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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 178 added, 185 removed, 86 unchanged (81% of the section changed)

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Cumberland Pharmaceuticals Inc.

("Cumberland," the "Company," or as used in the context of "we," "us," or "our"), is a specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription pharmaceuticals.

We are dedicated to our mission of working together to provide unique products that improve the quality of patient care.

Our primary target markets are hospital acute care, gastroenterology and oncology.

These medical specialties are characterized by relatively concentrated prescriber bases that we believe can be served effectively by small, targeted sales forces.

We promote our approved products through our hospital, field and oncology sales divisions in the United States.

We have built a network of established international partners with the needed regulatory and commercial capabilities to register and provide our medicines to patients in their countries.

Our portfolio of brands approved for marketing by the U.S.

Food and Drug Administration ("FDA") includes:

• Acetadote ® ( acetylcysteine ) injection, for the treatment of acetaminophen poisoning;

• Caldolor ® ( ibuprofen ) injection, for the treatment of pain and fever;

• Kristalose ® ( lactulose ) oral solution, a prescription laxative for the treatment of constipation;

• Sancuso ® ( granisetron ) transdermal, for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy treatment;

• Vaprisol ® ( conivaptan ) injection, to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia ;

• Vibativ ® ( telavancin ) injection, for the treatment of certain serious bacterial infections including hospital-acquired and ventilator-associated bacterial pneumonia, as well as complicated skin and skin structure infections;

• Talicia ® ( omeprazole magnesium, amoxicillin and rifabutin ) oral capsule, for the treatment of H.

pylori infection.

In addition to these commercial brands, we have announced breakthrough results in a clinical study of our ifetroban product candidate in patients with cardiomyopathy associated with Duchenne muscular dystrophy (“DMD”).

("Cumberland," the "Company," or as used in the context of "we," "us," or "our"), is an innovation-focused biopharmaceutical company developing new product candidates for rare diseases and other serious conditions.

Following the completion of a Strategic Transaction to integrate our commercial brands and organization with Apotex Inc.

(“Apotex”), Cumberland has increased its focus on advancing its proprietary pipeline addressing poorly met medical needs with large potential market opportunities.

Cumberland is developing ifetroban across a range of late stage clinical programs targeting serious conditions with limited treatment options:

• In February 2025 we announced breakthrough results from the Phase 2 FIGHT DMD clinical study of our ifetroban product candidate in patients with cardiomyopathy associated with Duchenne muscular dystrophy (“DMD”).

This rare, fatal genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles.

We then completed and submitted a clinical study report to the FDA and began interactions to determine their remaining development requirements.

We also have Phase II clinical programs underway evaluating our ifetroban product candidate in patients with 1) Systemic Sclerosis (“SSc”) or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs and 2) Idiopathic Pulmonary Fibrosis (“IPF”), the most common form of progressive fibrosing interstitial lung disease.

Investigational new study applications have been cleared by the FDA enabling us to launch clinical studies in each of these areas.

Cumberland has built core competencies for the acquisition, development and commercialization of pharmaceutical products in the U.S., and we can leverage this existing infrastructure to support our continued growth.

Our management team consists of pharmaceutical industry veterans with experience in business development, product development, regulatory, manufacturing, sales, marketing and finance.

Our business development team identifies, evaluates and negotiates product acquisition, licensing and co-promotion arrangements.

Our product development team creates proprietary formulations, manages our clinical studies, prepares our FDA submissions and staffs our medical call center.

Our quality and manufacturing professionals oversee the manufacturing, release and shipment of our brands.

Our marketing and sales organization is responsible for our commercial activities, and we work closely with our distribution partners to ensure the availability and delivery of our products.

We have submitted a clinical study report to the FDA and have begun interactions to determine the remaining regulatory requirements.

The program has received FDA Orphan Drug and Rare Pediatric Disease and Fast Track designations.

In February 2026, the program also received FDA Fast Track designation.

• We also have a Phase 2 clinical program evaluating our ifetroban product candidate in patients with Systemic Sclerosis (“SSc”), or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs.

Enrollment in the study is complete and evaluation of the resulting data is underway, with top-line results anticipated as the next milestone.

• Another Phase 2 is underway evaluating ifetroban in patients with Idiopathic Pulmonary Fibrosis (“IPF”), the most common form of progressive fibrosing interstitial lung disease.

Patients are currently being enrolled at medical centers across the U.S.

Favorable interim safety findings have been announced, and the next milestone is the release of interim efficacy results.

