing, billing, collection, procurement, customer service, warehousing, information technology, insurance, human resources, accounting, regulatory, treasury, and legal support, and these expenses have been allocated in these Financial Statements. These Financial Statements are not indicative of the financial condition or results of operations of the acquired Products on a stand-alone basis, because of the reliance of these Products on Teva and certain of its affiliates.

A provision for income taxes has not been presented in the Financial Statements as these Products were never functioning as a stand-alone unit; accordingly, no allocation of income tax provision/benefit has been made to these Products.

During the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013, these Products did not have any stand-alone financing requirements, and any cash generated was swept to Teva. As the Products have historically been managed as part of the operations of Teva and certain of its affiliates and have not been operated as a stand-alone entity, it is not practical to prepare historical cash flow information regarding the Products’ operating, investing, and financing cash flows. As such, statements of cash flows were not prepared.

NOTE 3 – Certain expenses and allocations

Certain costs and expenses have been allocated by Teva on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method (primarily net product revenues). Management considers that such allocations have been made on a reasonable basis, but may not necessarily be indicative of the costs that would have been incurred if the Products had been operated on a stand-alone basis for the periods presented.

Cost of sales primarily includes allocations for labor and overhead incurred by Teva for these Products. Selling, general and administrative costs includes certain product-specific legal and product liability costs, and allocated expenses primarily related to cost of labor, costs of outside services and various other costs.

4

NOTE 4 – Significant accounting policies

Use of estimates

The preparation of these Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make certain estimates and assumptions that affect the amounts reported. The estimates and associated assumptions are based on historical experience, complex judgments and various other factors that are believed to be reasonable under the circumstances but are inherently uncertain. The estimation process required to prepare the Financial Statements, including but not limited to, allocations of costs and expenses from the Parent, accounting for deductions from revenue (e.g., rebates, sales discounts, allowances and incentives), determination of useful lives for intangible assets and the assessment of expected cash flow used in evaluating long-lived assets for impairment. Actual results may or may not differ from these estimates. Also, as discussed in note 3, these Financial Statements include allocations and estimates that are not necessarily indicative of the amounts that would have resulted if the Products had been operated on a stand-alone basis.

Intangible assets

Intangible assets are amortized using the straight-line method over their estimated period of useful life. Amortization of acquired developed products is recorded under cost of sales. Amortization periods for product rights are based on Teva’s assessment of various factors impacting estimated useful lives and cash flows. Such factors include the product’s position in its life cycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. Significant changes to any of these factors may result in a reduction in the intangible’s useful life and an acceleration of related amortization expense. Teva reviews its long lived assets and performs detailed testing whenever potential impairment indicators are present. The impairment testing involves comparing the carrying amount of the asset to the forecasted undiscounted future cash flows. In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and the impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using discounted future cash flows.

Revenue recognition

The Company recognizes revenues from sales when persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable and collectability is reasonably assured. This generally occurs when products are shipped and title and risk and rewards for the products are transferred to the customer.

Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, returns, Medicaid, prompt pay discounts and other deductions, which can be reasonably estimated. When sales provisions are not considered reasonably estimable by Teva, the revenue is deferred to a future period when more information is available to evaluate the impact.

Calculations for these deductions from sales are based on historical experience and the specific terms in the individual agreements. Chargebacks and rebates are the largest components of sales reserves and allowances. Provisions for chargebacks are determined using historical chargeback experience and expected chargeback levels. Rebates are recognized based on contractual obligations in place at the time of sales with consideration given to relevant factors that may affect the payment as well as historical experience for estimated market activity.

The following table summarizes the charges recognized for Sales, Reserves and Allowances provisions ($ in thousands):

	
																					
 	 	Chargebacks	 	Rebates	 	Return and Other Allowances	 	Cash Discounts	 	Total	
Year Ended December 31, 2013	 	$	57,001		 	$	11,678		 	$	4,365		 	$	2,339		 	$	75,383		
Year Ended December 31, 2014	 	$	127,022		 	$	21,364		 	$	5,408		 	$	3,462		 	$	157,256		
Year Ended December 31, 2015	 	$	113,621		 	$	23,026		 	$	7,457		 	$	4,107		 	$	148,211		

Research and development expenses

Research and development expenses are charged to income as incurred. Research and development in-process acquired as part of an asset purchase, which has not reached technological feasibility and has no alternative future use, is expensed as incurred.

5

Shipping and handling costs

Shipping and handling costs incurred which are not material to these Products, are expensed in the year incurred and are included in “selling, general and administrative costs” on these Financial Statements.

Advertising expenses

Advertising expenses are charged to income as incurred. Costs associated with advertising, which are not material to these Products, are expensed in the year incurred and are included in “selling, general and administrative costs” on these Financial Statements.

Recent accounting pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance on stock compensation. The guidance is intended to simplify several aspects of the accounting for share-based payments, including income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Parent Company has adopted the provisions of this update during 2016. The guidance did not have a material impact on the Company’s Financial Statements.

In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In March, April and May 2016, the FASB issued three additional updates regarding identifying performance obligations and licensing, certain principal versus agent considerations, and various narrow scope improvements based on practical questions raised by users. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017 (early adoption is permitted for the interim and annual periods beginning on or after December 15, 2016). The guidance permits the use of either a retrospective or cumulative effect transition method. The Parent Company is currently evaluating the impact of the guidance on its consolidated financial statements.

NOTE 5 – Intangible assets, net

As of December 31, 2015 and December 31, 2014, the gross and net amounts of intangible assets were (in thousands):

	
								
 	December 31, 2015	 	December 31, 2014	
Product rights	$	48,627		 	$	48,627		
Accumulated amortization	35,875		 	30,859		
Intangible assets, net	$	12,752		 	$	17,768		

Amortization of intangible assets amounted to $5,016 thousand for the years ended December 31, 2015, 2014 and 2013. Amortization was deducted from “net product revenues” in order to calculate “revenues net of direct expenses” on these Financial Statements.

As of December 31, 2015, the estimated aggregate amortization of intangible assets for the years 2016 to 2020 is as follows: 2016 to 2019—$2,492 thousand; 2020—$2,063 thousand.

NOTE 6 – Subsequent events

The Company has evaluated transactions that occurred as of the issuance of these Financial Statements, October 7, 2016, for purposes of disclosures of unrecognized subsequent events.

6

Exhibit 99.2

Certain Pharmaceutical Products of Allergan plc

Special Purpose Combined Statements of Net Assets Acquired as of December 31, 2015 and
December 31, 2014 and Special Purpose Combined Statements of Revenues and Direct Expenses for
the years ended December 31, 2015, 2014 and 2013

Certain Pharmaceutical Products of Allergan plc

Index to Unaudited Special Purpose Combined Financial Statements

	
		
Independent Auditor’s Report	3	
Special Purpose Combined Statement of Net Assets Acquired as of December 31, 2015 and December 31,
2014	4	
Special Purpose Combined Statements of Revenues and Direct Expenses for the years ended December 31,
2015, 2014 and 2013	5	
Notes to Special Purpose Combined Financial Statements	6	

2

Independent Auditor’s Report

To the Management of Allergan plc:

We have audited the accompanying special purpose combined financial statements of the Certain Pharmaceutical Products of Allergan plc, which comprise the special purpose combined statements of net assets acquired as of December 31, 2015 and 2014, and the related special purpose combined statements of revenues and direct expenses for the years ended December 31, 2015, 2014 and 2013.

Management’s Responsibility for the Special Purpose Combined Financial Statements

Management is responsible for the preparation and fair presentation of the special purpose combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of special purpose combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the special purpose combined financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special purpose combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special purpose combined financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the special purpose combined financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the special purpose combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special purpose combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the special purpose combined financial statements referred to above present fairly, in all material respects, the financial position of the Certain Pharmaceutical Products of Allergan plc as of December 31, 2015 and December 31, 2014, and the results of its revenues and direct expenses for the years ended December 31, 2015, 2014 and 2013 in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying special purpose combined financial statements were prepared in connection with the Company’s transaction related to the Certain Pharmaceutical Products of Allergan plc and, as described in Note 1, were prepared in accordance with a SEC waiver received by the buyer, for the purposes of the buyer complying with Rule 3-05 of the Securities and Exchange Commission’s Regulation S-X. These special purpose combined financial statements are not intended to be a complete presentation of the financial positon or results of operations of Certain Pharmaceutical Products of Allergan plc. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers LLP

Florham Park, New Jersey
October 17, 2016

3

Certain Pharmaceutical Products of Allergan plc

Special Purpose Combined Statements of Net Assets Acquired December 31, 2015 and 2014

($ in thousands)

	
								
 	December 31,	
 	2015	 	2014	
Assets acquired:		 		
Inventories, net	$	3,644		 	$	3,285		
Intangible assets	59,960		 	70,774		
Total assets acquired	$	63,604		 	$	74,059		

The accompanying notes are an integral part of these special purpose combined financial statements.

4

Certain Pharmaceutical Products of Allergan plc

Special Purpose Combined Statements of Revenues and Direct Expenses for the years ended December 31,
2015, 2014, and 2013

($ in thousands)

	
													
 	 	Years ended December 31,	
 	 	2015	 	2014	 	2013	
Net revenues	 	$	108,005		 	$	26,441		 	$	45,763		
Direct expenses:	 	 	 	 	 	 	
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)	 	23,829		 	14,736		 	26,783		
Research and development	 	24		 	24		 	126		
Selling and marketing	 	2,190		 	515		 	924		
General and administrative	 	7,518		 	6,678		 	3,066		
Amortization	 	8,027		 	647		 	18,177		
Total direct expenses	 	41,588		 	22,600		 	49,076		
Revenues less direct expenses	 	$	66,417		 	$	3,841		 	$	(3,313	)	

The accompanying notes are an integral part of these special purpose combined financial statements.

