What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-13 compared with 2023-03-13 · 90 added, 105 removed, 207 unchanged (49% of the section changed)

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We are a specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription pharmaceutical products.

We are dedicated to providing innovative products that improve the quality of care for patients and address poorly met medical needs.

Our commercial portfolio includes eight branded products approved for marketing by the U.S.

Food and Drug Administration (“FDA”).

In addition to these commercial brands, we have Phase II clinical programs underway evaluating our ifetroban product candidate for patients with 1) cardiomyopathy associated with Duchenne Muscular Dystrophy , a fatal, genetic neuromuscular disease, 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by fibrosis of the skin and internal organs and 3) Aspirin-Exacerbated Respiratory Disease , a severe form of asthma.

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

Our commercial portfolio includes seven branded products approved for marketing by the FDA.

In addition to these commercial brands, we have Phase II clinical programs underway evaluating our ifetroban product candidate for patients with 1) cardiomyopathy associated with Duchenne Muscular Dystrophy, a fatal, genetic neuromuscular disease and 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by fibrosis of the skin and internal organs.

We are also developing an oral capsule to treat Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease.

Following FDA clearance of our Investigational New Drug application in May 2023, we are in the process of initiating our Phase II study in patients in centers of excellence across the U.S.

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

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For more information, please see Part I, Item I, Business of this Form 10-K.

• Acquired the U.S.

rights to the FDA-approved oncology-supportive care medicine Sancuso ® from Kyowa Kirin, Inc., the U.S.

affiliate of Japan-based Kyowa Kirin Co., Ltd.

• Formed a specialty sales division, Cumberland Oncology, to support Sancuso.

To augment those efforts, we also entered into a co-promotion agreement to feature Sancuso through another national oncology sales organization.

• Launched Vibativ ® in Puerto Rico, through a partnership with Verity Pharmaceuticals, who has a particular strength and experience in that market.

• Announced a new partnership with Saudi Arabia-based Tabuk Pharmaceutical Manufacturing Co., a fully owned subsidiary of the Astra Industrial Group, to introduce Vibativ in the Middle East.

• Signed a new agreement with Laboratorios Pisa, S.A.

for the exclusive supply and distribution of Caldolor ® , Cumberland’s ibuprofen injection product, in Mexico.

• Entered into two amendments to our agreement with Nordic Group B.V.

who had provided us with a license for the U.S.

rights associated with our RediTrex ® line.

Pursuant to the amendment, in exchange for financial consideration, Nordic may assume responsibility for distributing the methotrexate products in the U.S.

after June 30, 2023.

• Announced the relocation of our headquarters into new offices located on the Broadwest campus in the Vanderbilt/West End corridor of Nashville, which will allow us to accommodate our expected growth and better serve our international base of customers and partners.

• Named Martin S.

to our Board of Directors.

Brown is an attorney with over 30 years of corporate law experience who brings significant legal, public company, health care and civic experience to our board.

The Company relies on several law firms for legal advice, including the firm in which Martin is affiliated.

• Released our third annual Sustainability Report, which details the company’s activities pertaining to our environmental, social and governance matters.

• Modified our line of credit with Pinnacle Bank, which provides for a remaining three-year facility for up to $20 million which ends in October 2024.

• Announced our newly refined mission statement:

Working together to provide unique products that improve the quality of patient care.

• Obtained FDA approval for our Caldolor ® product, to include its use in infants.

The non-narcotic agent may now be administered for the treatment of pain and fever in patients 3 to 6 months of age.

With this newly approved labeling, Caldolor is the only non-opioid product approved to treat pain in infants that is delivered through injection.

• Shared the publication of positive results from a clinical study investigating the safety and pharmacokinetics of Caldolor in newborns.

Published in the journal Pediatric Drugs , the results of the study support the growing body of evidence that demonstrates Caldolor is a safe therapeutic option available to practitioners for the treatment of fever and pain in infants, children and adults.

• Announced a new publication in Antimicrobial Agents and Chemotherapy detailing the results of the first clinical study investigating the safety and pharmacokinetics of our Vibativ ® product in children 2 to 17 years of age.