• In collaboration with Vanderbilt Health, we also completed a Phase 2 study of ifetroban to prevent metastasis in high-risk sold tumors.

The study’s primary safety endpoint was achieved.

In addition, there were favorable trends in decreased metastasis recurrence and metastasis-free survival.

Planning is underway for a follow-up study to confirm these findings.

In addition to these late stage clinical programs, Cumberland maintains a majority ownership in Cumberland Emerging Technologies (CET), which partners with leading academic institutions to identify and support the progress of promising new product candidates.

Several new product candidates are in development at CET, including a treatment for hospitalized patients with delirium.

GROWTH STRATEGY

Cumberland’s current growth strategy, prior to closing the transaction with Apotex Inc., involves maximizing the potential of our existing brands, while continuing to build a portfolio of differentiated products.

We currently own rights to seven products approved by the FDA in the United States.

We have also established international partnerships to bring our medicines to patients in other countries.

Additionally, we look for opportunities to expand our brands into new patient populations through clinical trials, new product presentations and our support of select, investigator-initiated studies.

Meanwhile, our clinical team is developing a pipeline of new product candidates to address poorly met medical needs.

We also pursue opportunities to acquire additional marketed brands, as well as late-stage development product candidates in our target medical specialties.

We are supplementing these activities with the earlier-stage product development at Cumberland Emerging Technologies ("CET"), our majority-owned subsidiary.

CET partners with academic research institutions to identify and support the progress of promising new product candidates, which Cumberland can further develop and commercialize.

Specifically, we are seeking long-term, sustainable growth by:

• Supporting and expanding the use of our marketed products.

We continue to evaluate our products following their FDA approval to determine if additional clinical data could expand their market and use.

For example, we have secured pediatric approval of Acetadote and Caldolor and expanded the labeling for both brands accordingly.

We also added pre-surgery dosing for Caldolor, and more recently included newborns to the patients who can benefit from the product.

• Selectively adding complementary brands.

In addition to our product development activities, we are also seeking to acquire approved brands or late-stage development product candidates to continue to build our portfolio.

We seek under-promoted, FDA-approved drugs as well as late-stage development products that can improve patient care.

We will continue to target product acquisition candidates that are competitively differentiated and have valuable intellectual property or other protective features.

Our acquisitions of Vibativ and Sancuso are examples of the implementation of this strategy.

• Progressing our clinical pipeline and incubating future product opportunities at CET.

We believe it is important to build a pipeline of innovative new product opportunities, as we are doing through our ifetroban Phase II development programs.

We are also supplementing our acquisitions and late-stage development activities with the early-stage product development activities at CET.

• Leveraging our infrastructure through co-promotion partnerships.

We believe that our commercial infrastructure can help drive prescription volume and product sales.

We also look for select partners that can complement our capabilities and enhance opportunities for our brands.

For example, our co-promotion partnerships have allowed us to expand the support for Kristalose across the United States.

• Building an international contribution to our business.

We hold the worldwide rights to all our brands except for Sancuso, as we acquired only the U.S.

rights for that product.

We have established our own commercial capabilities, including three sales divisions, that focus on the U.S.

market for our products.

We are also working with a network of established international partners to register our products and make them available to patients in their countries.

We will continue to support our partners’ registration and commercialization efforts in their respective territories.

The acquisition of Vibativ resulted in several new international partners and market opportunities.

Cumberland's growth strategy is centered on creating long-term shareholder value by advancing its proprietary line of differentiated product candidates, while maintaining financial discipline.

We are seeking long-term, sustainable growth by:

• Progressing our clinical programs.

We are pursuing a series of key milestones in the clinical development and registration of the innovative new product opportunities associated with our ifetroban development programs.

We are seeking efficient regulatory pathways and designations for therapies that address significant unmet medical needs.

• Incubating future product opportunities at CET.

We are also supplementing our clinical development activities with the early-stage product development activities at CET.

• Leveraging our partnerships.

We seek to collaborate with leading academic institutions, health care organizations and industry partners that complement our product development capabilities.

These relationships enable us to advance our clinical programs, expand our research efforts and identify new opportunities to develop innovative therapies.

• Managing our operations with financial discipline.

We continually work to manage our expenses in line with our revenues to deliver positive cash flow from operations.

We also seek to maintain favorable gross margins and a strong balance sheet.

We have strengthened our balance sheet by adding significant new capital, paying off the balance on our line of credit and enhancing our financial flexibility to support the continued advancement of our pipeline, while also creating significant financial reserves for special opportunities.

We plan to carefully manage our operating expenses and investments to preserve the resources necessary to execute our strategic objectives while delivering sustainable value for shareholders.

