What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 99 added, 86 removed, 358 unchanged (34% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

24 unchanged sentences

100,000,000 shares authorized;

14,159,954 and 14,121,833 shares issued and outstanding as of March 31, 2024 and December 31, 2023 , respectively

14,083,183 and 14,121,833 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

46,869,026 47,091,602

8 unchanged sentences

Condensed Consolidated Statements of Operations

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net revenues $ 9,848,849 $ 10,888,877 $ 18,346,550 $ 20,113,515

6 unchanged sentences

Total costs and expenses 10,875,537 10,866,018 21,242,488 21,622,334

Operating loss ( 1,869,250 ) ( 1,531,678 )

Operating income (loss) ( 1,026,688 ) 22,859 ( 2,895,938 ) ( 1,508,819 )

Interest income 61,841 57,061 158,587 107,251

4 unchanged sentences

Net income (loss) ( 1,102,637 ) 862,154 ( 3,005,109 ) 1,034,440

Net (income) loss at subsidiary attributable to noncontrolling interests ( 43,791 ) 19,898

Net loss (income) at subsidiary attributable to noncontrolling interests 17,025 10,046 ( 26,766 ) 29,944

Net income (loss) attributable to common shareholders $ ( 1,085,612 ) $ 872,200 $ ( 3,031,875 ) $ 1,064,384

9 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

Net income (loss) $ ( 3,005,109 ) $ 1,034,440

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense 2,290,130 2,456,590

4 unchanged sentences

Increase in noncash interest expense 8,654 7,809

Gain on receivable of FDA fees — ( 1,847,065 )

Net changes in assets and liabilities affecting operating activities:

5 unchanged sentences

Other long-term liabilities 85,404 ( 630,813 )

Net cash used in operating activities ( 2,136,647 ) ( 1,418,209 )

Net cash provided by (used in) operating activities ( 2,992,307 ) 3,817,152

Cash flows from investing activities:

8 unchanged sentences

Net cash provided by (used in) financing activities 2,112,119 ( 5,054,775 )

Net increase (decrease) in cash and cash equivalents 226,861 ( 3,371,804 )

Net decrease in cash and cash equivalents ( 985,178 ) ( 1,508,884 )

Cash and cash equivalents at beginning of period $ 18,321,624 $ 19,757,970

11 unchanged sentences

Balance, March 31, 2023 14,430,047 $ 47,377,168 $ ( 11,016,657 ) $ ( 312,024 ) $ 36,048,487

Balance, March 31, 2023 14,430,047 47,377,168 ( 11,016,657 ) ( 312,024 ) 36,048,487

Share-based compensation — 97,877 — — 97,877

Repurchase of common shares ( 99,057 ) ( 171,616 ) — — ( 171,616 )

Net income (loss) — — 872,200 ( 10,046 ) 862,154

Balance, June 30, 2023 14,330,990 14330990 $ 47,303,429 $ ( 10,144,457 ) $ ( 322,070 ) $ 36,836,902

Common stock Accumulated deficit Noncontrolling interests Total equity

5 unchanged sentences

Balance, March 31, 2024 14,159,954 $ 46,923,757 $ ( 19,434,424 ) $ ( 299,781 ) $ 27,189,552

Share-based compensation — 71,958 — — 71,958

Repurchase of common shares ( 76,771 ) ( 126,689 ) — — ( 126,689 )

Net loss — — ( 1,085,612 ) ( 17,025 ) ( 1,102,637 )

Balance, June 30, 2024 14,083,183 $ 46,869,026 $ ( 20,520,036 ) $ ( 316,806 ) $ 26,032,184

See accompanying Notes to Condensed Consolidated Financial Statements.

6 unchanged sentences

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

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

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, oncology and field sales forces in the United States.

We have also established international partnerships and are continuing to build a network of companies outside the U.S.

to register and provide our medicines to patients in their countries.

Cumberland’s growth strategy involves maximizing the success of our existing brands, while continuing to add differentiated products.

We have built our portfolio of FDA approved products through both development and acquisition.

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

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

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

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

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

Cumberland’s growth strategy involves maximizing the potential of our existing brands, while continuing to build a portfolio of differentiated products.