The results of the study suggest that a single dose of Vibativ is safe in children.

• Completed the Sancuso ® transition from Kyowa Kirin to Cumberland, including the NDA transfer, and initiation of the product’s manufacture at a new facility.

We also expanded our oncology sales division to further support the brand.

• Helped advance the submissions for the approval of Vibativ in China, South Korea and Saudi Arabia.

• Completed the transition of our former RediTrex ® product to Nordic Pharma.

• Obtained FDA clearance of the Investigational New Drug application for a new ifetroban Phase II program in patients with Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease.

• Shared our fourth annual Sustainability Metrics, which detail the Company’s activities pertaining to our environmental, social and governance matters.

• Entered into a new revolving credit loan agreement with Pinnacle Bank for a $20 million facility, expandable to $25 million over a three-year term.

• Continued our corporate share repurchase initiative, with a group of our board members also purchasing shares through Rule 10b5-1 trading plans in order to add to their holdings in the Company.

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Accounting Estimates and Judgments

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

The preparation of condensed consolidated financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

We base our estimates on past experience and on other factors we deem reasonable given the circumstances.

Past results help form the basis of our judgments about the carrying value of assets and liabilities that are not determined from other sources.

Past results help form the basis of our judgments about the carrying value of assets and liabilities that cannot be determined from other sources.

Actual results could differ from these estimates.

These estimates, judgments and assumptions are most critical with respect to our accounting for revenue recognition, inventory, intangible assets and goodwill, research and development accounting, contingent consideration liability, provision for income taxes and share-based payments.

The Company’s most significant estimates include:

(1) its allowances for chargebacks and accruals for rebates and product returns, (2) the allowances for obsolescent or unmarketable inventory, (3) valuation of contingent consideration liabilities associated with business combinations and (4) valuation of continuing utility of intangible assets.

Revenue Recognition

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Other revenue was approximately 5.2% percent of net revenues in 2023 and 3.2% in 2022.

Our financial statements reflect accounts receivable allowances of $0.6 million and $0.3 million at December 31, 2022 and 2021, respectively, for chargebacks and early pay discounts for products.

Our financial statements reflect accounts receivable allowances of $0.6 million at December 31, 2023 and 2022, for chargebacks and early pay discounts for products.

The following table reflects our sales-related accrual activity for the periods indicated below:

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If the actual amount of cash discounts, chargebacks, rebates, and product returns differs from the amounts estimated by management, material differences may result from the amount of our revenue recognized from product sales.

A change in our rebate estimate of one percentage point would have impacted net sales by approximately $0.6 million and $0.4 million for the year ended December 31, 2022 and 2021, respectively.

A change in our rebate estimate of one percentage point would have impacted net sales by approximately $0.6 million for the years ended December 31, 2023 and 2022.

A change in our product return estimate of one percentage point would have impacted net sales by $0.4 million for the years ended December 31, 2023 and 2022.

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The estimated inventory obsolescence amounts are calculated based upon specific review of the inventory expiration dates and the quantity on-hand at December 31, 2023, in comparison to our expected inventory usage.

The amount of actual inventory obsolescence and unmarketable inventory could differ

(either higher or lower) in the near term from the estimated amounts.

The amount of actual inventory obsolescence and unmarketable inventory could differ (either higher or lower) in the near term from the estimated amounts.

Changes in our estimates would be recorded in our statement of operations in the period of the change.

Non-current inventories consist of API which typically has an extended life and selected finished good products with extended life longer than one year.

Non-current inventories consist of active pharmaceutical ingredients which typically has an extended life and selected finished good products with extended life longer than one year.

We provide for deferred taxes using the asset and liability approach.

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General and administrative 10,651,915 10,180,120 471,795

Amortization 5,067,368 4,371,300 696,068

Amortization and impairment 8,102,648 5,067,368 3,035,280

Total costs and expenses 49,107,168 47,715,878 1,391,290

Operating income (loss) (5,704,929) (7,677,420) 1,972,491

Operating loss (9,554,661) (5,704,929) (3,849,732)

Interest income 286,854 98,405 188,449

Other income - gain on insurance proceeds 611,330 — 611,330

Other income 2,828,871 — 2,828,871

Other income - settlement 475,000 — 475,000

Other income - insurance proceeds 346,800 611,330 (264,530)

Interest expense (667,861) (585,995) (81,866)

Income (loss) before income taxes (5,581,189) (5,562,230) (18,959)

Loss before income taxes (6,284,997) (5,581,189) (703,808)

Income tax (expense) benefit (45,769) (68,850) 23,081

Net income (loss) from continuing operations $ (5,650,039) $ (5,597,121) $ (52,918)

Net loss $ (6,330,766) $ (5,650,039) $ (680,727)

The following table summarizes net revenues for the years presented:

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Kristalose $ 15,981,850 $ 15,205,155 $ 776,695

Sancuso 13,205,603 — 13,205,603

Vibativ 8,812,692 7,487,462 1,325,230

Sancuso 8,096,788 13,205,603 (5,108,815)

Caldolor 4,333,923 4,827,200 (493,277)

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Net revenues.

Net revenues for the year ended December 31, 2022, were approximately $42.0 million compared to $36.0 million for the year ended December 31, 2021, representing an increase of $6.0 million or 16.7%.

Net revenue increased during the 2022 period as a result of our newest product Sancuso which contributed net revenue of $13.2 million.

This increase was offset by decreased net sales of Vibativ and Vaprisol.

Kristalose revenue declined by $0.8 million, or (4.9)%, compared to December 31, 2021, primarily as a result of timing of sales of our shipments to one of our co-promotion partners.

Vibativ revenue was $7.5 million compared to $11.7 million in the prior year.

This $4.2 million decline in net revenue was a result higher sales volume for the product in 2021 associated in part with wholesale stocking of our new packaged product.

Caldolor revenue experienced a 2.9% decrease to $4.8 million during the year ended December 31, 2022, compared to $5.0 million in the same period last year.

Net revenues for the year ended December 31, 2023, were approximately $39.6 million compared to $42.0 million for the year ended December 31, 2022.

As detailed in the table above, net revenue increased during 2023 for two of our marketed products:

Kristalose and Vibativ.

These increases were mainly offset by decreased net product sales of Sancuso and Caldolor.

Kristalose revenue increased by $0.8 million, or 5.1%, compared to December 31, 2022, primarily as a result of increased shipments of the product.

Vibativ revenue increased to $8.8 million for the year ended December 31, 2023, compared to $7.5 million in the same prior year period.

The increase of $1.3 million, or 17.7%, reflected fewer product returns in the current year.

Sancuso revenue was $8.1 million compared to $13.2 million in the prior year.

This decrease in net revenue was primarily a result of an inordinate amount of product returns and higher commercial rebates.

Caldolor revenue was $4.3 million during the year ended December 31, 2023, compared to $4.8 million in the same period last year.

This decrease in Caldolor revenue for the year ended December 31, 2023, w as the result of the timing of international shipments.

Vaprisol revenue decreased $2.3 million during the year ended December 31, 2022, compared to the prior year period due primarily to a temporary out of stock situation associated with a change in manufacturers.

There was no Vaprisol revenue for the year ended December 31, 2023, as Cumberland is currently out of commercial inventory of the product.

Net revenue was positively impacted by various sales deduction adjustments.

Acetadote revenue included net sales of our branded product and our share of net sales from our Authorized Generic.

For the year ended December 31, 2022, the Acetadote net revenue decreased $0.3 million compared to the prior year due to an increase in expired product returns in 2022.

Omeclamox-Pak revenue increased $0.4 million during the year ended December 31, 2022, compared to the prior year.

The increase was due to favorable sales adjustments and ownership changes at our packager which resulted in a temporary out of stock situation.

For the year ended December 31, 2023, the Acetadote net revenue was $0.5 million, similar to the prior year period.

Omeclamox-Pak had no sales for the year ended December 31, 2023, as Cumberland is currently out of commercial inventory of this product.

The packager for our Omeclamox-Pak product encountered financial difficulties and currently is under new management and is reorganizing.

Reditrex revenue decreased $0.2 million in 2023 compared to 2022.

Our 2022 gross wholesale revenue increased by $0.4 million, but the revenue growth was offset by expired product returns.

We discontinued sale of the product in 2023.

Other Revenue.

Other revenue increased due to the litigation settlement based on two $500,000 milestone payments due to us for the license associated with our Vibativ product.

Cost of products sold .

Cost of products sold for the year ended December 31, 2022, were $9.1 million compared to $8.8 million in the prior year.

As a percentage of net revenues, cost of products sold were 21.7% compared to 24.5% during the prior year.

This change in costs of products sold as a percentage of revenue was attributable to a change in the product sales mix, particularly the addition of our Sancuso sales.

Cost of products sold for the year ended December 31, 2023, were $6.1 million compared to $9.1 million in the prior year, a decrease of $3.1 million.

These cost savings were due to the availability of lower cost inventory and fewer inventory write downs.

Selling and marketing .

Selling and marketing expense for the year ended December 31, 2023, were $18.5 million compared to $16.7 million in the prior year, which was an increase of $1.8 million.

This increase was primarily a result of an increase in marketing expenses associated with the Sancuso acquisition including royalty costs, promotional spending and the cost associated with our new Oncology division.

Research and development .

Research and development costs for the year ended December 31, 2022, were $6.7 million, compared to $5.7 million last year, representing an increase of $1.0 million.

Research and development costs for the year ended December 31, 2023, were $5.8 million, compared to $6.7 million last year, representing a decrease of $0.9 million due to reduced FDA fees.

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.

We continue to fund our ongoing clinical initiatives associated with our pipeline products.

During 2022, we also experienced an increase in our annual FDA user fees.

General and administrative .

General and administrative expenses for the year ended December 31, 2023, were $10.7 million compared to $10.2 million in the prior year.

The change resulted from an increase in insurance expenses.

The change resulted from an increase in hiring costs and deferred compensation expenses.

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

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Vibativ contribution $ 6,009,354 $ 4,018,466

(1) 2022 net revenue includes a $150,000 payment to Cumberland required under the terms of a new licensee agreement.

(1) 2023 net revenue includes a $1,000,000 payment to Cumberland related to a settlement agreement of milestone payments.

(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.

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Net revenue $ 8,096,788 $ 13,555,603

$ 13,555,603 $ —

Cost of products sold (1)

1,214,826 1,543,600

Royalty and operating expenses 3,375,823 4,202,026

Sancuso contribution $ 3,506,139 $ 7,809,977

(1) 2022 net revenue includes a $250,000 payment to Cumberland required under the terms of a new licensee agreement and a $100,000 payment to Cumberland required under a sales representation agreement.

(1) The Sancuso 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 2022.

Amortization.

Amortization expenses represent the ratable use of our capitalized intangible assets including product and license rights, patents, trademarks and patent defense costs.

Amortization for 2022 totaled approximately $5.1 million which is an increase of $0.7 million due to the addition of Sancuso.

Amortization and impairment.

Amortization and impairment expenses represent the ratable use of our capitalized intangible assets including product and license rights, patents, trademarks and patent defense costs.

Amortization and impairment for 2023 totaled approximately $8.1 million which is an increase of $3.0 million due to a $3.3 million write down of our Omeclamox intangible assets.

Income taxes .

Income taxes totaled $45,769 for the year ended December 31, 2023, and $68,850 for the year ended December 31, 2022.

Other income.

In 2023, we recognized a $2.8 million refund of FDA fees for the periods of 2023 and 2022 to be used to further our product research efforts.

In addition, in 2023 we recognized a gain of $0.5 million to settle a manufacturing dispute and a gain of $0.3 million for a payout earned on a company owned insurance policy.

LIQUIDITY AND CAPITAL RESOURCES

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Financing activities (7,424,472) (2,061,786)

Net (decrease) increase in cash and

Net decrease in cash and

cash equivalents

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The net $1.4 million decrease in cash and cash equivalents for the year ended December 31, 2023, was attributable to cash provided by operating activities offset by cash used in investing and financing activities.