RECENT DEVELOPMENTS

Strategic Transaction

We recently announced a Strategic Transaction with Apotex, the largest Canadian-based pharmaceutical company to integrate our branded U.S.

commercial businesses.

Under the terms of the agreement, Apotex will acquire our portfolio of FDA-approved brands for $100 million in cash consideration, subject to our shareholders’ approval and certain other customary closing conditions.

Apotex agreed that, in the event, that prior to the two-year anniversary of the closing of the Transaction, Apotex, or its affiliates is awarded a contract by the United States Department of Health and Human Services (or any division thereof) for the supply of Vibativ for certain specified uses, then Apotex must provide a milestone payment to the Company, subject to the terms and conditions set forth in the Agreement, including the achievement of certain net sales associated with such contract.

At the closing of the Transaction, Cumberland intends to enter into a transition services agreement with Apotex, pursuant to which Cumberland will provide Apotex and its affiliates certain transition services following the date of the closing of the Transaction in accordance with the terms and conditions set forth in the transition services agreement.

As consideration for the provision of the transition services, Apotex and its affiliates will pay Cumberland $150,000 per month plus reimbursement of certain pre-approved pass-through costs.

In addition to the Asset Purchase Agreement, Apotex will also make a one-time payment to Cumberland on the one-year anniversary of the closing of the Transaction to reimburse Cumberland for finished goods inventory received by Apotex in the Transaction in an aggregate amount of $ 9 million, less finished goods inventory sold by Cumberland on behalf of Apotex under the transition services agreement to be entered into in connection with the closing of the Transaction.

This Transaction is designed to unlock value and sharpen our focus on advancing our pipeline of differentiated product candidates designed to address unmet medical needs.

Following the closing of the Transaction, we will retain our development programs, as well as our majority ownership in Cumberland Emerging Technologies.

This positions Cumberland to then operate with the profile of a development-stage biopharmaceutical organization.

Fast Track Designation from the FDA

During the first quarter of 2026, the FDA granted Fast Track Designation for our ifetroban candidate product, targeting a fatal form of heart disease in Duchenne muscular dystrophy (DMD) patients.

This designation is intended to accelerate the development and review of therapies addressing serious conditions with unmet medical needs.

Importantly, it allows for more frequent FDA interaction, rolling data submissions and earlier guidance throughout the approval process.

The program previously received both Orphan Drug and Rare Pediatric Disease designations from the FDA.

Promotional Launch of Talicia ®

In February 2026, we announced the launch of our national sales promotion for Talicia, under our co-commercialization agreement with Talicia Holding Inc., which we jointly own with RedHill Biopharma.

Under this agreement, we assumed responsibility for the distribution and sales promotion of the brand in the U.S.

As part of the launch, we are utilizing our existing field sales division which also promotes Kristalose, with supporting marketing initiatives designed to increase awareness among gastroenterologists and other prescribers.

New Sancuso ® Website

In March 2026, we announced the launch of the new Sancuso website, which is designed to provide health care professionals and patients with enhanced access to educational resources, clinical information and expert insights related to the prevention of chemotherapy-induced nausea and vomiting.

The website also features the brand’s key message :

“Sancuso – the Difference between Life and Living” .

Expanded Indication for Caldolor ®

In April 2026, we announced approval from the FDA for an expanded indication for Caldolor.

The indication now includes the management of postoperative pain.

This approval enhances the clinical utility of Caldolor and supports its role in non-opioid, and opioid-sparing pain management strategies.

With this update, Caldolor is indicated for use in adult and pediatric patients ages 3 months and older for:

• Management of mild to moderate pain, including postoperative pain

• Management of moderate to severe pain, including postoperative pain, as an adjunct to opioid analgesics

• Reduction of fever

This expanded labeling further broadens Caldolor’s use across perioperative and acute care settings.

On April 2, 2026, President Trump issued a proclamation under Section 232 of the Trade Expansion Act of 1962, significantly imposing new tariffs on patented pharmaceuticals and pharmaceutical ingredients.

We are carefully assessing how these new rules may affect our operations and supply chains.

It appears that the tariffs will not apply to our products that are not patented, and that our products originating in Europe and India may involve a low tariff rate based on trade agreements between the U.S.

and those countries.

We have entered an exciting time for our Company.

While we continue to operate our commercial business, we are also planning to implement the transformational transaction with Apotex , following a decision by our shareholders to approve it and satisfaction of the other conditions to closing.