We currently own six products approved by the FDA in the United States.

We are also continuing to build 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.

The Company’s products are manufactured by third parties, which are overseen by our quality control and manufacturing professionals.

4 unchanged sentences

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the " 2023 Annual Report on Form 10-K " ).

The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the entire fiscal year or any future period.

The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the entire fiscal year or any future period.

Recent Accounting Guidance

62 unchanged sentences

(2) EARNINGS (LOSS) PER SHARE

The following table reconciles the numerator and denominator used to calculate basic and diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023:

Three months ended March 31,

Net loss attributable to common shareholders $ ( 1,946,263 ) $ 192,184

The following table reconciles the numerator and denominator used to calculate basic and diluted earnings (loss) per share for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30,

Net income (loss) attributable to common shareholders $ ( 1,085,612 ) $ 872,200

Weighted-average shares outstanding – basic 14,118,091 14,393,711

1 unchanged sentence

Weighted-average shares outstanding – diluted 14,118,091 14,554,264

As of March 31, 2024 and 2023, restricted stock awards and options to purchase 496,859 and 331,338 shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive.

Six months ended June 30,

Net income (loss) attributable to common shareholders $ ( 3,031,875 ) $ 1,064,384

Weighted-average shares outstanding – basic 14,107,852 14,376,260

Dilutive effect of other securities — 194,538

Weighted-average shares outstanding – diluted 14,107,852 14,570,798

As of June 30, 2024 and 2023, restricted stock awards and options to purchase 576,517 and 413,074 shares of common stock, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive.

Product Revenues

The Company accounts for revenues from contracts with customers under ASC 606.

The Company’s net revenues consisted of the following for the three months ended March 31, 2024 and 2023:

Three months ended March 31,

The Company’s net revenues consisted of the following for the three and six months ended June 30, 2024 and 2023:

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Kristalose $ 4,107,834 $ 4,110,718 $ 7,303,444 $ 8,425,846

8 unchanged sentences

Total net revenues $ 9,848,849 $ 10,888,877 $ 18,346,550 $ 20,113,515

There was no Omeclamox-Pak net revenue for the first quarter of 2024 due to our lack of commercial inventory of this product.

There was no Omeclamox-Pak net revenue for the second quarter of 2024 due to our lack of commercial inventory of this product.

The packager for our Omeclamox-Pak product encountered financial difficulties due to the impact of COVID-19.

As we have not been able to identify an alternative site to package the product, we decided to discontinue the sales of Omeclamox-Pak and expense the remaining brand intangible assets in late 2023.

For the three months ended March 31, 2024 and 2023, the amounts noted resulted from normal adjustments by channel partners.

With regard to Vaprisol, we are in the process of transitioning to a new manufacturer, who was issued a U.S.

For the three and six months ended June 30, 2024, the amounts noted resulted from normal distribution adjustments.

With regard to Vaprisol, we are in the process of transitioning to a new manufacturing partner, who was issued a U.S.

Food and Drug Administration ("FDA") Form 483 in the second quarter of 2022.

Once these FDA Form 483 related issues are satisfactorily resolved by the manufacturer, we will then resubmit our application for their facility to the FDA for approval.

Once these FDA Form 483 related issues are satisfactorily resolved, we will then resubmit our application for their facility to the FDA for approval.

Meanwhile, we have been working with them to support a special, interim supply of compounded product for critically ill patients, which they introduced to the market in late 2023.

For the three months ended March 31, 2024, the amounts reflected our share of sales of the compounded product.

For the three months ended March 31, 2023, net revenue was impacted by product return and accrual adjustments.

Based on an amendment to the agreement between the Company and Nordic Group B.V.

("Nordic"), effective June 30, 2023, the Company returned all rights of RediTrex back to Nordic and the Company will receive a long-term royalty on any Nordic sales of the product in the future.

For the three months ended March 31, 2024 and 2023, the revenue amounts represented normal adjustments by channel partners and accrual adjustments.

For the three and six months ended June 30, 2024, the amounts reflected our share of sales of the compounded product and normal sales deduction adjustments.