Cash provided by operating activities of $6.1 million is primarily due to an increase in accounts payable and other accrued liabilities of $3.7 million, and a $3.4 million decrease in accounts receivable, partially offset by a decrease in non-cash contingent consideration of $1.3 million.

Cash used in investing activities of $0.1 million was the result of additions of intangibles and property and equipment offset by life insurance proceeds received.

Our financing activities included payments of $3.3 million of contingent consideration for Vibativ and Sancuso, a pay down on our line of credit of $3.4 and $0.7 million in cash used to repurchase shares of our common stock.

As noted above, we continue to repurchase shares of our common stock, as discussed in Part II, Item 5, "Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities", of this Form 10-K.

The net $7.3 million decrease in cash and cash equivalents for the year ended December 31, 2022, was attributable to cash provided by operating activities offset by cash used in investing and financing activities.

Cash provided by operating activities of $8.5 million includes a decrease of inventory of $0.9 million, most of which was Vibativ and Sancuso related, an increase in accounts payable and other accrued liabilities of $14.5 million, partially offset by a $6.1 million increase in accounts receivable and a decrease in non-cash contingent consideration of $2.1 million.

Cash used in investing activities of $13.7 million was the result of the acquisition of Sancuso of $13.5 million, additions to intangibles of $2.0 million, additions to property and equipment of $0.1 million and the proceeds of officer life insurance proceeds of $0.9 million.

Cash used in investing activities of $13.7 million was the result of the acquisition of Sancuso of $13.5

million, additions to intangibles of $2.0 million, additions to property and equipment of $0.1 million and the proceeds of officer life insurance proceeds of $0.9 million.

Our financing activities included payments of $2.2 million of contingent consideration for Vibativ and Sancuso and $1.1 million in cash used to repurchase shares of our common stock.

The net $2.3 million increase in cash and cash equivalents for the year ended December 31, 2021, was attributable to cash provided by operating activities partially offset by cash used in investing and financing activities.

Cash provided by operating activities of $6.3 million includes a reduction of inventory of $4.8 million, most of which was Vibativ related, and cash payments received of $2.0 million provided by discontinued operations.

Cash used in investing activities of $0.5 million was the result of additions to intangibles of $0.3 million, additions to property and equipment of $0.1 million and the payment of $0.2 million to the WHC joint venture.

Our financing activities included payments of $2.2 million of contingent consideration for Vibativ and $1.4 million in cash used to repurchase shares of our common stock.

Shelf Registration

In November 2017, the Company filed its Shelf Registration on Form S-3 with the SEC associated with the sale of up to $100 million in corporate securities.

The Shelf Registration was declared effective in January 2018.

It also included an At the Market ("ATM") feature that allows the Company to sell common shares at market prices, along with an agreement with B.

Riley FBR Inc.

to support such a placement of shares.

The Company filed an updated Form S-3 with the SEC in December 2020, which was declared effective in January 2021.

On December 27, 2021, the Company filed a related prospectus supplement in connection with the sale and issuance of shares having an aggregate gross sales price of up to $19 million.

The Company amended the At the Market Sales Agreement on December 27, 2021, in order to allow the Company to continue using its ATM feature to sell shares at market prices.

The Company intends to continue an ATM feature through B.

Riley FBR, Inc.

which allows the Company to issue shares of its common stock.

The Company did not issue any shares under this ATM during the year ended December 31, 2022.

In December 2023, the Company filed a Shelf Registration on Form S-3 with the SEC associated with the sale of up to $100 million in corporate securities which also was declared effective in December 2023.

The Company intends to enter into an At the Market Sales Agreement in March 2024, in order to allow the Company to sell shares at market prices.

The Company did not issue any shares under its ATM program during the year ended December 31, 2023.

Debt Agreement

On September 29, 2022, the Company entered into the Ninth Amendment to the Revolving Credit Loan Agreement with Pinnacle Bank (as amended, the "Pinnacle Agreement") to update the Funded Debt Ratio to mean the ratio of (i) Funded Debt less the amount of Unrestricted Cash in excess of $8,500,000, to (ii) EBITDA, as determined at the end of each fiscal quarter on a rolling four (4) quarter basis.

For the year ended December 31, 2022, we were in compliance with the Funded Debt Ratio financial covenant.

On June 30, 2022, the Company entered into the Eighth Amendment to the Revolving Credit Loan Agreement with Pinnacle Bank permitting the Maximum Funded Debt Ratio to be calculated on a rolling four-quarter basis to be no more than 3.00 to 1.00 for the second and third quarters of 2022 and 2.50 to 1.00 for each quarter thereafter.

On March 31, 2022, the Company and Pinnacle Bank entered into a Seventh Amendment to the Revolving Credit Loan Agreement to revise and update the Maximum Funded Debt Ratio financial covenant and to delete from the Pinnacle Agreement the Funded Debt to Tangible Capital Ratio financial covenant.

These changes were made to more appropriately reflect the impact from the Sancuso acquisition.

On December 31, 2021, the Company and Pinnacle Bank entered into the Fifth Amendment to the Revolving Credit Note and the Sixth Amendment to the Revolving Credit Loan Agreement in order to increase the principal amount of the Note from $15 million to $20 million.

On October 28, 2021, the Company entered into a Fourth Amendment to the Revolving Credit Note and Fifth Amendment to Revolving Credit Loan Agreement with Pinnacle Bank.

Among other terms, the Fourth Amendment extended the maturity date to October 1, 2024.

Paycheck Protection Program

On April 20, 2020, Cumberland received the funding of a loan from Pinnacle Bank in the aggregate amount of $2,187,140 pursuant to the Paycheck Protection Program (the “PPP”) under the Federal Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which was enacted March 27, 2020.

Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act, including qualifying payroll costs, covered rent payments, and covered utilities.

From the date of funding, we have used the loan amount for such qualifying expenses.

Due to the assistance from our PPP loan, the Company did not lay off or furlough any employees as a result of the Covid-19 pandemic.

Cumberland elected to account for the proceeds of the loan as a government grant under International Accounting Standard 20 ("IAS 20"), Accounting for Government Grants and Disclosure of Government Assistance.

The permitted analogous use of IAS 20 outlines a model for the accounting for government assistance, including forgivable loans.

In October 2020, Cumberland submitted a request for the loan’s forgiveness.

On June 11, 2021, the Company received a formal notice from the SBA that the full amount of the loan was forgiven.

The Company accounted for the forgiveness of the PPP loan under IAS 20 and recorded the $2,187,140 as other income.

On September 5, 2023, the Company entered into a new Revolving Credit Loan Agreement with Pinnacle Bank.

This facility provides for an aggregate principal funding amount of up to $25 million.

The initial revolving line of credit is up to $20 million, with the ability for Cumberland to increase the amount to $25 million, under certain conditions.

It has a three year term expiring on October 1, 2026.

The interest rate is based on Benchmark (Term SOFR) plus a spread of 2.75%.

Cumberland is subject to one financial covenant, the maintenance of a Funded Debt Ratio, determined on a quarterly basis.

Borrowings under the line of credit are collateralized by substantially all of our assets.

Minimum Product Purchase Requirements

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The contingent consideration liability represents the fair value of the royalty payments of up to 10% of future net sales as part of the Sancuso acquisition.

The Broadwest contractual cash obligation began upon commencement in October 2022.

The Broadwest contractual cash obligation began upon commencement in October 2022 and CET began May 2023.

OFF-BALANCE SHEET ARRANGEMENTS

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RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements - Not Yet Adopted

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No.

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Companies will have to disclose additional information, including information they use to track credit quality by year of origination for most financing receivables.

Companies will apply the ASU’s provisions as a cumulative-effect adjustment, if any, to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

Companies will apply the ASU’s provisions as a cumulative-effect adjustment, if any, to accumulated deficit as of the beginning of the first reporting period in which the guidance is adopted.

Related to ASU No.

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We adopted both ASU 2016-13 and ASU 2019-05 on January 1, 2023.

The adoption of ASU 2016-13 and ASU 2019-05 are not expected to have a material impact on the Company’s consolidated financial statements.

The adoption of ASU 2016-13 and ASU 2019-05 did not have a material impact on the Company’s consolidated financial statements.

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-K

Item 7. Management’s Discussion and Analysis