We look forward to the opportunity to increase the focus on our pipeline of new medicines that address unmet medical needs for patients.

Completion of Strategic Transaction with Apotex

We recently announced the closing of our Transaction with Apotex to integrate our branded businesses.

Under the terms of the agreement, Apotex acquired our portfolio of FDA-approved brands for $100 million in cash consideration, following approval by our shareholders.

This transaction was designed to unlock value and sharpen our focus on advancing our pipeline of differentiated product candidates designed to address unmet medical needs.

Following the transaction, we have retained our development programs, as well as our majority ownership in Cumberland Emerging Technologies.

A number of our employees received and accepted offers of employment from Apotex and began employment with Apotex on July 31, 2026.

This transactions positions Cumberland to operate with the profile of a development-stage biopharmaceutical organization.

Board Declares a Special Dividend

Cumberland’s Board of Directors authorized and declared a special cash dividend of $1.50 per share of the Company’s common stock.

The dividend was paid on July 31, 2026, to the shareholders of record as of July 23, 2026.

Following the closing of the transaction with Apotex, an analysis by the Company’s tax advisors, along with refined financial projections, indicated greater net cash from the transaction than originally projected.

Therefore, Cumberland’s Board assessed the Company’s future cash needs and evaluated possible alternatives for the excess capital.

The Board determined that after the payout of the special dividend, the Company will still have significant liquidity and financial flexibility to fund its long-term product development efforts, with additional reserves available to address any new opportunities.

Updated Results Shared at PPMD Conference

In June 2026, we presented updated results from our Phase 2 FIGHT DMD clinical trial evaluating ifetroban in patients with Duchenne muscular dystrophy-associated cardiomyopathy at the annual Parent Project Muscular Dystrophy (PPMD) Conference.

The updated data included new blood biomarker findings directionally consistent with heart muscle protection, with increases in markers of cardiac protection and repair and reductions in markers of heart muscle injury and cell damage with ifetroban treatment.

These biomarker results reinforce the previously reported improvements in cardiac function, consistent with ifetroban’s ability to slow the progression of DMD-related heart disease.

Together, the findings strengthen the case for developing ifetroban as a therapy targeting cardiomyopathy, the leading cause of death in patients with DMD.

Positive Results in Cancer Metastasis Prevention

In collaboration with Vanderbilt Health, we announced results from a randomized, placebo-controlled Phase 2 study evaluating ifetroban as a potential therapy to inhibit cancer metastasis in patients with Stage I to III malignant solid tumors at high risk of metastatic recurrence.

The study met its primary objective of assessing safety and feasibility.

Ifetroban was found to be safe and well-tolerated, and no safety signals were identified in markers of blood clotting function.

Although intentionally not powered for efficacy, the study also compared the percentage of patients with distant metastatic recurrence 12 months after completion of therapy in both groups (10 placebo-treated and 18 ifetroban-treated participants) as a prespecified secondary endpoint.

While 50% of participants experienced distant metastatic recurrence in the placebo arm, only 17% of participants experienced distant metastatic recurrence in the ifetroban arm (p=0.091).

Three deaths due to distant metastatic disease occurred in the placebo arm, and none occurred in the ifetroban arm (p=0.037).

Metastatic recurrence occurred in 3 of 18 patients (17%) receiving ifetroban, compared with 5 of 10 patients (50%) receiving placebo, a difference that did not reach statistical significance (odds ratio 0.21;

There were no deaths from distant metastatic disease among patients receiving ifetroban, compared with 3 of 10 patients (30%) receiving placebo (p=0.037).

The findings support the continued clinical development of ifetroban as a potential approach to inhibiting the metastatic process, an area of significant unmet medical need.

The completion of our strategic transaction with Apotex marked a transformational milestone for Cumberland, strengthening our financial position and increasing our focus on developing innovative new therapies.

With a differentiated clinical pipeline, continued investment in Cumberland Emerging Technologies programs and a disciplined approach to capital allocation, we believe the Company is positioned to advance scientific innovation, while creating long-term value for patients, health care providers and shareholders.

