Note 1. Organization and Nature of Operations Osmotica Pharmaceuticals plc (formerly known as Lilydale Limited and Osmotica Pharmaceuticals Limited) is an Irish public limited company. Osmotica Holdings S.C.Sp. acquired Osmotica Pharmaceuticals plc on April 30, 2018 for the purpose of facilitating an offering of ordinary shares in an initial public offering. On October 22, 2018, Osmotica Pharmaceuticals plc completed its initial public offering (the IPO), in which it issued and allotted 7,647,500 ordinary shares at a public offering price of $7.00 per share. The number of shares issued in the IPO reflected the exercise in full of the underwriters option to purchase 997,500 additional ordinary shares. In addition, the Company issued and allotted 2,014,285 ordinary shares at the public offering price in a private placement to investment funds affiliated with Avista Capital Partners, Altchem Limited and an entity controlled by the Companys Chief Financial Officer. The aggregate net proceeds from the IPO and the private placement were approximately $58.1 million after deducting underwriting discounts and commissions and estimated offering expenses. Immediately prior to the IPO and prior to the commencement of trading of Osmotica Pharmaceuticals plcs ordinary shares on the Nasdaq Global Select Market, Osmotica Holdings S.C.Sp. undertook a series of restructuring transactions that resulted in Osmotica Pharmaceuticals plc becoming the direct parent of Osmotica Holdings S.C.Sp with each holder of common units of Osmotica Holdings S.C.Sp. receiving approximately 42.84 ordinary shares of Osmotica Pharmaceuticals plc in exchange for each such common unit. In addition, each holder of an option to purchase common units of Osmotica Holdings S.C.Sp. received an option to purchase the number of ordinary shares of Osmotica Pharmaceuticals plc determined by multiplying the number of units underlying such option by approximately 42.84 (rounded down to the nearest whole share) and dividing the exercise price per unit for such option by approximately 42.84 (rounded up to the nearest whole cent). These transactions are referred to as the Reorganization. Accordingly, all share and share amounts for all periods presented in the accompanying financial statements have been adjusted retroactively, where applicable, to reflect the stock split. Until the Reorganization on October 17, 2018, Osmotica Pharmaceuticals plc did not conduct any operations (other than activities incidental to its formation, the Reorganization and the pursuit of an initial public offering). Upon the completion of the Reorganization, the historical consolidated financial statements of Osmotica Holdings S.C.Sp. became the historical financial statements of Osmotica Pharmaceuticals plc. Accordingly, the accompanying consolidated financial statements included herein reflect the financial information of Osmotica Holdings S.C.Sp. Osmotica Holdings S.C.Sp.is a Luxembourg special limited partnership, formed on January 28, 2016. Osmotica Holdings US LLC, a subsidiary of Osmotica Holdings S.C.Sp. entered into a fifty-fifty partnership (the Merger), effective February 3, 2016, pursuant to a definitive agreement between Vertical/Trigen Holdings, LLC (Vertical/Trigen) and members, and Osmotica Holdings Corp Limited and Subsidiaries. Osmotica Holdings S.C.Sp. and several other holding companies and partnerships were formed as a result of the Merger. Pursuant to the Merger, Vertical/Trigen was deemed to be the accounting acquirer. Osmotica is a fully integrated biopharmaceutical company focused on the development and commercialization of specialty products that target markets with underserved patient populations. Unless otherwise indicated or required by the context, references throughout to Osmotica, or the Company, refer to (i) prior to the completion of the Reorganization, Osmotica Holdings S.C.Sp. and its consolidated subsidiaries, including, from and after April 30, 2018, Osmotica Pharmaceuticals plc, and (ii) following the completion of the Reorganization, Osmotica Pharmaceuticals plc and its consolidated subsidiaries, including Osmotica Holdings S.C.Sp. Correction of Immaterial Errors In connection with the preparation of the Companys unaudited condensed consolidated financial statements as of and for the period ended September 30, 2019 and 2018 for inclusion in the Companys Quarterly Report on Form 10-Q, the Company determined that a revision was required to correct misstatements associated with the tax treatment of certain intercompany transactions at the time of the business combination