For the three and six months ended June 30, 2023, net revenue was impacted by normal accrual adjustments.

Effective June 30, 2023, the Company returned all rights of RediTrex back and will receive a long-term royalty on any sales of the product in the future.

For the three and six months ended June 30, 2024 and 2023, the revenue amounts represented normal distribution and accrual adjustments.

Other Revenues

1 unchanged sentence

Those agreements provide that each of the partners is responsible for seeking regulatory approvals for the product, and following approval, each partner will be responsible for the ongoing distribution and sales in the respective international territories.

The Company provides a dossier for product registration and maintains responsibility for the relevant intellectual property.

Cumberland is typically entitled to receive a non-refundable, up-front payment at the time each agreement is executed as consideration for the product dossier and for the rights to the distinct intellectual property rights in the respective international territory.

2 unchanged sentences

The contractual payments associated with the partner’s achievement of regulatory approvals, sales milestones and royalties on future sales are recognized as revenue upon occurrence, or at such time that the Company has a high degree of confidence that the revenue would not be reversed in a subsequent period.

Other revenues include funding from federal grant programs including those secured from the FDA and from those secured by Cumberland Emerging Technologies Inc.

("CET") through the Small Business Administration.

Grant revenue from these federal grant programs totaled approximately $ 0.1 million for the three months ended March 31, 2024 and 2023.

Other revenues also include lease income generated by CET’s Life Sciences Center.

It is a research facility that provides scientists with access to flexible lab space and other resources to develop biomedical products.

This lease income, as noted in Footnote 5 - Leases, was approximately $ 0.2 million and $ 0.1 million for the three months ended March 31, 2024 and 2023, respectively .

Other revenues include funding from federal grant programs including those provided by the FDA and from those secured by Cumberland Emerging Technologies Inc.

("CET") through the Small Business Administration's Small Business Innovation Research and Small Business Technology Transfer ("SBIR/STTR") programs.

Grant revenue from these federal grant programs totaled approximately $ 0.1 million for the six months ended June 30, 2024 and 2023.

Other revenues also include lease income generated by CET’s Life Sciences Center which is a research facility that provides scientists with access to flexible lab space and other resources to develop biomedical products.

This lease income, as noted in Footnote 5 - Leases, was approximately $ 0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0.3 million and $ 0.2 million for the six months ended June 30, 2024 and 2023, respectively.

(4) INVENTORIES

5 unchanged sentences

When evidence indicates that the carrying value may not be recoverable, a charge is taken to reduce the inventory to its current net realizable value.

At March 31, 2024 and December 31, 2023, there were no cumulative obsolescence and discontinuance losses necessary.

At June 30, 2024, the Company had recognized and maintained cumulative net realizable value charges for potential obsolescence and discontinuance losses of approximately $ 0.02 million.

At December 31, 2023, there were no cumulative obsolescence and discontinuance losses necessary.

The Company purchases the active pharmaceutical ingredient ("API") for Kristalose and maintains the inventory of that raw material.

3 unchanged sentences

Consigned inventory represents Authorized Generic inventory stored with our partner until shipment to their customers.

At March 31, 2024 and December 31, 2023, the Company's net inventories consisted of the following:

March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the Company's net inventories consisted of the following:

June 30, 2024 December 31, 2023

Raw materials and work in process $ 12,684,573 $ 12,619,092

4 unchanged sentences

Total inventories classified as current $ 4,302,159 $ 4,609,362

At March 31, 2024 and December 31, 2023, the Company's non-current inventories consisted of the following:

March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the Company's non-current inventories consisted of the following:

June 30, 2024 December 31, 2023

Vibativ Raw Materials $ 6,781,071 $ 6,611,426

Kristalose Raw Materials 2,840,114 3,263,516

Vaprisol Conivaptan Raw Materials 1,173,442 1,170,641

Vaprisol Raw Materials 1,173,442 1,170,641

Sancuso Raw Materials 536,237 574,502

1 unchanged sentence

Acetadote Raw Materials 13,474 33,678

Study Drug Ifetroban Raw Materials 203,383 203,383

Ifetroban Raw Materials 203,383 203,383

Vibativ Finished Goods 92,734 810,454

Caldolor Finished Goods 98,268 67,307

Acetadote Finished Goods 28,653 —

Omeclamox 69,622 69,622

Total inventories classified as non-current $ 11,868,487 $ 12,804,529

On November 15, 2021, Cumberland entered into a lease (the "Lease"), pursuant to which the Company leases approximately 16,903 rentable square feet of space (the "Leased Premise") at Broadwest located in Nashville, Tennessee with 1600 West End Avenue Partners, LLC (the "Landlord").