We remain committed to executing our development strategy and look forward to reporting our continued progress.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

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RESULTS OF OPERATIONS

Three months ended March 31, 2026 compared to the three months ended March 31, 2025

The following table presents the unaudited interim statements of operations for continuing operations for the three months ended March 31, 2026 and 2025:

Three months ended March 31,

Three months ended June 30, 2026 compared to the three months ended June 30, 2025

The following table presents the unaudited interim statements of operations for continuing operations for the three months ended June 30, 2026 and 2025:

Three months ended June 30,

2026 2025 Change

Net revenues $ 9,131,317 $ 11,713,055 $ (2,581,738)

Net revenues from continuing operations $ 166,458 $ 380,797 $ (214,339)

Costs and expenses:

Cost of products sold 1,933,889 1,425,714 508,175

Selling and marketing 5,064,875 4,231,980 832,895

Research and development 772,162 837,401 (65,239)

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Interest expense (724) (471) (253)

Income (loss) before income taxes (3,137,100) 1,253,854 (4,390,954)

Loss before income taxes (3,100,301) (2,992,501) (107,800)

Income tax expense (3,870) (5,671) 1,801

Co-commercialization investment loss (146,080) — (146,080)

Net income (loss) $ (3,287,051) $ 1,248,184 $ (4,535,235)

The following table summarizes net revenues by product for the periods presented:

Three months ended March 31,

Net loss from continuing operations (3,104,171) (2,998,172) (105,999)

Net income (loss) from discontinued operations (1,170,259) 2,262,965 (3,433,224)

Net loss $ (4,274,430) $ (735,207) $ (3,539,223)

Net revenues.

The total net revenues for the three months ended June 30, 2026, were $0.2 million compared to $0.4 million for the three months ended June 30, 2025.

The revenue from the branded products is classified as discontinued operations.

These products were acquired by Apotex on July 1, 2026.

Please see Note (3) Revenues for further results of operations by branded product.

Research and development .

The research and development costs for the three months ended June 30, 2026 and 2025, were $0.8 million.

A portion of our research and development costs is variable as we continue to fund the ongoing clinical initiatives associated with our pipeline product candidates.

These variable costs depend on the number of active trials, study sites and patients as well as the cost per patient in each of our clinical programs.

General and administrative .

The general and administrative expense for the second quarter of 2026 was $2.5 million similar to $2.7 million for the same period in 2025.

Amortization.

Amortization for the three months ended June 30, 2026 and 2025, totaled approximately $0.01 million related to intellectual property of our study drug.

Income taxes .

The income tax expense for the three months ended June 30, 2026, and for the three months ended June 30, 2025 was minimal for each year.

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the three months ended June 30, 2026 and 2025.

Research and Development Expenses Three months ended June 30,

External research and development expenses

Clinical development $ 402,054 $ 477,882

Regulatory expenses 440,279 357,401

Other external 18,470 9,616

Total external expenses 860,803 844,899

Internal research and development expenses

Personnel costs 515,400 559,403

Other internal 43,083 64,097

Total internal expenses 558,483 623,500

Total research and development expenses 1,419,286 1,468,399

Discontinued operations (647,124) (630,998)

Research and development expenses from continuing operations $ 772,162 $ 837,401

RESULTS OF OPERATIONS

Six months ended June 30, 2026 compared to the six months ended June 30, 2025

The following table presents the unaudited interim statements of operations for continuing operations for the six months ended June 30, 2026 and 2025:

Six months ended June 30,

2026 2025 Change

Sancuso 2,928,634 2,256,294 672,340

Vibativ 2,118,295 1,378,066 740,229

Talicia 1,916,481 — 1,916,481

Kristalose 981,483 3,484,310 (2,502,827)

Caldolor 965,564 1,307,439 (341,875)

Acetadote 51,981 151,651 (99,670)

Vaprisol 517 (600) 1,117

Omeclamox-Pak 1 (5,387) 5,388

RediTrex (489) (347) (142)

Other revenue 168,850 3,141,629 (2,972,779)

Total net revenues $ 9,131,317 $ 11,713,055 $ (2,581,738)

Net revenues from continuing operations $ 330,308 $ 547,425 $ (217,117)

Costs and expenses:

Research and development 1,538,007 1,522,188 15,819

General and administrative 4,870,980 4,855,889 15,091

Amortization 14,152 11,844 2,308

Total costs and expenses 6,423,139 6,389,921 33,218

Operating loss (6,092,831) (5,842,496) (250,335)

Interest income 138,915 253,198 (114,283)

Interest expense (790) (4,863) 4,073

Loss before income taxes (5,954,706) (5,594,161) (360,545)

Income tax expense (7,741) (11,341) 3,600

Net loss from continuing operations (5,962,447) (5,605,502) $ (356,945)

Net income (loss) from discontinued operations (1,599,034) 6,118,479 (7,717,513)

Net income (loss) $ (7,561,481) $ 512,977 $ (8,074,458)

Net revenues.

The total net revenues for the three months ended March 31, 2026, were $9.1 million compared to $11.7 million for the three months ended March 31, 2025.