between Osmotica Holdings Limited and subsidiaries and Vertical/Trigen Holdings LLC which occurred on February 3, 2016. Additionally, revisions were necessary to correct misstatements related to uncertain tax provisions and prepaid taxes and certain other previously identified immaterial misstatements. The Company assessed the materiality of the misstatements both quantitatively and qualitatively and determined the correction of these errors were immaterial to all prior consolidated financial statements taken as a whole and, therefore, amending previously filed financial statements to correct the errors was not required. However, correcting the cumulative effect of the errors in the Companys period ended September 30, 2019 would materially misstate the operating results of the period ended September 30, 2019. Accordingly, the Company has reflected the corrections in the results for prior periods as described below. The Company will also revise such information in future filings to reflect the correction of the errors. The impacts of the corrections have been reflected throughout the consolidated financial statements, including the applicable notes, as appropriate. The correction had no impact on the previously reported amounts of consolidated cash flows from operating, investing or financing activities. The errors were identified as a result of improved processes, controls and personnel that were put in place during 2018 and continuing through 2019. The following table presents the amounts as reported, net correction adjustments, and corrected amounts for items affected by the corrections for the year-to-date three periods ended December 31, 2018 and 2017: Year ended December 31, 2018 As Net As reported adjustments corrected Prepaid expense and other current assets $ 20,743,685 $ (21,327) $ 20,722,358 Total assets 795,644,966 (21,327) 795,623,639 Income taxes payable-current portion 393,552 (393,552)  Income taxes payable-long term portion 1,803,512 737,268 2,540,780 Deferred taxes 26,237,841 2,056,642 28,294,483 Total liabilites 409,375,841 2,400,358 411,776,199 Additional paid in capital 489,949,791 (2,661,820) 487,287,971 Accumulated deficit (102,359,672) 240,135 (102,119,537) Shareholders' equity 386,269,125 (2,421,685) 383,847,440 Total liabilities and shareholders' equity 795,644,966 (21,327) 795,623,639 Income tax benefit 9,267,917 (284,475) 8,983,442 Net loss (109,396,266) (284,475) (109,680,741) Comprehensive loss (110,609,302) (284,475) (110,893,777) Loss per share (2.42)  (2.42) Weighted average shares basic and diluted 45,276,278  45,276,278 Year ended December 31, 2017 As Net As reported adjustments corrected Prepaid expense and other current assets $ 25,498,092 $ (226,524) $ 25,271,568 Total assets 919,740,149 (226,524) 919,513,625 Income taxes payable-long term portion 1,334,645 994,209 2,328,854 Deferred taxes 42,891,444 916,477 43,807,921 Total liabilites 483,956,381 1,910,686 485,867,067 Partners' capital 436,416,914 (2,137,210) 434,279,704 Total Partners' capital 435,783,768 (2,137,210) 433,646,558 Total liabilities and partners' capital 919,740,149 (226,524) 919,513,625 Income tax benefit 44,500,731 (109,005) 44,391,726 Net loss (41,141,811) (109,005) (41,250,816) Comprehensive loss (42,049,738) (109,005) (42,158,743) Loss per share (0.96)  (0.96) Weighted average shares basic and diluted 42,855,722  42,855,722 In each of the tables above, for periods prior to December 31, 2018 weighted averages shares  basic and dilutive have been converted to their ordinary share equivalents by using an exchange ratio of 42.84 (rounded down to the nearest whole share), which was the ratio the common units were converted to ordinary shares of Osmotica Pharmaceuticals plc immediately prior to the Companys initial public offering in October 2018. See Note 1, Organization and Nature of Operations. Other Reclassification Errors In connection with the preparation of the Companys unaudited condensed consolidated financial statements as of and for the period ended September 30, 2019 and 2018 for inclusion in the Companys Quarterly Report on Form 10-Q, the Company made certain reclassifications to cost of goods sold from research and development expenses which were concluded by the Company to be immaterial. For the years ended December 31, 2018 and 2017, we have reclassified $5,068,252 and $2,447,955, respectively, to cost of goods sold from research and development expenses to conform to the current year presentation in the unaudited condensed consolidated financial statements for the period ended September 30, 2019 and 2018.