The Leased Premise serves as the Company's new corporate headquarters.

The initial term of the Lease is one hundred fifty-seven ( 157 ) months, with two consecutive options to renew for a period of five years each, with the commencement date of October 25, 2022.

On November 15, 2021, Cumberland entered into a lease (the "Lease"), pursuant to which the Company leases approximately 16,903 rentable square feet of space (the "Leased Premise") at the Broadwest office campus located in Nashville, Tennessee with 1600 West End Avenue Partners, LLC (the "Landlord").

The Leased Premise serves as the Company's corporate headquarters.

The initial term of the Lease is one hundred fifty-seven ( 157 ) months, with two consecutive options to renew for a period of 5 years each, with the commencement date of October 25, 2022.

This lease currently expires in November 2035.

2 unchanged sentences

In addition to the monthly base rent, the Company is responsible for its percentage share of the operating expenses of the building.

The lease also provided for a tenant improvement allowance which we used to build out the space.

On October 24, 2022, the CET lease with The Gateway to Nashville, LLC provided the notice of exercise to extend the lease for five years .

The lease also provided for a tenant improvement allowance which was used to build out the space.

On October 24, 2022, CET provided the notice of exercise to extend the lease with The Gateway to Nashville, LLC for 5 years.

The lease is for approximately 14,200 square feet of wet laboratory and office space in Nashville, Tennessee where CET operates the CET Life Sciences Center.

3 unchanged sentences

These expenditures are classified as an embedded lease resulting in a right-of-use asset to be amortized over the life of the Nephron contract.

As of March 31, 2024, the value of this lease was $ 0.9 million.

As of June 30, 2024, the right-of-use asset was $ 0.9 million.

Operating lease liabilities were recorded as the present value of remaining lease payments not yet paid for the lease term discounted using the incremental borrowing rate associated with each lease.

2 unchanged sentences

Incremental borrowing rates reflect the Company’s estimated interest rates for collateralized borrowings over similar lease terms.

The weighted-average remaining lease term for the Broadwest and Gateway leases is 10.2 years and 12.6 years at March 31, 2024 and March 31, 2023, respectively.

The weighted-average incremental borrowing rate used to discount the present value of the remaining lease payments is 9.40 % for the Broadwest lease and 9.24 % for the remaining CET lease.

The weighted-average remaining lease term for the Broadwest and Gateway leases is 10 and 10.9 years at June 30, 2024 and June 30, 2023, respectively.

The weighted-average incremental borrowing rate used to discount the present value of the remaining lease payments for both leases is 9.39 % and 9.40 % at June 30, 2024 and December 31, 2023, respectively.

Lease Position

At March 31, 2024 and December 31, 2023, the Company's lease assets and liabilities were as follows:

Right-of-Use Assets March 31, 2024 December 31, 2023

At June 30, 2024 and December 31, 2023, the Company's lease assets and liabilities were as follows:

Right-of-Use Assets June 30, 2024 December 31, 2023

Operating lease right-of-use assets $ 6,365,790 $ 6,674,394

Lease Liabilities March 31, 2024 December 31, 2023

Lease Liabilities June 30, 2024 December 31, 2023

Operating lease current liabilities $ 376,780 $ 348,092

1 unchanged sentence

Total $ 5,477,040 $ 5,644,339

As of March 31, 2024, cumulative future minimum sublease income under non-cancelable operating subleases totals approximately $ 0.2 million which includes the 90-day notice required for lease termination.

As of June 30, 2024, cumulative future minimum sublease income under non-cancelable operating subleases totals approximately $ 0.2 million which includes the 90-day notice required for lease termination.