However, the 2025 revenues included a $3.0 million milestone payment associated with the approval of Vibativ in China.

Sancuso revenue was $2.9 million for the first quarter of 2026, compared to $2.3 million for the first quarter of 2025 primarily due to higher sales volume of the product.

Vibativ revenue was $2.1 million for the three months ended March 31, 2026, compared to $1.4 million for the same prior year period, due to higher sales volumes, including growing shipments of the product's 4-Pak presentation.

Talicia revenue was $1.9 million for the three months ended March 31, 2026.

Shipments of the brand began in October 2025, and therefore there were no product sales during the prior year period.

Kristalose revenue was $1.0 million for the first quarter of 2026 compared to $3.5 million for the same period in the prior year.

The decrease was the result of lower sales volume primarily due to the timing of shipments to one of our co-promotion partners, in addition to increased generic substitution.

Caldolor revenue was $1.0 million for the first quarter of 2026, compared to $1.3 million for the first quarter of 2025.

The decrease was primarily due to the timing of international shipments for the product.

Acetadote revenue includes net sales of our Acetadote brand and our share of net sales from our Authorized Generic.

During the first quarter of 2026, there was a decrease of $0.1 million in the product's revenue when compared to the prior year period due to being out of inventory for both presentations of the product.

There was no Vaprisol revenue for the three months ended March 31, 2026 as Cumberland is currently out of inventory of the product as we await FDA approval on a new manufacturer.

The amount represents adjustments of deductions from previous sales of the product.

Other revenue was $0.2 million for the three months ended March 31, 2026, compared to $3.1 million for the three months ended March 31, 2025.

The decrease was primarily due to a milestone payment received in the first quarter of 2025.

Cost of products sold .

The cost of products sold for the first quarter of 2026 and 2025 were $1.9 million and $1.4 million, respectively.

Cost of products sold, as a percentage of net revenues, were 21.2% during the three months ended March 31, 2026, compared to 12.2% during the three months ended March 31, 2025.

The percentage increase is primarily due to the impact of a $3.0 million milestone payment received in 2025.

Selling and marketing .

The selling and marketing expenses for the first quarter of 2026 and 2025, were $5.1 million and $4.2 million, respectively.

The increase is primarily due to the costs associated with the addition of Talicia.

The net revenues for the six months ended June 30, 2026, were $0.3 million compared to $0.5 million for the six months ended June 30, 2025.

The revenue from the branded products is classified as discontinued operations.

These products were acquired by Apotex on July 1, 2026.

Please see Note (3) Revenues for further results of operations by branded product.

Research and development .

The research and development costs for the three months ended March 31, 2026 and 2025, were $1.5 million and $1.3 million, respectively.

A portion of our research and development costs is variable based on the number of trials, study sites, number of patients and the cost per patient in each of our clinical programs.

The research and development costs were $1.5 million for the first six months of 2026 approximately as for the same period last year.

A portion of our research and development costs is variable as we continue to fund the ongoing clinical initiatives associated with our pipeline product candidates.

These variable costs depend on the number of active trials, study sites and patients as well as the cost per patient in each of our clinical programs.

General and administrative .

The general and administrative expense for the first quarter of 2026 was $2.6 million similar to $2.5 million for the same period in 2025.

The components of the statements of operations discussed above reflect the following impacts from Vibativ:

Financial Impact of Vibativ Three months ended March 31,

Net revenue (1)

$ 2,118,295 $ 4,353,066

Cost of products sold (2)

608,984 248,441

Royalty and operating expenses 560,062 510,676

Vibativ contribution $ 949,249 $ 3,593,949

(1) Net revenue for 2025 includes $2,975,000 related to a milestone payment received.

(2) The Vibativ inventory included in the costs of product sold during the period was acquired and paid for by Cumberland as part of the acquisition of the brand during 2018.

The components of the statements of operations discussed above reflect the following impacts from Sancuso:

Financial Impact of Sancuso Three months ended March 31,

Net revenue $ 2,928,634 $ 2,256,294

Cost of products sold 131,506 143,976

Royalty and operating expenses 910,861 929,817

Sancuso contribution $ 1,886,267 $ 1,182,501

The general and administrative expenses for the six months ended June 30, 2026, was $4.9 million compared to $4.9 million during the six months ended June 30, 2025.

This slight increase is due to a decline in corporate life insurance charges for the period.

Amortization.

The amortization expense is the ratable use of our capitalized intangible assets including product and license rights, patents, trademarks and patent defense costs.

