In the normal course of business, the Company may enter into select licensing and collaborative agreements for the commercialization and/or development of unique products. These products are sometimes investigational treatments in early stage development that target unique conditions. The ultimate outcome, including whether the product will be: (i) fully developed, (ii) approved by regulatory agencies, (iii) covered by third-party payors or (iv) profitable for distribution, is highly uncertain. The commitment periods under these agreements vary and include customary termination provisions. Expenses arising from commitments, if any, to fund the development and testing of these products and their promotion are recognized as incurred. Royalties due are recognized when earned and milestone payments are accrued when each milestone has been achieved and payment is probable and can be reasonably estimated.

During December 2025, the Company completed the acquisition of Wuhan Shibo Zhenmei Technology Co., Ltd. (“Shibo Zhenmei”), consisting of the aesthetics distribution business of its full‑service distributor in China, the Shibo Group (the “Shibo Zhenmei Acquisition”). Through this transaction, the Company assumed full responsibility for the distribution of Solta Medical’s entire product portfolio, including Thermage® FLX as well as other aesthetic devices, within the Chinese market.

The acquisition includes potential future payments to the sellers contingent upon the achievement of specified post‑acquisition performance conditions and the continued employment of designated key personnel. These contingent payments may total up to approximately $17 million in the aggregate. Performance‑based milestone payments are linked to the acquired business’s future net sales levels over defined periods, with amounts payable on either an all‑or‑partial achievement basis. Retention‑based payments are tied to the continued employment of certain key employees through agreed‑upon dates and are recognized as compensation expense over the applicable service period. The fair value of the contingent consideration associated with the performance-based milestone which was recognized as of the acquisition date was $3 million, which was recorded as a non-current liability. This valuation was determined using Level 3 inputs, including probability‑weighted assessments of expected outcomes and a risk‑adjusted discount rate (see Note 6, “FAIR VALUE MEASUREMENTS”).

The assets acquired and liabilities assumed are included within the Solta Medical segment. Goodwill associated with this acquisition is not deductible for income tax purposes. In connection with the acquisition of Shibo Zhenmei, the Company reacquired inventory that it had previously sold to Shibo Zhenmei and has subsequently sold such inventory.

The fair value of the identifiable intangible assets is determined primarily using the “income approach,” which requires a forecast of the expected future cash flows (including revenue growth rates, cost of goods sold, operating expenses and discount rates). Customer relationships and other intangible assets related to the Shibo Zhenmei Acquisition have an estimated useful life of 15 months.

The valuation of the assets acquired and liabilities assumed as part of this acquisition, has not been finalized as of June 30, 2026. The areas that could be subject to change primarily relate to the valuation of certain identifiable assets. The Company will finalize these amounts no later than one year from the acquisition date.

In September 2025, the Company acquired DURECT Corporation for total consideration of $84 million, including $64 million in cash, $11 million in assumed liabilities and $9 million in transaction costs. The agreement also includes potential future sales-based milestone payments of up to $350 million, subject to certain adjustments.

The transaction was accounted for as an asset acquisition under ASC 805, Business Combinations, as substantially all of the value was attributed to a single in-process research and development (“IPR&D”) asset related to Larsucosterol, a drug candidate for alcohol-associated hepatitis. Clinical testing for Larsucosterol is ongoing and the drug candidate has not yet received regulatory approval from the U.S. Food and Drug Administration (“FDA”). Accordingly, $81 million of consideration was allocated to Acquired IPR&D and expensed in accordance with ASC 730, Research and Development, with the remaining $3 million of consideration allocated to other assets. The expense was recorded in Other expense (income), net in the Condensed Consolidated Statements of Operations.

During December 2025, Bausch + Lomb, through its affiliates, completed a transaction to acquire certain manufacturing equipment, other assets and the assumption of a manufacturing facility lease in Mexico for an upfront cash payment of approximately $75 million and potential future milestone payments of up to $35 million.

This acquisition has been accounted for as a business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed, as of the acquisition date:

The assets acquired and liabilities assumed are included within Bausch + Lomb’s Surgical business. Goodwill associated with this acquisition represents potential future synergies and is deductible for income tax purposes.

The valuation of the assets acquired and liabilities assumed, as part of this acquisition, has not been finalized as of June 30, 2026. Bausch + Lomb will finalize these amounts no later than one year from the acquisition date.

During November 2025, Bausch + Lomb completed two acquisitions which were accounted for as business combinations under the acquisition method of accounting. The aggregate cash consideration of approximately $33 million was allocated to the assets acquired and liabilities assumed and included $30 million of goodwill, in the aggregate.

During January 2025, Bausch + Lomb, through an affiliate, acquired Whitecap Biosciences, LLC (“Whitecap Biosciences”) for an upfront payment of approximately $28 million and potential future milestone and royalty payments. Bausch + Lomb accounted for the transaction as an asset acquisition and expensed the upfront payment of approximately $28 million as acquired IPR&D costs, as included within Other expense (income), net on the Condensed Consolidated Statements of Operations. In July 2026, Bausch + Lomb announced that the Phase 2 study regarding Whitecap Biosciences’ glaucoma neuroprotective candidate did not meet its primary endpoint, and as such will no longer advance this program, and instead, will now focus solely on (in respect of Whitecap Biosciences) developing the first small-molecule sustained-release implant for geographic atrophy.