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows:

Maturity of Lease Liabilities at March 31, 2024

Maturity of Lease Liabilities at June 30, 2024

Operating Leases

4 unchanged sentences

Rent expense and sublease income were as follows:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Rent expense $ 344,418 $ 226,772 $ 699,482 $ 501,029

4 unchanged sentences

In January 2019, the Company's Board of Directors established the current $ 10 million repurchase program to replace the prior authorizations.

During the three months ended March 31, 2024 and March 31, 2023, the Company repurchased 125,870 shares and 86,829 shares of common stock for approximately $ 0.2 million, respectively.

At March 31, 2024, there remains approximately $ 2.8 million available under the current repurchase program for common share repurchases.

During the six months ended June 30, 2024 and June 30, 2023, the Company repurchased 202,641 shares and 185,886 shares of common stock for approximately $ 0.4 million for each period.

At June 30, 2024, there remains approximately $ 2.6 million available under the current repurchase program for common share repurchases.

Share purchases and sales

1 unchanged sentence

These purchases are designed to increase ownership in the Company by the members of the Board.

As of March 31, 2024, there were no shares purchased through these trading plans as the purchases will begin in June 2024.

The plans became effective on June 13, 2024, and as of June 30, 2024, a total of 3,529 shares have been purchased through these trading plans.

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

7 unchanged sentences

Wainwright & Co., LLC, that would allow the Company to issue shares of its common stock.

The Company did not issue any shares under an ATM during the three months ended March 31, 2024.

The Company did not issue any shares under an ATM during the six months ended June 30, 2024.

Restricted Share Grants and Incentive Stock Options

During the three months ended March 31, 2024 and March 31, 2023, the Company issued 50,500 shares and 28,250 shares of restricted stock, respectively, to employees, advisors and directors.

During the six months ended June 30, 2024 and June 30, 2023, the Company issued 50,500 shares and 34,250 shares of restricted stock, respectively, to employees, advisors and directors.

Restricted stock issued to employees and advisors generally cliff-vests on the fourth anniversary of the date of grant and for directors on the one-year anniversary of the date of grant.

During the three months ended March 31, 2024 and 2023, the Company also issued 187,600 and 183,250 incentive stock options, respectively, to employees that cliff-vest on the fourth anniversary of the date of grant, and are largely set to expire in 2034 and 2033, respectively.

During the six months ended June 30, 2024 and June 30, 2023, the Company also issued 189,250 and 184,500 incentive stock options, respectively, to employees that cliff-vest on the fourth anniversary of the date of grant, and are largely set to expire in 2034 and 2033, respectively.

Stock compensation expense is presented as a component of general and administrative expense in the condensed consolidated statements of operations as it relates to these restricted share grants and options.

For the three months ended March 31, 2024, we recorded a credit of $ 0.01 million to stock compensation expense related to the forfeiture of unvested restricted stock awards and incentive stock options.

For the six months ended June 30, 2024, we recorded a credit of $ 0.02 million to stock compensation expense related to the forfeiture of unvested restricted stock awards and incentive stock options.

Debt Agreement

2 unchanged sentences

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.

It has a 3-year term expiring on October 1, 2026.

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

1 unchanged sentence

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

On May 6, 2024, the Company entered into a First Amendment to the Loan Agreement which provides an alternative to the financial covenant by delivering to the lender a borrowing base certificate and complying with certain borrowing base requirements which set forth a maximum revolver amount equal to (a) up to $ 20 million or (b) the sum of the Company's cash balances and eligible accounts receivable.

As of March 31, 2024 and December 31, 2023, the Company had $ 16.1 million and $ 12.8 million, respectively, in borrowings outstanding under its revolving credit facility.

The applicable interest rate under the Pinnacle Agreement was 8.125 % at March 31, 2024.

On May 6, 2024, the Company entered into a First Amendment to the Loan Agreement which provides an alternative to the financial covenant by delivering to the lender a borrowing base certificate and complying with certain borrowing base requirements which set forth a maximum revolver amount equal to the lessor of (a) up to $ 20 million or (b) the sum of the Company's cash balances and eligible accounts receivable.