Amortization for the three months ended March 31, 2026 and 2025, totaled approximately $1.2 million and $1.0 million, respectively.

Amortization for the six months ended June 30, 2026, and six months ended June 30, 2025, totaled approximately $0.01 million related to intellectual property of our study drug.

Income taxes .

The income tax expense for the three months ended March 31, 2026, and for the three months ended March 31, 2025 was minimal for each year.

The income tax expense for the six months ended June 30, 2026 and 2025, was $0.01 million.

As of June 30, 2026, we held approximately $52.6 million in federal net operating loss carryforwards including approximately $44.1 million of net operating loss carryforwards resulting from the exercise of nonqualified stock options that have historically been used to significantly offset income tax obligations.

For the tax year 2026, the Company expects to utilize these net operating loss carryforwards to offset the tax liability associated with the taxable gain resulting from closing the Strategic Transaction with Apotex.

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the three months ended March 31, 2026 and 2025.

Research and Development Expenses Three months ended March 31,

The following table shows the primary components of our research and development expenses for the six months ended June 30, 2026 and 2025.

Research and Development Expenses Six months ended June 30,

External research and development expenses

Clinical development

$ 902,799 $ 890,104

Regulatory expenses

848,488 715,101

Other external

34,269 23,290

Total external expenses

1,785,556 1,628,495

Internal research and development expenses

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Other internal

99,172 119,571

Total internal expenses

1,092,166 1,134,980

Total research and development expenses

2,877,722 2,763,475

Discontinued operations (1,339,715) (1,241,287)

Research and development expenses from continuing operations $ 1,538,007 $ 1,522,188

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

Our primary sources of liquidity are cash equivalents, cash flows from operations and the amounts borrowed under our line of credit.

We believe that our internally generated cash flows, existing working capital and our line of credit will be adequate to finance internal growth, finance business development initiatives, and fund capital expenditures for the foreseeable future.

The following table summarizes our liquidity and working capital as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Following the closing of the Strategic Transaction on July 1, 2026, our primary sources of liquidity are our cash and cash equivalents, the $100.0 million of proceeds received from Apotex, interest income earned on those proceeds, the inventory reimbursement of up to $9.0 million payable over the twelve months following closing, and grant funding at Cumberland Emerging Technologies.

Our continuing operations do not generate product revenues and we expect them to use cash in operations for the foreseeable future.

We believe that our internally generated cash flows, existing working capital and the $100 million received July 1, 2026, from Apotex will be adequate to finance internal growth, finance business development initiatives and fund capital expenditures for the foreseeable future.

Working capital was negative $1.6 million as of June 30, 2026, compared with positive $0.3 million as of December 31, 2025.

Working capital attributable to continuing operations was negative $11.8 million as of June 30, 2026.

That deficit results principally from the balance sheet classification required by ASC 205-20:

the branded product inventories of $14.5 million are presented within current assets of discontinued operations, while the related trade accounts payable of the divested business were retained by the Company and remain within accounts payable in continuing operations.

It does not reflect a change in the Company's ability to meet its obligations.

The revolving credit facility with Pinnacle Bank was repaid in full and terminated on June 29, 2026, and accordingly no borrowing availability existed as of June 30, 2026.

Subsequent to June 30, 2026, the Company received $100.0 million of cash consideration at the closing of the Strategic Transaction on July 1, 2026, and is entitled to receive an inventory reimbursement of up to $9.0 million over the twelve months following closing.

On July 31, 2026, the Company paid a special cash dividend of $1.50 per share, or approximately $22.5 million in the aggregate based on shares outstanding as of June 30, 2026, to shareholders of record as of July 23, 2026.

The Board also authorized an open-market share repurchase program of up to $5.0 million.

After giving effect to these transactions, the Company believes its cash and cash equivalents are sufficient to fund its operations and product development programs for at least the twelve months following the date these financial statements are issued.

The following table summarizes our liquidity and working capital as of June 30, 2026 and December 31, 2025:

June 30, 2026 December 31, 2025

Cash and cash equivalents $ 3,862,402 $ 11,444,693

1 unchanged sentence

Current ratio (multiple of current assets to current liabilities) 1.0 1.0

Working capital, continuing operations $ (11,830,110) $ (591,841)

Working capital, discontinued operations $ 10,278,117 $ 907,189

Revolving line of credit availability $ — $ 9,759,267

The following table summarizes our net changes in cash and cash equivalents for the three months ended March 31, 2026 and March 31, 2025:

Three months ended March 31,

The following table summarizes our net changes in cash and cash equivalents for the six months ended June 30, 2026 and June 30, 2025:

Six months ended June 30,

Net cash provided by (used in):

3 unchanged sentences

Net decrease in cash and cash equivalents $ (7,582,291) $ (1,876,903)

The net $0.4 million decrease in cash and cash equivalents for the three months ended March 31, 2026, was primarily attributable to $0.8 million of cash used in financing activities and $0.1 million of cash used in investing activities, partially offset by $0.4 million of cash provided by operating activities.