5

NOTES TO THE SPECIAL PURPOSE COMBINED FINANCIAL STATEMENTS

NOTE 1 —Basis of Presentation

Background

Allergan plc (“Allergan” or the “Company”) is a global specialty pharmaceutical company engaged in the development, manufacturing, marketing, and distribution of brand name pharmaceutical products (“brand”, “branded” or “specialty brand”), medical aesthetics, generic, branded generic, biosimilar and over-the-counter (“OTC”) pharmaceutical products. The Company has operations in more than 100 countries. The Generics Business (defined below) is focused on maintaining a leading position within both the North American, and in particular, the United States (“U.S.”), market and key international markets and strengthening its global position by offering a consistent and reliable supply of quality products.

On July 26, 2015 Allergan plc entered into a master purchase agreement (the “Teva Agreement”), under which on August 2, 2016, Teva Pharmaceutical Industries Ltd. (“Teva”) acquired Allergan plc’s global generic pharmaceuticals business and certain other assets (the “Teva Transaction”). Upon the closing of the Teva Transaction on August 2, 2016, Allergan plc received $33.4 billion in cash which includes estimated working capital and other contractual adjustments, and 100.3 million unregistered Teva ordinary shares (or American Depository Shares with respect thereto), which approximated $5.0 billion in value using the closing date Teva opening stock price discounted at a rate of 5.9 percent due to the lack of marketability. As part of the Teva Agreement, Teva acquired our global generics business, including the United States (“U.S.”) and international generic commercial units, our third-party supplier Medis, our global generic manufacturing operations, our global generic research and development (“R&D”) unit, our international OTC commercial unit (excluding OTC eye care products) and some established international brands.

On June 20, 2016, lmpax Laboratories, Inc. (“Impax”) entered into (i) an Asset Purchase Agreement (the “Teva Purchase Agreement”) with an affiliate of Teva (which was further amended on June 30, 2016) and (ii) an Asset Purchase Agreement (the “Allergan Purchase Agreement”, together with the Teva Purchase Agreement, the “Purchase Agreements”) with an affiliate of Allergan plc (“Allergan’’, together with Teva, the “Sellers”) to purchase the Sellers’ respective rights to certain pharmaceutical products (the “Products”) in connection with the Teva Transaction. Pursuant to the Purchase Agreements, Impax acquired from Teva (and in conjunction Allergan plc) certain existing assets and rights related to the development, manufacture, import, export, commercialization, distribution, marketing, use, storage, transport, promotion, disposition or sales of the Products (the “Impax Agreement”). The closings under the Purchase Agreements occurred on August 3, 2016.

Basis of Presentation

The accompanying Special Purpose Combined Financial Statements (the “Financial Statements”) are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These Financial Statements are based upon the Purchase Agreements and relief from SEC Rule 3-05, Significant Acquisition Carve-out Financial Statement Reporting Requirements , obtained by Impax from the Securities and Exchange Commission. These Financial Statements are not intended to be a complete presentation of financial position, results of operations, or cash flows of the Products in conformity with GAAP.

Due to the extent to which the Products have been integrated into Allergan during the periods required to be covered by the Financial Statements, the presentation of full or carve-out financial statements for the Products in accordance with the Securities and Exchange Commission’s Regulation S-X, including a reasonable and appropriate allocation of corporate overhead, interest and taxes, is impracticable. Thus, Statements of Net Assets Acquired and Statements of Revenues and Direct Expenses have been prepared.

The Financial Statements have been derived from the accounting records of Allergan using historical results of operations and financial position and only present the net assets acquired and the associated revenues and direct expenses, including certain allocated expenses, of the Products. The net assets acquired include the raw materials of pharmaceutical products and intangible assets specifically identified in the Impax Agreement.

The Financial Statements are not necessarily indicative of the results of operations that would have occurred if the Products had been an independent company.

Allocation of Costs & Expenses

These Financial Statements include revenues generated by the Products, less expenses directly attributable to the Products, and allocations of direct operating costs incurred by Allergan relating to the Products. Direct expenses attributable to the specific

6

products include such items as cost of goods sold, research and development, legal expense, and amortization. Selling and marketing and general and administrative expenses (with the exception of legal expenses) were attributed to the Products utilizing an allocation methodology based on a percentage of sales. The Financial Statements reflect a consistent application of methodology for each reporting period presented. Allocations of Allergan corporate overhead not directly related to the operations of the Products, as well as allocations of interest or income taxes, have been excluded from these Financial Statements.

NOTE 2 —Summary of Significant Accounting Policies

Use of Estimates

Management is required to make certain estimates and assumptions in order to prepare the Financial Statements in conformity with GAAP. Such estimates and assumptions affect the reported amounts of revenues and expenses and disclosure of assets in the consolidated financial statements and accompanying notes. The Products’ most significant estimates relate to the determination of SRAs (defined below), determination of useful lives for intangible assets, inventory valuation and the assessment of expected cash flows used in evaluating long-lived assets for impairment. The estimation process required to prepare the Products’ Financial Statements requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain. The Products’ actual results could differ materially from those estimates. The Financial Statements include estimates that are not necessarily indicative of the amounts that would have resulted if the Products had been operated as a stand-alone entity.

Product Rights and Other Definite-Lived Intangible Assets

Our product rights and other definite-lived intangible assets are stated at cost, less accumulated amortization, and are amortized using the economic benefit model or the straight-line method, over their estimated useful lives. We determine amortization periods for product rights and other definite-lived intangible assets based on our assessment of various factors impacting estimated useful lives and cash flows. Such factors include the product’s position in its life cycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. Significant changes to any of these factors may result in a reduction in the intangibles useful life and an acceleration of related amortization expense, which could cause our net results to decline.

Product rights and other definite-lived intangible assets are tested periodically for impairment when events or changes in circumstances indicate that an asset’s carrying value may not be recoverable. The impairment testing involves comparing the carrying amount of the asset to the forecasted undiscounted future cash flows. In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and an impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using discounted future cash flows. Assets which are not impaired may require an adjustment to the remaining useful lives for which to amortize the asset. Our projections of discounted cash flows use a discount rate determined by our management to be commensurate with the risk inherent in our business model. Our estimates of future cash flows attributable to our definite-lived intangible assets require significant judgment based on our historical and anticipated results and are subject to many factors. Different assumptions and judgments could materially affect the calculation of the fair value of the other definite-lived intangible assets which could trigger impairment.

Inventories

Inventories consist of raw materials. Inventory valuation reserves are established based on a number of factors/situations including, but not limited to, raw materials not meeting product specifications, product obsolescence, or application of the lower of cost (first-in, first-out method) or market (net realizable value) concepts. In the years ended December 31, 2015, 2014 and 2013, the Business recognized obsolescence charges for unsalable inventory, including finished goods, of $288 thousand, $1,176 thousand and $10,046 thousand, respectively.

Revenue Recognition

General

Revenue from product sales is recognized when title and risk of loss to the product transfers to the customer, which is based on the transaction shipping terms. Recognition of revenue also requires reasonable assurance of collection of sales proceeds, the seller’s price to the buyer to be fixed or determinable and the completion of all performance obligations. The Business warrants products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of all sales-related deductions including, but not limited to: chargebacks, trade discounts, billback adjustments, sales returns and allowances and government rebates, which are referred to in the aggregate as “SRA” allowances.

7

Provisions for SRAs

As is customary in the pharmaceutical industry, the Business’ gross product sales are subject to a variety of deductions in arriving at reported net product sales. When the Business recognizes gross revenue from the sale of products, an estimate of SRA is recorded, which reduces the gross product revenues. These provisions are estimated based on historical payment experience, historical relationship of the deductions to gross product revenues, government regulations, estimated utilization or redemption rates, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine the Business’ SRA provision has been applied on a consistent basis and no material revenue adjustments have been necessary to increase or decrease the Business’ reserves for SRA as a result of a significant change in underlying estimates. The Business uses a variety of methods to assess the adequacy of the SRA reserves to ensure that the Business’ financial statements are fairly stated.

Chargebacks — A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid by the Business’ wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at certain contract prices. These large wholesalers represent the vast majority of the recipients of the Business’ chargeback payments.

Rebates — Rebates include volume related incentives to direct and indirect customers, Medicaid rebates and other government rebates. Volume rebates are generally offered to customers as an incentive to use the Business’ products and to encourage greater product sales. These rebate programs include contracted rebates based on customers’ purchases made during an applicable monthly, quarterly or annual period. The provisions for government rebates are based, in part, upon historical experience of claims submitted by the various states / authorities, contractual terms and government regulations. We monitor legislative changes to determine what impact such legislation may have on the Business’ provision.

Cash Discounts — Cash discounts are provided to customers that pay within a specific period. The provision for cash discounts is estimated based upon invoice billings, utilizing historical customer payment experience. The Business’ experience of payment history is fairly consistent and most customer payments qualify for the cash discount.

Returns and Other Allowances — The Business’ provision for returns and other allowances include returns, pricing adjustments, promotional allowances and billback adjustments.

Consistent with industry practice, the Business maintains a returns policy that allows customers to return product for a credit. In accordance with the Business’ policy, credits for customer returns of products are applied against outstanding account activity or are settled in cash. Product exchanges are not permitted. Customer returns of product are generally not resalable. The Business’ estimate of the provision for returns is based upon historical experience, product expiration dates and current trends of actual customer returns.

Additionally, the Business considers other factors when estimating the current period returns provision, including levels of inventory in the distribution channel, as well as significant market changes which may impact future expected returns.

Pricing adjustments, which includes shelf stock adjustments, are credits issued to reflect price decreases in selling prices charged to the Business’ direct and indirect customers. Shelf stock adjustments are based upon the amount of product the Business’ customers have in their inventory at the time of an agreed-upon price reduction. The provision for shelf stock adjustments is based upon specific terms with the Business’ direct customers and includes estimates of existing customer inventory levels based upon their historical purchasing patterns.

Billback adjustments are credits that are issued to certain customers who purchase directly from the Business as well as indirectly through a wholesaler. These credits are issued in the event there is a difference between the customer’s direct and indirect contract price. The provision for billbacks is estimated based upon historical purchasing patterns of qualified customers who purchase product directly from us and supplement their purchases indirectly through the Business’ wholesale customers.

The following table summarizes the charges recognized for SRA provisions ($ in thousands):

8

	
																					
 	 	Chargebacks	 	Rebates	 	Return and Other Allowances	 	Cash Discounts	 	Total	
Year Ended December 31, 2013	 	$	28,072		 	$	6,680		 	$	8,610		 	$	1,819		 	$	45,181		
Year Ended December 31, 2014	 	$	19,798		 	$	4,133		 	$	2,877		 	$	1,087		 	$	27,895		
Year Ended December 31, 2015	 	$	112,073		 	$	41,422		 	$	22,496		 	$	5,783		 	$	181,774		

R&D Activities

R&D activities are expensed as incurred and consist of self-funded R&D costs, the costs associated with work performed under collaborative R&D agreements, regulatory fees, and license and milestone payments, if any. R&D expenses for the Business were materially incurred prior to the periods presented.

Recent Accounting Pronouncements

On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an effective date for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, for public business entities, certain not-for-profit entities,and certain employee benefit plans. The effective date for ASU 2014-09 was deferred by one year through the issuance of ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In March 2016, the FASB has issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606 Revenue from Contracts with Customers requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The effective date and transition of these amendments is the same as the effective date and transition requirements in Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In April 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients, which include assessing the specific collectability criterion and accounting for contracts that do not meet the criteria for Step 1 to determine whether a contract is valid and represents a genuine transaction; presentation of sales taxes and other similar taxes collected from customers; noncash consideration; contract modifications at transition; and completed contracts at transition. The amendments also clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption, however, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on our financial positions and results of operations.

NOTE 3 —Inventories, net

Inventories, net consist of raw materials.

Inventories, net consisted of the following ($ in thousands):

9

	
								
 	December 31, 2015	 	December 31, 2014	
Raw materials	$	3,644		 	$	3,285		
Inventories, net	$	3,644		 	$	3,285		

Inventories exclude finished goods of $14,577 thousand and $10,985 thousand as of December 31, 2015 and 2014, respectively, not included in the Business.

NOTE 4 —Intangible Assets

Intangible Assets

Intangible assets have been acquired through various business combinations and asset acquisitions. Intangible assets consisted of the following ($ in thousands):

	
								
Cost basis	December 31, 2015	 	December 31, 2014	
     Total definite-lived intangible assets	$	119,871		 	$	125,133		
Total intangibles	$	119,871		 	$	125,133		
 	 	 	 	
Accumulated amortization	December 31, 2015	 	December 31, 2014	
     Total intangibles	$	(59,911	)	 	$	(54,359	)	
Net intangibles	$	59,960		 	$	70,774		

The carrying value of intangible assets is re-evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Further, the appropriateness of useful lives assigned to long-lived assets, including product rights, is continually evaluated.

Amortization expense was $8,027 thousand, $647 thousand and $18,177 thousand for the years ended December 31, 2015, 2014 and 2013, respectively.

Assuming no additions, disposals or adjustments are made to the carrying value and/or useful lives of the intangible assets, annual amortization expense on intangible assets as of December 31, 2015 over each of the next five years is estimated to be as follows ($ in thousands):

	
				
 	Amortization Expense	
2016	$	10,143		
2017	$	10,143		
2018	$	10,143		
2019	$	10,143		
2020	$	10,143		

The above amortization expense is an estimate. Actual amounts may change for such estimated amounts due to additional intangible asset acquisitions, potential impairments, accelerated amortization or other events.

NOTE 5 —Subsequent Events

The Company has evaluated transactions that occurred as of the issuance of these financial statements, October 17, 2016, for purposes of disclosures of unrecognized subsequent events.

10

Exhibit 99.3

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

Unaudited Special Purpose Combined Financial Statements of Assets Acquired as of June 30, 2016 and December 31, 2015, and Unaudited Special Purpose Combined Statements of Revenue and Direct Expenses of the Six Months Ended June 30, 2016 and 2015.

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

INDEX to Unaudited Special Purpose Combined Financial Statements

	
		
Special Purpose Combined Statement of Net Assets Acquired as of June 30, 2016 and December 31, 2015	1	
Special Purpose Combined Statements of Revenues and Direct Expenses for the six months ended June 30, 2016 and June 30, 2015	2	
Notes to Special Purpose Combined Financial Statements	3	

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

SPECIAL PURPOSE COMBINED STATEMENTS OF ASSETS ACQUIRED
(U.S. dollars in thousands)
(Unaudited)

	
								
 	June 30, 2016	 	December 31, 2015	
Intangible assets, net – product rights	$	11,509		 	$	12,752		
Total assets acquired	$	11,509		 	$	12,752		

The accompanying notes are an integral part of these special purpose combined financial statements.

1

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

SPECIAL PURPOSE COMBINED STATEMENTS OF REVENUES AND DIRECT EXPENSES
(U.S. dollars in thousands)
(Unaudited)

	
								
 	Six Months Ended June 30,	
 	2016	 	2015	
Net product revenues	$	29,559		 	$	27,490		
   Cost of sales (excluding amortization of intangibles)	5,004		 	10,777		
   Amortization	1,243		 	2,508		
   Research and development expenses	330		 	718		
   Selling, general and administrative expenses	1,541		 	1,715		
   Total direct expenses	$	8,118		 	$	15,718		
Revenues net of direct expenses	$	21,441		 	$	11,772		

The accompanying notes are an integral part of these special purpose combined financial statements.

2

Certain Pharmaceutical Products of Teva Pharmaceutical Industries Limited

Notes to Unaudited Special Purpose Combined Financial Statements

NOTE 1 – Background

Teva Pharmaceutical Industries Limited (the “Parent Company”), headquartered in Israel, together with its subsidiaries and associated companies (the “Company,” “Teva” or the “Group”), is engaged in the development, manufacturing, marketing and distribution of generic, specialty, and other pharmaceutical products. The majority of the Group’s revenues are in the United States and Europe. The Group’s main manufacturing facilities are located in Israel, Hungary, United States, Germany, Canada, Japan, Ireland, the United Kingdom, the Czech Republic, Croatia, Italy and India.

Impax Laboratories, Inc. (“Impax”) entered into an Asset Purchase Agreement (the “Teva Purchase Agreement”) with an affiliate of Teva to purchase respective rights to certain pharmaceutical products (the “Products”) in connection with the divestitures of the Products related to the acquisition of certain businesses and assets by Teva pursuant to the Master Purchase Agreement dated as of July 26, 2015 by and between Allergan plc and Teva. Impax acquired from Teva certain existing assets and rights related to the development, manufacture, import, export, commercialization, distribution, marketing, use, storage, transport, promotion, disposition or sales of the Products.

NOTE 2 – Basis of presentation

The accompanying Special Purpose Combined Financial Statements (the “Financial Statements”) should be read in conjunction with the Certain Pharmaceutical Products of Teva Pharmaceuticals Industries Limited report dated October 7, 2016 for the year ended December 31, 2015. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted from the accompanying Financial Statements. The accompanying year end December 31, 2015 Special Purpose Combined Statement of Assets Acquired was derived from the audited Financial Statements dated October 7, 2016. The accompanying interim financial statements are unaudited. The interim financial data as of June 30, 2016 and for the six months ended June 30, 2016, and June 30, 2015 is unaudited. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and derived from Teva’s books and records and certain of its affiliates and only present the assets acquired and the Products’ revenues and direct expenses, including certain allocated expenses. It is impracticable to prepare complete financial statements related to the Products as Teva never accounted for them on a stand-alone basis, as a separate division or subsidiary. Teva never prepared full stand-alone or full carve-out financial statements for these Products and has never maintained the distinct and separate accounts necessary to prepare such financial statements.

These Financial Statements are based upon the Teva Purchase Agreements and relief from SEC Rule 3-05, Significant Acquisition Carve-out Financial Statement Reporting Requirements, obtained by Impax from the Securities and Exchange Commission. These Financial Statements are not intended to be a complete presentation of the financial position, results of operations or cash flows in conformity with accounting principles generally accepted in the United States of America. The operations of these Products rely, to varying degrees, on Teva and certain of its affiliates for marketing, sales order processing, billing, collection, procurement, customer service, warehousing, information technology, insurance, human resources, accounting, regulatory, treasury, and legal support, and these expenses have been allocated in these Financial Statements. These Financial Statements are not indicative of the financial condition or results of operations of the acquired Products on a stand alone basis, because of the reliance of these Products on Teva and certain of its affiliates.

A provision for income taxes has not been presented in the Financial Statements as these Products were never functioning as a stand-alone unit; accordingly, no allocation of income tax provision/benefit has been made to these Products.

During the six months ended June 30, 2016 and 2015, these Products did not have any stand-alone financing requirements, and any cash generated was swept to Teva. As the Products have historically been managed as part of the operations of Teva and certain of its affiliates and have not been operated as a stand-alone entity, it is not practical to prepare historical cash flow information regarding the Products’ operating, investing, and financing cash flows. As such, statements of cash flows were not prepared.

NOTE 3 – Certain expenses and allocations

3

Certain costs and expenses have been allocated by Teva on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method (primarily net product revenues). Management considers that such allocations have been made on a reasonable basis, but may not necessarily be indicative of the costs that would have been incurred if the Products had been operated on a stand-alone basis for the periods presented.

Cost of sales primarily includes allocations for labor and overhead incurred by Teva for these Products. Selling, general and administrative costs includes certain product-specific legal and product liability costs, and allocated expenses primarily related to cost of labor, costs of outside services and various other costs.

NOTE 4 – Significant accounting policies

Use of estimates

The preparation of these Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make certain estimates and assumptions that affect the amounts reported. The estimates and associated assumptions are based on historical experience, complex judgments and various other factors that are believed to be reasonable under the circumstances but are inherently uncertain. The estimation process required to prepare the Financial Statements, including but not limited to, allocations of costs and expenses from the Parent, accounting for deductions from revenue (e.g., rebates, sales discounts, allowances and incentives), determination of useful lives for intangible assets and the assessment of expected cash flow used in evaluating long-lived assets for impairment. Actual results may or may not differ from these estimates. Also, as discussed in note 3, these Financial Statements include allocations and estimates that are not necessarily indicative of the amounts that would have resulted if the Products had been operated on a stand-alone basis.

Intangible assets

Intangible assets are amortized using the straight-line method over their estimated period of useful life. Amortization of acquired developed products is recorded under cost of sales. Amortization periods for product rights are based on Teva’s assessment of various factors impacting estimated useful lives and cash flows. Such factors include the product’s position in its life cycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. Significant changes to any of these factors may result in a reduction in the intangible’s useful life and an acceleration of related amortization expense. Teva reviews its long-lived assets and performs detailed testing whenever potential impairment indicators are present. The impairment testing involves comparing the carrying amount of the asset to the forecasted undiscounted future cash flows. In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and the impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using discounted future cash flows.

Revenue recognition

The Company recognizes revenues from sales when persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable and collectability is reasonably assured. This generally occurs when products are shipped and title and risk and rewards for the products are transferred to the customer.

Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, returns, Medicaid, prompt pay discounts and other deductions, which can be reasonably estimated. When sales provisions are not considered reasonably estimable by Teva, the revenue is deferred to a future period when more information is available to evaluate the impact.
 
Calculations for these deductions from sales are based on historical experience and the specific terms in the individual agreements. Chargebacks and rebates are the largest components of sales reserves and allowances. Provisions for chargebacks are determined using historical chargeback experience and expected chargeback levels. Rebates are recognized based on contractual obligations in place at the time of sales with consideration given to relevant factors that may affect the payment as well as historical experience for estimated market activity.

The following table summarizes the charges recognized for Sales, Reserves and Allowances provisions ($ in
thousands):

4

	
																					
 	 	Chargebacks	 	Rebates	 	Return and Other Allowances	 	Cash Discounts	 	Total	
Six months ended June 20, 2015	 	$	74,373		 	$	13,538		 	$	2,911		 	$	2,415		 	$	93,237		
Six months ended June 20, 2016	 	$	30,336		 	$	8,018		 	$	2,160		 	$	1,430		 	$	41,944		

Research and development expenses

Research and development expenses are charged to income as incurred. Research and development in-process acquired as part of an asset purchase, which has not reached technological feasibility and has no alternative future use, is expensed as incurred.

Shipping and handling costs

Shipping and handling costs incurred which are not material to these Products, are expensed in the year incurred and are included in “selling, general and administrative costs” on these Financial Statements.

Advertising expenses

Advertising expenses are charged to income as incurred. Costs associated with advertising, which are not material to these Products, are expensed in the year incurred and are included in “selling, general and administrative costs” on these Financial Statements.

Recent accounting pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance on stock compensation. The guidance is intended to simplify several aspects of the accounting for share-based payments, including income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Parent Company has adopted the provisions of this update during 2016. The guidance did not have a material impact on the Company’s Financial Statements.

In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In March, April and May 2016, the FASB issued three additional updates regarding identifying performance obligations and licensing, certain principal versus agent considerations, and various narrow scope improvements based on practical questions raised by users. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017 (early adoption is permitted for the interim and annual periods beginning on or after December 15, 2016). The guidance permits the use of either a retrospective or cumulative effect transition method. The Parent Company is currently evaluating the impact of the guidance on its consolidated financial statements.

NOTE 5 – Intangible assets, net

As of June 30, 2016 and December 31, 2015, the gross and net amounts of intangible assets were:

	
								
 	June 30, 2016	 	December 31, 2015	
Product rights	$	48,627		 	$	48,627		
Accumulated amortization	37,118		 	35,875		
Intangible assets, net	$	11,509		 	$	12,752		
    
Amortization of intangible assets amounted to $1,243 thousand for the six months ended June 30, 2016, and $2,508 thousand for six months ended June 30, 2015.

5

Assuming no additions, disposals or adjustments are made to the carrying value and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles as of June 30, 2016 over the remainder of 2016 and each of the next five years is estimated to be as follows; remaining 2016—$1,243 thousand; 2017 to 2019—$2,492 thousand; and 2020—$2,063 thousand.

NOTE 6 – Subsequent events

The Company has evaluated transactions that occurred as of the issuance of these Financial Statements, October 7, 2016, for purposes of disclosures of unrecognized subsequent events.

6

Exhibit 99.4

Certain Pharmaceutical Products of Allergan plc

Unaudited Special Purpose Combined Statements of Net Assets Acquired as of June 30, 2016 and
December 31, 2015 and Special Purpose Combined Statements of Revenues and Direct Expenses for
the six months ended June 30, 2016 and June 30, 2015

Certain Pharmaceutical Products of Allergan plc

Index to Unaudited Special Purpose Combined Financial Statements

	
		
Special Purpose Combined Statement of Net Assets Acquired as of June 30, 2016 and December 31, 2015	3	
Special Purpose Combined Statements of Revenues and Direct Expenses for the six months ended June 30,
2016 and June 30, 2015	4	
Notes to the Special Purpose Combined Financial Statements	5	

2

Certain Pharmaceutical Products of Allergan plc

Special Purpose Combined Statements of Net Assets Acquired as of June 30, 2016 and December 31, 2015

(Unaudited; $ in thousands)

	
								
 	June 30, 2016	 	December 31, 2015	
Assets acquired:		 		
Inventories, net	$	3,541		 	$	3,644		
Intangible assets	50,407		 	59,960		
Total assets acquired	$	53,948		 	$	63,604		

The accompanying notes are an integral part of these special purpose combined financial statements.

3

Certain Pharmaceutical Products of Allergan plc

Special Purpose Combined Statements of Revenues and Direct Expenses for the six months ended June 30,
2016 and 2015

(Unaudited; $ in thousands)

	
									
 	 	Six Months Ended June 30,	
Net revenues	 	2016	 	2015	
Direct expenses:	 	$	58,867		 	$	40,649		
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)	 	11,591		 	9,444		
Research and development	 	—		 	2		
Selling and marketing	 	933		 	772		
General and administrative	 	4,336		 	1,644		
Amortization	 	5,071		 	2,956		
Total direct expenses	 	21,931		 	14,818		
Revenues less direct expenses	 	$	36,936		 	$	25,831		

The accompanying notes are an integral part of these special purpose combined financial statements.

4

NOTES TO THE UNAUDITED SPECIAL PURPOSE COMBINED FINANCIAL STATEMENTS

NOTE 1 —Basis of Presentation

Background

Allergan plc (“Allergan” or the “Company”) is a global specialty pharmaceutical company engaged in the development, manufacturing, marketing, and distribution of brand name pharmaceutical products (“brand”, “branded” or “specialty brand”), medical aesthetics, generic, branded generic, biosimilar and over-the-counter (“OTC”) pharmaceutical products. The Company has operations in more than 100 countries. The Generics Business (defined below) is focused on maintaining a leading position within both the North American, and in particular, the United States (“U.S.”), market and key international markets and strengthening its global position by offering a consistent and reliable supply of quality products.

On July 26, 2015 Allergan plc entered into a master purchase agreement (the “Teva Agreement”), under which on August 2, 2016, Teva Pharmaceutical Industries Ltd. (“Teva”) acquired Allergan plc’s global generic pharmaceuticals business and certain other assets (the “Teva Transaction”). Upon the closing of the Teva Transaction on August 2, 2016, Allergan plc received $33.4 billion in cash which includes estimated working capital and other contractual adjustments, and 100.3 million unregistered Teva ordinary shares (or American Depository Shares with respect thereto), which approximated $5.0 billion in value using the closing date Teva opening stock price discounted at a rate of 5.9 percent due to the lack of marketability. As part of the Teva Agreement, Teva acquired our global generics business, including the United States (“U.S.”) and international generic commercial units, our third-party supplier Medis, our global generic manufacturing operations, our global generic research and development (“R&D”) unit, our international OTC commercial unit (excluding OTC eye care products) and some established international brands.

On June 20, 2016, lmpax Laboratories, Inc. (“Impax”) entered into (i) an Asset Purchase Agreement (the “Teva Purchase Agreement”) with an affiliate of Teva (which was further amended on June 30, 2016) and (ii) an Asset Purchase Agreement (the “Allergan Purchase Agreement”, together with the Teva Purchase Agreement, the “Purchase Agreements”) with an affiliate of Allergan plc (“Allergan’’, together with Teva, the “Sellers”) to purchase the Sellers’ respective rights to certain pharmaceutical products (the “Products”) in connection with the Teva Transaction. Pursuant to the Purchase Agreements, Impax acquired from Teva (and in conjunction Allergan plc) certain existing assets and rights related to the development, manufacture, import, export, commercialization, distribution, marketing, use, storage, transport, promotion, disposition or sales of the Products (the “Impax Agreement”). The closings under the Purchase Agreements occurred on August 3, 2016.

Basis of Presentation

The accompanying Special Purpose Combined Financial Statements (the “Financial Statements”) are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These Financial Statements are based upon the Purchase Agreements and relief from SEC Rule 3-05, Significant Acquisition Carve-out Financial Statement Reporting Requirements , obtained by Impax from the Securities and Exchange Commission. These Financial Statements are not intended to be a complete presentation of financial position, results of operations, or cash flows of the Products in conformity with GAAP.

Due to the extent to which the Products have been integrated into Allergan during the periods required to be covered by the Financial Statements, the presentation of full or carve-out financial statements for the Products in accordance with the Securities and Exchange Commission’s Regulation S-X, including a reasonable and appropriate allocation of corporate overhead, interest and taxes, is impracticable. Thus, Statements of Net Assets Acquired and Statements of Revenues and Direct Expenses have been prepared.

The Financial Statements have been derived from the accounting records of Allergan using historical results of operations and financial position and only present the net assets acquired and the associated revenues and direct expenses, including certain allocated expenses, of the Products. The net assets acquired include the raw materials of pharmaceutical products and intangible assets specifically identified in the Impax Agreement.

The Financial Statements are not necessarily indicative of the results of operations that would have occurred if the Products had been an independent company.

Allocation of Costs & Expenses

These Financial Statements include revenues generated by the Products, less expenses directly attributable to the Products, and allocations of direct operating costs incurred by Allergan relating to the Products. Direct expenses attributable to the specific

5

products include such items as cost of goods sold, research and development, legal expense, and amortization. Selling and marketing and general and administrative expenses (with the exception of legal expenses) were attributed to the Products utilizing an allocation methodology based on a percentage of sales. The Financial Statements reflect a consistent application of methodology for each reporting period presented. Allocations of Allergan corporate overhead not directly related to the operations of the Products, as well as allocations of interest or income taxes, have been excluded from these Financial Statements.

NOTE 2 —Summary of Significant Accounting Policies

Use of Estimates

Management is required to make certain estimates and assumptions in order to prepare the Financial Statements in conformity with GAAP. Such estimates and assumptions affect the reported amounts of revenues and expenses and disclosure of assets in the consolidated financial statements and accompanying notes. The Products’ most significant estimates relate to the determination of SRAs (defined below), determination of useful lives for intangible assets, and the assessment of expected cash flows used in evaluating long-lived assets for impairment. The estimation process required to prepare the Products’ Financial Statements requires assumptions to be made about future events and conditions, and as such, is inherently subjective and uncertain. The Products’ actual results could differ materially from those estimates. The Financial Statements include estimates that are not necessarily indicative of the amounts that would have resulted if the Products had been operated as a stand-alone entity.

Product Rights and Other Definite-Lived Intangible Assets

Our product rights and other definite-lived intangible assets are stated at cost, less accumulated amortization, and are amortized using the economic benefit model or the straight-line method, over their estimated useful lives. We determine amortization periods for product rights and other definite-lived intangible assets based on our assessment of various factors impacting estimated useful lives and cash flows. Such factors include the product’s position in its life cycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. Significant changes to any of these factors may result in a reduction in the intangibles useful life and an acceleration of related amortization expense, which could cause our net results to decline.

Product rights and other definite-lived intangible assets are tested periodically for impairment when events or changes in circumstances indicate that an asset’s carrying value may not be recoverable. The impairment testing involves comparing the carrying amount of the asset to the forecasted undiscounted future cash flows. In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and an impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using discounted future cash flows. Assets which are not impaired may require an adjustment to the remaining useful lives for which to amortize the asset. Our projections of discounted cash flows use a discount rate determined by our management to be commensurate with the risk inherent in our business model. Our estimates of future cash flows attributable to our definite-lived intangible assets require significant judgment based on our historical and anticipated results and are subject to many factors. Different assumptions and judgments could materially affect the calculation of the fair value of the other definite-lived intangible assets which could trigger impairment.

Inventories

Inventories consist of raw materials. Inventory valuation reserves are established based on a number of factors/situations including, but not limited to, raw materials not meeting product specifications, product obsolescence, or application of the lower of cost (first-in, first-out method) or market (net realizable value) concepts.

Revenue Recognition

General

Revenue from product sales is recognized when title and risk of loss to the product transfers to the customer, which is based on the transaction shipping terms. Recognition of revenue also requires reasonable assurance of collection of sales proceeds, the seller’s price to the buyer to be fixed or determinable and the completion of all performance obligations. The Business warrants products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of all sales-related deductions including, but not limited to: chargebacks, trade discounts, billback adjustments, sales returns and allowances and government rebates, which are referred to in the aggregate as “SRA” allowances.

Provisions for SRAs

6

As is customary in the pharmaceutical industry, the Business’ gross product sales are subject to a variety of deductions in arriving at reported net product sales. When the Business recognizes gross revenue from the sale of products, an estimate of SRA is recorded, which reduces the gross product revenues. These provisions are estimated based on historical payment experience, historical relationship of the deductions to gross product revenues, government regulations, estimated utilization or redemption rates, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine the Business’ SRA provision has been applied on a consistent basis and no material revenue adjustments have been necessary to increase or decrease the Business’ reserves for SRA as a result of a significant change in underlying estimates. The Business uses a variety of methods to assess the adequacy of the SRA reserves to ensure that the Business’ financial statements are fairly stated.

Chargebacks — A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid by the Business’ wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at certain contract prices. These large wholesalers represent the vast majority of the recipients of the Business’ chargeback payments.

Rebates — Rebates include volume related incentives to direct and indirect customers, Medicaid rebates and other government rebates. Volume rebates are generally offered to customers as an incentive to use the Business’ products and to encourage greater product sales. These rebate programs include contracted rebates based on customers’ purchases made during an applicable monthly, quarterly or annual period. The provisions for government rebates are based, in part, upon historical experience of claims submitted by the various states / authorities, contractual terms and government regulations. We monitor legislative changes to determine what impact such legislation may have on the Business’ provision.

Cash Discounts — Cash discounts are provided to customers that pay within a specific period. The provision for cash discounts is estimated based upon invoice billings, utilizing historical customer payment experience. The Business’ experience of payment history is fairly consistent and most customer payments qualify for the cash discount.

Returns and Other Allowances — The Business’ provision for returns and other allowances include returns, pricing adjustments, promotional allowances and billback adjustments.

Consistent with industry practice, the Business maintains a returns policy that allows customers to return product for a credit. In accordance with the Business’ policy, credits for customer returns of products are applied against outstanding account activity or are settled in cash. Product exchanges are not permitted. Customer returns of product are generally not resalable. The Business’ estimate of the provision for returns is based upon historical experience, product expiration dates and current trends of actual customer returns.

Additionally, the Business considers other factors when estimating the current period returns provision, including levels of inventory in the distribution channel, as well as significant market changes which may impact future expected returns.

Pricing adjustments, which includes shelf stock adjustments, are credits issued to reflect price decreases in selling prices charged to the Business’ direct and indirect customers. Shelf stock adjustments are based upon the amount of product the Business’ customers have in their inventory at the time of an agreed-upon price reduction. The provision for shelf stock adjustments is based upon specific terms with the Business’ direct customers and includes estimates of existing customer inventory levels based upon their historical purchasing patterns.

Billback adjustments are credits that are issued to certain customers who purchase directly from the Business as well as indirectly through a wholesaler. These credits are issued in the event there is a difference between the customer’s direct and indirect contract price. The provision for billbacks is estimated based upon historical purchasing patterns of qualified customers who purchase product directly from us and supplement their purchases indirectly through the Business’ wholesale customers.

During the six months ended June 30, 2016 and 2015, the Company recorded $101,809 thousand and $65,308 thousand of SRA provisions, respectively.

R&D Activities

R&D activities are expensed as incurred and consist of self-funded R&D costs, the costs associated with work performed under collaborative R&D agreements, regulatory fees, and license and milestone payments, if any. R&D expenses for the Business were materially incurred prior to the periods presented.

7

Recent Accounting Pronouncements

On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an effective date for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, for public business entities, certain not-for-profit entities, and certain employee benefit plans. The effective date for ASU 2014-09 was deferred by one year through the issuance of ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that reporting period. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In March 2016, the FASB has issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606 Revenue from Contracts with Customers requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent). The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The effective date and transition of these amendments is the same as the effective date and transition requirements in Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In April 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on both historical and future financial positions and results of operations.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients, which include assessing the specific collectability criterion and accounting for contracts that do not meet the criteria for Step 1 to determine whether a contract is valid and represents a genuine transaction; presentation of sales taxes and other similar taxes collected from customers; non-cash consideration; contract modifications at transition; and completed contracts at transition. The amendments also clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption, however, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606. The Business is evaluating the impact, if any, the pronouncement will have on our financial positions and results of operations.

NOTE 3 —Inventories, net

Inventories, net consist of raw materials.

Inventories, net consisted of the following ($ in thousands):

	
								
 	June 30, 2016	 	December 31, 2015	
Raw materials	$	3,541		 	$	3,644		
Inventories, net	$	3,541		 	$	3,644		

Inventories exclude finished goods of $12,277 thousand and $14,577 thousand as of June 30, 2016 and December 31, 2015, respectively, not included in the Business.

NOTE 4 —Intangible Assets

Intangible Assets

8

Intangible assets have been acquired through various business combinations and asset acquisitions. Intangible assets consisted of the following ($ in thousands):

	
								
Cost basis	June 30, 2016	 	December 31, 2015	
     Total definite-lived intangible assets	$	109,968		 	$	119,871		
Total intangibles	$	109,968		 	$	119,871		
 	 	 	 	
Accumulated amortization	June 30, 2016	 	December 31, 2015	
     Total intangibles	$	(59,561	)	 	$	(59,911	)	
Net intangibles	$	50,407		 	$	59,960		

The carrying value of intangible assets is re-evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Further, the appropriateness of useful lives assigned to long-lived assets, including product rights, is continually evaluated.

Amortization expense for the six months ended June 30, 2016 and 2015 was $5,071 thousand and $2,956 thousand, respectively.

Assuming no additions, disposals or adjustments are made to the carrying value and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles as of June 30, 2016 over each of the next five years is estimated to be as follows ($ in thousands):

	
				
 	Amortization Expense	
2016	$	4,499		
2017	$	8,998		
2018	$	8,998		
2019	$	8,998		
2020	$	8,998		
2021	$	8,998		

NOTE 5 —Subsequent Events

The Company has evaluated transactions that occurred as of the issuance of these financial statements, October 17, 2016, for purposes of disclosures of unrecognized subsequent events.

9

Exhibit 99.5
IMPAX LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION

This unaudited pro forma combined financial information of Impax Laboratories, Inc. ("Impax" or the "Company") is presented to illustrate the estimated effects of the Teva Transaction and the $400.0 million of borrowing under the Term Loan Facility used to finance the Teva Transaction. See "Note 1. Description of Transactions" below for additional information on the Teva Transaction and Term Loan Facility.
    
The historical combined financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the transactions, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results. The unaudited pro forma combined financial statements should be read in conjunction with the accompanying Notes to the Unaudited Pro Forma Combined Financial Statements. In addition, the unaudited pro forma combined financial statements were based on and should be read in conjunction with:

•	the audited consolidated financial statements of Impax as of and for the year ended December 31, 2015 and the related notes, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015;	

•	the unaudited consolidated financial statements of Impax as of and for the six months ended June 30, 2016 and the related notes, included in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2016;	

•	the audited special purpose combined financial statements of Certain Pharmaceutical Products of each of Teva Pharmaceuticals Industries Limited ("Teva") and Allergan plc ("Allergan"), comprised in each case of the special purpose combined statements of assets acquired as of December 31, 2015 and December 31, 2014 and the related special purpose combined statements of revenue and direct expenses for each of the three years in the period ended December 31, 2015, and the related notes, for the Acquired Product Lines (as defined in "Note 1. Description of Transactions" below), filed herein as Exhibits 99.1 and 99.2, respectively, to the Company's Amendment No. 1 to its Current Report on Form 8-K filed on August 3, 2016 (the "Form 8-K/A"); and	

•	the unaudited special purpose combined interim financial statements of Certain Pharmaceutical Products of each of Teva and Allergan, comprised in each case of the special purpose combined statements of assets acquired as of June 30, 2016 and the related special purpose combined statements of revenues and direct expenses for the six month periods ended June 30, 2016 and June 30, 2015, and the related notes, for the Acquired Product Lines, filed herein as Exhibits 99.3 and 99.4, respectively, to the Company's Current Report on Form 8-K/A.	

The unaudited pro forma combined financial statements have been presented for informational purposes only. The pro forma information is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the transactions been completed as of the date indicated. In addition, the unaudited pro forma combined statements of operations do not purport to project the future financial position or operating results of the combined company.

The unaudited pro forma combined balance sheet and statements of operations have been prepared using the acquisition method of accounting under United States generally accepted accounting principles (“U.S. GAAP”). The accounting for the acquisition of the Acquired Product Lines (as defined in "Note 1. Description of Transactions" below) is based upon certain valuations that are preliminary and are subject to change. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing these unaudited pro forma combined balance sheet and statements of operations. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could be material. These differences, if any, could have a material impact on the accompanying unaudited pro forma combined statements of operations and the Company’s future results of operations and financial position.

In addition, the unaudited pro forma combined statements of operations do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the acquisition of the Acquired Product Lines, the costs to integrate the operations of Impax with the Acquired Product Lines, or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements.

IMPAX LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED
BALANCE SHEET
As of June 30, 2016
(Amounts in thousands)

	
																												
 	Impax Laboratories, Inc. As Reported	 	Acquired Product Lines from Teva Historical (Note 4)	 	Acquired Product Lines from Allergan Historical (Note 4)	 	Financing Transaction (Note 7)	 	 	 	Acquisition and Related Pro Forma Adjustments (Note 8)	 	 	 	Pro Forma Combined	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	366,846		 	$	—		 	$	—		 	$	388,975		 	(7a)	 	$	(587,419	)	 	(8a)	 	$	168,402		
Accounts receivable, net	237,454		 	—		 	—		 	—		 		 	—		 		 	237,454		
Inventory, net	148,079		 	—		 	3,541		 	—		 		 	—		 		 	151,620		
Prepaid expenses and other current assets	24,339		 	—		 	—		 	—		 		 	—		 		 	24,339		
Total current assets	776,718		 	—		 	3,541		 	388,975		 		 	(587,419	)	 		 	581,815		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	223,475		 	—		 	—		 	—		 		 	—		 		 	223,475		
Intangible assets, net	581,791		 	11,509		 	50,407		 	—		 		 	550,443		 	(8b)	 	1,194,150		
Goodwill	208,382		 	—		 	—		 	—		 		 	—		 		 	208,382		
Deferred income taxes	597		 	—		 	—		 	—		 		 	—		 		 	597		
Other non-current assets	58,973		 	—		 	—		 	—		 		 	—		 		 	58,973		
     Total assets	$	1,849,936		 	$	11,509		 	$	53,948		 	$	388,975		 		 	$	(36,976	)	 		 	$	2,267,392		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	$	50,518		 	$	—		 	$	—		 	$	—		 		 	$	—		 		 	$	50,518		
Accrued expenses	201,810		 	—		 	—		 	—		 		 	—		 		 	201,810		
Accrued profit sharing and royalty expenses	13,620		 	—		 	—		 	—		 		 	—		 		 	13,620		
Current portion of long-term debt, net	—		 	—		 	—		 	17,552		 	(7b)	 	—		 		 	17,552		
Total current liabilities	265,948		 	—		 	—		 	17,552		 		 	—		 		 	283,500		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt, net	435,265		 	—		 	—		 	371,423		 	(7b)	 	—		 		 	806,688		
Deferred income taxes	38,172		 	—		 	—		 	—		 		 	—		 		 	38,172		
Acquisition-related contingent consideration	—		 	—		 	—		 	—		 		 	30,100		 	(8c)	 	30,100		
Other non-current liabilities	37,161		 	—		 	—		 	—		 		 	—		 		 	37,161		
Total liabilities	776,546		 	—		 	—		 	388,975		 		 	30,100		 		 	1,195,621		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock	—		 	—		 	—		 	—		 		 	—		 		 	—		
Common stock	741		 	—		 	—		 	—		 		 	—		 		 	741		
Treasury stock	(2,157	)	 	—		 	—		 	—		 		 	—		 		 	(2,157	)	
Additional paid-in capital	525,182		 	—		 	—		 	—		 		 	—		 		 	525,182		
Retained earnings	557,114		 	—		 	—		 	—		 		 	(1,619	)	 	(8d)	 	555,495		
Accumulated other comprehensive loss	(7,490	)	 	—		 	—		 	—		 		 	—		 		 	(7,490	)	
    Total stockholders’ equity	1,073,390		 	—		 	—		 	—		 		 	(1,619	)	 		 	1,071,771		
     Total liabilities and stockholders’ equity	$	1,849,936		 	$	—		 	$	—		 	$	388,975		 		 	$	28,481		 		 	$	2,267,392		

The accompanying notes are an integral part of these unaudited pro forma financial statements.

IMPAX LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
For the six months ended June 30, 2016
(Amounts in thousands, except share and per share data)

	
																												
 	Impax Laboratories, Inc. As Reported	 	Acquired Product Lines from Teva Reclassified Historical (Note 4)	 	Acquired Product Lines from Allergan Reclassified Historical (Note 4)	 	Financing Transaction (Note 7)	 	 	 	Acquisition and Related Pro Forma Adjustments (Note 8)	 	 	 	Pro Forma Combined	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Impax Generics, net	$	291,774		 	$	29,559		 	$	58,867		 	$	—		 		 	$	—		 		 	$	380,200		
  Impax Specialty Pharma, net	106,324		 	—		 	—		 	—		 		 	—		 		 	106,324		
Total revenues	398,098		 	29,559		 	58,867		 	—		 		 	—		 		 	486,524		
Cost of revenues	222,524		 	6,247		 	16,662		 	—		 		 	15,928		 	(8e)	 	261,361		
         Gross profit	175,574		 	23,312		 	42,205		 	—		 		 	(15,928	)	 		 	225,163		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	89,206		 	1,541		 	5,269		 	—		 		 	(1,187	)	 	(8f)	 	94,829		
Research and development	40,768		 	330		 	—		 	—		 		 	—		 		 	41,098		
Patent litigation	3,248		 	—		 	—		 	—		 		 	—		 		 	3,248		
Total operating expenses	133,222		 	1,871		 	5,269		 	—		 		 	(1,187	)	 		 	139,175		
Income from operations	42,352		 	21,441		 	36,936		 	—		 		 	(14,741	)	 		 	85,988		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	(16,785	)	 	—		 	—		 	(7,555	)	 	(7c)	 	—		 		 	(24,340	)	
Interest income	673		 	—		 	—		 	—		 		 	—		 		 	673		
Reserve for Turing receivable	(48,043	)	 	—		 	—		 	—		 		 	—		 		 	(48,043	)	
Other, net	359		 	—		 	—		 	—		 		 	—		 		 	359		
Income (loss) before income taxes	(21,444	)	 	21,441		 	36,936		 	(7,555	)	 		 	(14,741	)	 		 	14,637		
Provision for (benefit from) income taxes	(8,335	)	 	—		 	—		 	—		 		 	13,097		 	(8g)	 	4,762		
         Net income (loss)	$	(13,109	)	 	$	21,441		 	$	36,936		 	$	(7,555	)	 		 	$	(27,838	)	 		 	$	9,875		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	$	(0.18	)	 	 	 	 	 	 	 	 	 	 	 	 	 	$	0.14		
Diluted	$	(0.18	)	 	 	 	 	 	 	 	 	 	 	 	 	 	$	0.14		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	70,882,759		 	 	 	 	 	 	 	 	 	 	 	 	 	70,882,759		
Diluted	70,882,759		 	 	 	 	 	 	 	 	 	 	 	 	 	71,827,101		

 The accompanying notes are an integral part of these unaudited pro forma financial statements.

IMPAX LABORATORIES, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENT OF OPERATIONS
For the year ended December 31, 2015
(Amounts in thousands, except share and per share data)

	
																												
 	Impax Laboratories, Inc. As Reported	 	Acquired Product Lines from Teva Reclassified Historical (Note 4)	 	Acquired Product Lines from Allergan Reclassified Historical (Note 4)	 	Financing Transaction (Note 7)	 	 	 	Acquisition and Related Pro Forma Adjustments (Note 8)	 	 	 	Pro Forma Combined	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
  Impax Generics, net	$	710,932		 	$	57,124		 	$	108,005		 	$	—		 		 	$	—		 		 	$	876,061		
  Impax Specialty Pharma, net	149,537		 	—		 	—		 	—		 		 	—		 		 	149,537		
Total revenues	860,469		 	57,124		 	108,005		 	—		 		 	—		 		 	1,025,598		
Cost of revenues	508,065		 	24,367		 	31,856		 	—		 		 	26,341		 	(8e)	 	590,629		
         Gross profit	352,404		 	32,757		 	76,149		 	—		 		 	(26,341	)	 		 	434,969		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	201,287		 	3,538		 	9,708		 	—		 		 	(633	)	 	(8f)	 	213,900		
Research and development	76,982		 	1,613		 	24		 	—		 		 	—		 		 	78,619		
Patent litigation	4,567		 	—		 	—		 	—		 		 	—		 		 	4,567		
Total operating expenses	282,836		 	5,151		 	9,732		 	—		 		 	(633	)	 		 	297,086		
Income from operations	69,568		 	27,606		 	66,417		 	—		 		 	(25,708	)	 		 	137,883		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	(27,268	)	 	—		 	—		 	(15,707	)	 	(7c)	 	—		 		 	(42,975	)	
Interest income	1,042		 	—		 	—		 	—		 		 	—		 		 	1,042		
Gain on sale of asset	45,574		 	—		 	—		 	—		 		 	—		 		 	45,574		
Loss on debt extinguishment	(16,903	)	 	—		 	—		 	—		 		 	—		 		 	(16,903	)	
Net change in fair value of derivatives	(13,000	)	 	—		 	—		 	—		 		 	—		 		 	(13,000	)	
Other, net	355		 	—		 	—		 	—		 		 	—		 		 	355		
Income before income taxes	59,368		 	27,606		 	66,417		 	(15,707	)	 		 	(25,708	)	 		 	111,976		
Provision for income taxes	20,371		 	—		 	—		 	—		 		 	19,097		 	(8g)	 	39,468		
         Net income	$	38,997		 	$	27,606		 	$	66,417		 	$	(15,707	)	 		 	$	(44,805	)	 		 	$	72,508		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	$	0.56		 	 	 	 	 	 	 	 	 	 	 	 	 	$	1.04		
Diluted	$	0.54		 	 	 	 	 	 	 	 	 	 	 	 	 	$	1.01		
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	69,640,417		 	 	 	 	 	 	 	 	 	 	 	 	 	69,640,417		
Diluted	72,027,344		 	 	 	 	 	 	 	 	 	 	 	 	 	72,027,344		

 The accompanying notes are an integral part of these unaudited pro forma financial statements.

IMPAX LABORATORIES, INC.
NOTES TO THE UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS

1. DESCRIPTION OF TRANSACTIONS
On August 3, 2016, Impax Laboratories, Inc. ("Impax" or the “Company”) completed (A) its acquisition of certain assets related to (i) 15 currently marketed generic pharmaceutical products, (ii) one approved generic product and two tentatively approved strengths of a currently marketed product, which have not yet launched, (iii) one pipeline generic product and one pipeline strength of a currently marketed product, which are pending approval by the U.S. Food and Drug Administration (the “FDA”), and (iv) one generic product under development, and (B) the return to the Company of its full commercial rights to its pending Abbreviated New Drug Application ("ANDA") for the generic equivalent to Concerta® (methylphenidate hydrochloride), a product the Company previously partnered with Teva Pharmaceuticals USA, Inc. (“Teva USA”) (collectively, the products and pipeline products and the assets related thereto in (A) and (B), the “Acquired Product Lines” and the transactions related thereto the "Teva Transaction"), pursuant to (x) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with Teva Pharmaceutical Industries Ltd. (“Teva”), acting directly or through its affiliates (the “Teva APA”), (y) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with affiliates of Allergan plc (“Allergan”), including Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc. and Watson Laboratories, Inc. (the “Allergan APA” and collectively with the Teva APA, the "APAs"), and (z) a Termination Agreement, dated as of June 20, 2016, between the Company and Teva USA, terminating each party’s rights and obligations with respect to methylphenidate hydrochloride under the Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva USA (the "Termination Agreement"). The aggregate purchase price for the Acquired Product Lines pursuant to the terms of the Teva APA and the Allergan APA, including the upfront payment to Teva in accordance with the Termination Agreement, was $585.8 million in cash at closing. The Company is also obligated to make future payments to Teva of up to $40.0 million under the terms of the Termination Agreement, payable upon the achievement of specified commercialization events related to methylphenidate hydrochloride. The Teva Transaction was part of the divestiture process mandated by the Federal Trade Commission in connection with the acquisition by Teva of the U.S. generics business of Allergan.

On August 3, 2016, in connection with the Teva Transaction, the Company also entered into a restatement agreement among the Company, Royal Bank of Canada ("RBC"), as administrative agent, and the lenders and guarantors party thereto (the "Restatement Agreement"). The Restatement Agreement amends and restates the Company’s Revolving Credit Facility Agreement, dated as of August 4, 2015, among the Company, as borrower, RBC, as administrative agent and collateral agent, the lenders party thereto, and the other agents and parties thereto (as amended and restated, the “Amended and Restated Credit Agreement”) to, among other things, (i) add a term loan feature to allow for the borrowing of up to $400.0 million of term loans (the “Term Loan Facility”) by the Company in accordance with the terms of the Amended and Restated Credit Agreement (ii) increase the aggregate principal amount of the revolving loans permitted under the Amended and Restated Credit Agreement (the “Revolving Credit Facility,” and, together with the Term Loan Facility, the “RBC Credit Facilities”) from $100.0 million to $200.0 million, and (iii) extend the maturity date of the Revolving Credit Facility from August 4, 2020 to August 3, 2021. Proceeds of $400.0 million from the Term Loan Facility were used to finance the Teva Transaction. The full amount of the $200.0 million Revolving Credit Facility remains available to the Company for working capital and other general corporate purposes.

2. BASIS OF PRESENTATION
The unaudited pro forma combined balance sheet and statements of operations were prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations , with Impax being the legal and accounting acquirer, and uses the fair value concepts defined in ASC Topic 820, Fair Value Measurement , and was based on the historical financial statements of Impax and the Acquired Product Lines. Under the acquisition method of accounting, the assets acquired are recorded as of the completion of the acquisition, at their respective estimated fair values, and added to those of Impax. The consolidated financial statements and reported results of operations of Impax issued after completion of the acquisition will reflect these values, but will not be retroactively restated to reflect the historical financial position or results of operations of the Acquired Product Lines.

Under ASC 805, acquisition-related transaction costs (i.e., advisory, legal, valuation, other professional fees) and certain acquisition-related restructuring charges are not included as a component of consideration transferred but are accounted for as expenses in the periods in which the costs are incurred.

In addition, the unaudited pro forma combined statements of operations do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the purchase of the Acquired Product Lines, the

costs to integrate the operations of Impax with the Acquired Product Lines, or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements.

3. ACCOUNTING POLICIES
The Company is in the process of performing a detailed review of the Acquired Product Lines accounting policies and to date, no material difference has been identified. The Company will complete this review in the post-combination period, and as a result of the review, Impax may identify additional differences between the accounting policies of the Acquired Product Lines that, when conformed, could have a material impact on the combined financial statements.
4. ACQUIRED PRODUCTS FROM TEVA AND ALLERGAN HISTORICAL FINANCIAL INFORMATION
Financial information of Certain Pharmaceutical Products of Teva and Allergan in the “Acquired Product Lines from Teva Historical” and “Acquired Product Lines from Allergan Historical” columns in the unaudited pro forma combined statements of operations represents the revenues and direct expenses of the Acquired Product Lines. This information does not include certain indirect expenses or income taxes. Such financial information has been reclassified to conform to the historical presentation in Impax’s statements of operations as set forth below.  

Teva's reclassifications for the six months ended June 30, 2016: 

	
														
(in thousands)	Before Reclassification	 	Reclassification	 	 	 	After Reclassification	
Cost of revenues	$	5,004		 	$	1,243		 	(a)	 	$	6,247		
Amortization	1,243		 	(1,243	)	 	(a)	 	—		

(a) Represents the reclassification of $1.2 million reported in amortization on Teva’s statement of revenue and direct expenses into cost of revenues to conform to Impax’s statement of operations presentation.

Allergan’s reclassifications for the six months ended June 30, 2016:

	
														
(in thousands)	Before Reclassification	 	Reclassification	 	 	 	After Reclassification	
Cost of revenues	$	11,591		 	$	5,071		 	(b)	 	$	16,662		
Amortization	5,071		 	(5,071	)	 	(b)	 	—		
Selling, general and administrative	—		 	5,269		 	(c), (d)	 	5,269		
Selling and marketing	933		 	(933	)	 	(c)	 	—		
General and administrative	4,336		 	(4,336	)	 	(d)	 	—		

(b) Represents the reclassification of $5.1 million reported in amortization on Allergan’s statement of revenue and direct expenses into cost of revenues to conform to Impax’s statement of operations presentation.

(c) Represents the reclassification of $0.9 million reported in selling and marketing on Allergan’s statement of revenue and direct expenses into selling, general and administrative to conform to Impax’s statement of operations presentation.

(d) Represents the reclassification of $4.3 million reported in general and administrative on Allergan’s statement of revenue and direct expenses into selling, general and administrative to conform to Impax’s statement of operations presentation.

Teva’s reclassifications for the year ended December 31, 2015: 

	
														
(in thousands)	Before Reclassification	 	Reclassification	 	 	 	After Reclassification	
Cost of revenues	$	19,351		 	$	5,016		 	(e)	 	$	24,367		
Amortization	5,016		 	(5,016	)	 	(e)	 	—		

(e) Represents the reclassification of $5.0 million reported in amortization on Teva’s statement of revenue and direct expenses into cost of revenues to conform to Impax’s statement of operations presentation.

Allergan’s reclassifications for the year ended December 31, 2015:

	
														
(in thousands)	Before Reclassification	 	Reclassification	 	 	 	After Reclassification	
Cost of revenues	$	23,829		 	$	8,027		 	(f)	 	$	31,856		
Amortization	8,027		 	(8,027	)	 	(f)	 	—		
Selling, general and administrative	—		 	9,708		 	(g), (h)	 	9,708		
Selling and marketing	2,190		 	(2,190	)	 	(g)	 	—		
General and administrative	7,518		 	(7,518	)	 	(h)	 	—		

(f) Represents the reclassification of $8.0 million reported in amortization on Allergan’s statement of revenue and direct expenses into cost of revenues to conform to Impax’s statement of operations presentation.

(g) Represents the reclassification of $2.2 million reported in selling and marketing on Allergan’s statement of revenue and direct expenses into selling, general and administrative to conform to Impax’s statement of operations presentation.

(h) Represents the reclassification of $7.5 million reported in general and administrative on Allergan’s statement of revenue and direct expenses into selling, general and administrative to conform to Impax’s statement of operations presentation.

5. FAIR VALUE OF CONSIDERATION TRANSFERRED IN CONNECTION WITH THE ACQUISITION

The following is a preliminary estimate of the purchase price for the Teva Transaction:

	
				
(in thousands)	Estimated Fair Value	
Purchase price per the APAs	$	575,800		
Upfront payment pursuant to Termination Agreement	10,000		
     Total cash consideration	585,800		
Fair value of contingent consideration pursuant to Termination Agreement (1)	30,100		
     Total consideration transferred	$	615,900		

(1) The contingent consideration arrangement pursuant to the Termination Agreement potentially requires the Company to pay up to $40.0 million of additional consideration to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride. The $30.1 million fair value of the potential contingent consideration payments recognized on the acquisition date was estimated by applying a probability-weighted expected return methodology.

6. ASSETS ACQUIRED IN CONNECTION WITH THE ACQUISITION

The following is a preliminary estimate of the assets acquired by Impax in connection with the Teva Transaction on the closing date of August 3, 2016:

	
				
(in thousands)	August 3, 2016	
Intangible assets (a)	$	613,032		
Inventory - raw materials	2,868		
Total assets acquired	$	615,900		

(a) The fair value of the identifiable intangible assets and their weighted-average estimated useful lives are as follows:

	
						
(in thousands)	Estimated Fair Value	 	Weighted-Average Estimated Useful Life	
Marketed product rights	$	461,152		 	19 years	
Acquired IPR&D product rights (1)	151,880		 	N/A	
Total intangible assets	$	613,032		 		

(1) Pursuant to the Termination Agreement, Teva returned to the Company its full commercial rights to its pending ANDA for the generic equivalent to Concerta (R) (methylphenidate hydrochloride), a product the Company previously partnered with Teva USA under a Strategic Alliance Agreement dated June 27, 2001. As a result, the Company recognized an intangible asset of $78.1 million related to the reacquired in-process research and development product right. The Company engaged a third-party valuation specialist to measure the value of the reacquired product right using a discounted cash flow analysis. The asset was determined to be indefinite-lived based on the market participant methodology prescribed in ASC 805, Business Combinations .

7. PRO FORMA ADJUSTMENTS IN CONNECTION WITH THE FINANCING

The following summarizes the pro forma adjustments in connection with the financing pursuant to the RBC Credit Facilities to give effect to the Teva Transaction as if it had occurred on January 1, 2015 for purposes of the pro forma combined statements of operations and as of June 30, 2016 for purposes of the pro forma combined balance sheet:

(a) Pro forma increase to cash and cash equivalents of $389.0 million represents the proceeds, net of deferred financing fees, from the $400.0 million Term Loan Facility borrowing used to fund a portion of the Teva Transaction.

(b) Pro forma adjustment represents the $400.0 million Term Loan Facility borrowing used to fund a portion of the acquisition. Total deferred financing fees of $11.0 million were incurred in connection with the Term Loan Facility borrowing. The following is a reconciliation of the outstanding long-term debt amounts shown in the unaudited pro forma combined balance sheet as of June 30, 2016:

	
				
(in thousands)	As of June 30, 2016	
Term Loan Facility	$	400,000		
Less: deferred financing fees	11,025		
     Net debt	388,975		
Less: current portion	17,552		
     Long-term debt, net	$	371,423		

(c) Represents the pro forma increase in interest expense for the six months ended June 30, 2016 and the year ended December 31, 2015. The interest on the Term Loan Facility is calculated using a variable rate. The interest expense for the six months ended June 30, 2016 and the year ended December 31, 2015 is based on the current base rate of 3.34%. A 1/8% increase (decrease) in the annual interest rate would cause income before income taxes to increase by $239,000 and decrease by $496,000 for the six months ended June 30, 2016 and the year ended December 31, 2015, respectively. The amortization of the deferred financing fees is calculated over the five year life of the Term Loan Facility using the effective interest method. The total net pro forma increase in interest expense includes:

	
								
(in thousands)	Six Months Ended
June 30, 2016	 	Year Ended
December 31, 2015	
Estimated cash interest expense on Term Loan Facility	$	6,377		 	$	13,258		
Estimated non-cash interest expense for deferred financing fees	1,178		 	2,449		
Total interest expense	$	7,555		 	$	15,707		

8. PRO FORMA ADJUSTMENTS IN CONNECTION WITH THE ACQUISITION

The following summarizes the pro forma adjustments in connection with the Teva Transaction to give effect to the transaction as if it had occurred on January 1, 2015 for purposes of the pro forma combined statements of operations and as of June 30, 2016 for purposes of the pro forma combined balance sheet.

(a) Pro forma decrease to cash and cash equivalents represents the effects of the following:

	
				
(in thousands)	June 30, 2016	
Total cash purchase price	$	585,800		
Estimated additional transaction costs to be incurred	1,619		
Net pro forma decrease	$	587,419		

(b) The fair value of the intangible assets acquired and the reversal of the historical intangible assets are reflected in the
following pro forma adjustment:

	
						
(in thousands)	June 30, 2016	 	Weighted-Average Remaining Useful Life	
Currently marketed products	$	460,479		 	19 years	
Acquired IPR&D product rights	151,880		 	N/A	
Elimination of historical intangible asset value	(61,916	)	 	N/A	
Net pro forma adjustment	$	550,443		 		

(c) Represents the fair value on the Teva Transaction closing date of the potential contingent consideration payments due by the Company to Teva related to methylphenidate hydrochloride pursuant to the Termination Agreement. The $30.1 million fair value was estimated by applying a probability-weighted expected return methodology.

(d) Represents $1.6 million estimated additional direct transaction costs expected to be incurred in connection with the Teva Transaction.

(e) Represents the net pro forma increase in cost of revenues for the six months ended June 30, 2016 and the year ended December 31, 2015 related to the amortization expense for acquired finite-lived intangible assets (to be recognized over the weighted-average remaining useful life of 19 years based on the pattern of economic benefit expected to be realized):

	
								
(in thousands)	Six Months Ended
June 30, 2016	 	Year Ended
December 31, 2015	
Record amortization expense for acquired finite-lived intangible assets	$	22,242		 	$	39,384		
Eliminate historical amortization expense related to finite-lived intangible assets	(6,314	)	 	(13,043	)	
Net pro forma adjustment	$	15,928		 	$	26,341		

(f) Represents the pro forma adjustments to selling, general, and administrative expense of $0.6 million and $1.2 million for transaction costs that were recorded on Impax’s historical statement of operations for the year ended December 31, 2015 and the six months ended June 30, 2016, respectively, but are not expected to have a continuing impact on the combined company’s results.

(g) Since the abbreviated special purpose combined financial statements of Certain Pharmaceutical Products of Teva and Allergan did not include income taxes, for purposes of these unaudited pro forma statements of operations, Impax used

an estimated tax rate of 36.3% for calculating the tax effect on income (loss) before income taxes of both Teva and Allergan as well as the pro forma adjustments, which include the related financing transaction. For purposes of these unaudited pro forma combined statement of operations for the six months ended June 30, 2016 and the year ended December 31, 2015, the estimated income tax rate is based on the applicable enacted statutory tax rates for the period. These rates are estimates and do not take into account future income tax strategies that may be applied to the combined entity.

9. EARNINGS PER SHARE
The unaudited pro forma combined basic and diluted earnings per share for the year ended December 31, 2015 are based on the basic and diluted weighted-average number of common shares outstanding. The weighted-average common shares outstanding were not impacted by the Teva Transaction or the related financing and are therefore consistent with the Company’s basic and diluted shares outstanding for the year ended December 31, 2015.
The unaudited pro forma combined basic and diluted earnings per share for the six months ended June 30, 2016 are based on the basic and diluted weighted-average number of common shares outstanding. The weighted-average common shares outstanding were not impacted by the Teva Transaction or the related financing. The pro forma combined company’s unaudited results reported net income for the six months ended June 30, 2016, therefore the unaudited pro forma basic and diluted earnings per share are calculated as follows:

				
 	Six Months Ended
June 30, 2016	
(in thousands, except per share amounts)	 	
Pro Forma Basic Earnings Per Common Share	 	
Pro forma net income	$	9,875		
Pro forma weighted-average common shares outstanding	70,883		
     Pro forma basic earnings per share	$	0.14		
 	 	
Pro Forma Diluted Earnings Per Common Share (i)	 	
Pro forma net income	$	9,875		
Pro forma weighted-average common shares outstanding	70,883		
Weighted-average incremental shares related to assumed exercise of warrants and stock-options, vesting of non-vested shares and ESPP share issuance	944		
Pro forma diluted weighted-average common shares outstanding	71,827		
     Pro forma diluted earnings per share	$	0.14		

(i) The adjustments related to the Company’s outstanding 2% Convertible Senior Notes due June 2022 were excluded from the computation because the effects were determined to be anti-dilutive.