As of June 30, 2024 and December 31, 2023, the Company had $ 16.1 million and $ 12.8 million, respectively, in borrowings outstanding under its revolving credit facility.

The applicable interest rate under the Pinnacle Agreement was 8.125 % at June 30, 2024.

Joint Venture Agreement

In August 2020, Cumberland entered into an agreement with WinHealth Investment (Singapore) Ltd creating WHC Biopharmaceuticals, Pte.

The joint venture, as a limited liability company, will focus on acquiring, developing, registering, and commercializing development stage and commercial stage biopharmaceuticals for China, Hong Kong and other Asian markets.

The agreement provides for initial investment from WinHealth in the form of a $ 0.2 million equity contribution and an initial investment from Cumberland in the form of a $ 0.2 million convertible note, which was funded during the first quarter of 2021.

The joint venture, as a limited liability company, will focuses on acquiring, developing, registering, and commercializing development stage and commercial stage biopharmaceuticals for China, Hong Kong and other Asian markets.

The agreement provided for initial investment from WinHealth in the form of a $ 0.2 million equity contribution and an initial investment from Cumberland in the form of a $ 0.2 million convertible note, which was funded during the first quarter of 2021.

The joint venture will seek additional future capital from additional investors and has entered into exclusive option agreements to license product candidates from both Cumberland Pharmaceuticals Inc.

1 unchanged sentence

(7) INCOME TAXES

As of March 31, 2024, the Company has approximately $ 52.1 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.

As of June 30, 2024, the Company has approximately $ 52.1 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.

These have historically been used to significantly offset income tax obligations.

2 unchanged sentences

Cumberland is a party to several collaborative arrangements with research institutions to identify and pursue promising pharmaceutical product candidates.

The funding for these programs is primarily provided through Federal Small Business Administration (SBIR/STTR) and other grant awards.

The funding for these programs is primarily provided through SBIR/STTR programs and other grant awards.

The Company has determined that these collaborative agreements, with the exception of the collaborative payment discussed in Note 10, related to Vibativ and Sancuso contingent consideration payments, do not meet the criteria for accounting under ASC Topic 808, Collaborative Agreements .

22 unchanged sentences

Contingent consideration earned and accrued in operating expenses 219,143

Balance at March 31, 2024

The contingent consideration liability of $ 3.7 million was accounted for as $ 1.2 million of other current liabilities and $ 2.5 million of other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2024.

Balance at June 30, 2024

The contingent consideration liability of $ 3.9 million was accounted for as $ 1.4 million of other current liabilities and $ 2.5 million of other long-term liabilities on the condensed consolidated balance sheet as of June 30, 2024.

On January 3, 2022, Cumberland acquired the U.S.

20 unchanged sentences

As a result, the valuation is classified as Level 3 fair value measurement.

The acquisition was funded by cash and the Company's revolving credit facility.

The fair value for the assets and liabilities assumed were as follows:

prepaid expenses of $ 1.8 million, inventory of $ 2.6 million, goodwill of $ 0.03 million, intangible assets of $ 14.1 million, milestone payable of $ 1.7 million and contingent liability of $ 3.4 million.

The following table presents the changes in the fair value of the contingent consideration liability that is remeasured on a recurring basis.

3 unchanged sentences

Contingent consideration earned and accrued in operating expenses 401,655

Balance at March 31, 2024

Balance at June 30, 2024

The contingent consideration liability earned and accrued in operating expenses is paid to Kyowa Kirin quarterly.

The contingent consideration liability of $ 2.0 million was accounted for as $ 1.2 million of current liabilities and $ 0.8 million of other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2024.

On July 12, 2022, the Cumberland entered into an amendment to the agreement with Nordic Group B.V.("Nordic") returning all the U.S.

The contingent consideration liability of $ 1.9 million was accounted for as $ 1.2 million of current liabilities and $ 0.6 million of other long-term liabilities on the condensed consolidated balance sheet as of June 30, 2024.

On July 12, 2022, the Cumberland entered into an amendment to an agreement with Nordic Group B.V.("Nordic") returning all the U.S.

rights to RediTrex back to Nordic including the trademark and market authorization effective June 30, 2023.

1 unchanged sentence

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 1. Financial Statements