Cash provided by operating activities totaled $0.4 million for the three months ended March 31, 2026, primarily due to a $2.7 million decrease in accounts receivable, a $1.3 million increase in depreciation and amortization expense, a $0.7 million decrease in inventory and a $0.4 million decrease in other assets.

These cash inflow items were partially offset by the $3.3 million net loss and $1.3 million due to a decrease in accounts payable and other current liabilities.

Cash used in investing activities totaled $0.1 million which was the result of an increase in cash surrender value of life insurance policies and additions to intangible assets.

Cash used in financing activities totaled $0.8 million for the three months ended March 31, 2026, primarily due to $0.7 million for cash settlement of contingent consideration and $0.1 million in cash used to repurchase shares of our common stock.

The net $2.9 million decrease in cash and cash equivalents for the three months ended March 31, 2025, was primarily attributable to $6.8 million of cash used in financing and investing activities, partially offset by $3.9 million of cash provided by operating activities.

Cash provided by operating activities totaled $3.9 million for the three months ended March 31, 2025, primarily due to the $1.2 million net income, adjusted by adding back a $1.2 million decrease in accounts receivable, a $1.0 million decrease in inventory, $0.3 million in amortization of operating lease right-of-use assets and $1.0 million in depreciation and amortization expense, partially offset by deducting a $0.2 million decrease in operating lease liability and a $0.6 million decrease in accounts payable and other current liabilities.

Cash used in financing activities totaled $5.5 million for the three months ended March 31, 2025, primarily due to $10.0 million in payments on our line of credit, $0.5 million for cash settlement of contingent consideration, and $0.2 million in cash used to repurchase shares of our common stock, partially offset by $5.3 million in proceeds from our ATM offering.

Net decrease in cash and cash equivalents, continuing operations

$ (10,641,336) $ (5,806,754)

Net increase in cash and cash equivalents, discontinued operations $ 3,059,046 $ 3,929,851

The net $7.6 million decrease in cash and cash equivalents for the six months ended June 30, 2026, was primarily attributable to $6.2 million of cash used in financing activities and $2.0 million of cash used in investing activities, partially offset by $0.6 million of cash provided by operating activities.

Cash provided by operating activities totaled $0.6 million for the six months ended June 30, 2026, is primarily driven by a $3.5 million decrease in accounts receivable, amortization of right-of-use assets of $0.5 million, an increase in accounts payable of $0.1 million and $4.1 million provided by discontinued operations.

These cash inflows were partially offset by the net loss of $7.6 million.

Cash used in continuing operations was $3.5 million and cash provided by discontinued operations was $4.1 million.

Cash used in investing activities totaled $2.0 million which was the result of an increase in investment in manufacturing.

Cash used in investing activities from continuing operations was $1.8 million.

Cash used in investing activities from discontinued operations was $0.1 million.

Cash used in financing activities totaled $6.2 million for the six months ended June 30, 2026, primarily due to paying off the line of credit of $5.2 million.

Cash used in financing activities from continued operations was $5.3 million and cash used in financing activities from discontinued operations was $0.8 million.

The net $1.9 million decrease in cash and cash equivalents for the six months ended June 30, 2025, was primarily attributable to $5.7 million of cash used in financing and $0.1 million used in investing activities, partially offset by $4.7 million of cash provided by operating activities.

Cash used in continuing operations was $5.8 million and cash provided by discontinued operations was $3.9 million.

Debt Agreement

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The Amendment extends the maturity date to October 1, 2027.

On June 29, 2026, in connection with the closing of the Strategic Transaction with Apotex, Cumberland terminated and repaid in full all outstanding obligations, approximately $5.2 million, due under the Loan Agreement dated as of September 5, 2023.

In connection with the termination and repayment in full of all outstanding obligations under the Loan Agreement, all related liens and security interests were terminated, discharged and released.

OFF-BALANCE SHEET ARRANGEMENTS

During the three months ended March 31, 2026 and 2025, we did not engage in any off-balance sheet arrangements.

During the six months ended June 30, 2026 and 2025, we did not engage in any off-balance sheet arrangements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis