What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 80 added, 127 removed, 347 unchanged (37% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets:

25 unchanged sentences

100,000,000 shares authorized;

14,010,736 and 14,121,833 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

14,961,137 and 13,952,624 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

51,367,883 46,821,425

8 unchanged sentences

Condensed Consolidated Statements of Operations

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Net revenues $ 11,713,055 $ 8,497,701

6 unchanged sentences

Total costs and expenses 10,421,108 10,366,951

Operating loss ( 1,694,432 ) ( 1,866,603 ) ( 4,590,370 ) ( 3,375,422 )

Operating income (loss) 1,291,947 ( 1,869,250 )

Interest income 125,709 96,746

Other income — — — 2,828,871

Other income - settlement — 475,000 — 475,000

Other income - insurance proceeds 237,089 346,800 237,089 346,800

Interest expense ( 163,802 ) ( 118,526 )

Loss before income taxes ( 1,525,527 ) ( 1,056,281 ) ( 4,507,751 ) ( 7,966 )

Income (loss) before income taxes 1,253,854 ( 1,891,030 )

Income tax expense ( 5,670 ) ( 11,442 )

Net loss ( 1,536,969 ) ( 1,063,219 ) ( 4,542,078 ) ( 28,779 )

Net income (loss) 1,248,184 ( 1,902,472 )

Net loss (income) at subsidiary attributable to noncontrolling interests 8,884 ( 43,791 )

10 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

Net loss $ ( 4,542,078 ) $ ( 28,779 )

Net income (loss) $ 1,248,184 $ ( 1,902,472 )

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

2 unchanged sentences

Share-based compensation 74,212 78,754

Decrease in non-cash contingent consideration ( 936,072 ) ( 1,017,712 )

Decrease (Increase) of life insurance policies over premiums paid ( 180,081 ) 16,357

Increase (decrease) in non-cash contingent consideration 44,976 ( 230,430 )

Decrease (increase) in cash surrender value of life insurance policies over premiums paid 81,182 ( 129,217 )

Noncash interest expense 5,362 3,810

Loss on disposal of assets 2,691 —

Life insurance proceeds ( 237,089 ) ( 346,800 )

Net changes in assets and liabilities affecting operating activities:

Accounts receivable 1,213,541 ( 1,066,410 )

Inventories 1,072,295 418,355

Inventories, net 967,399 170,469

Other current assets and other assets 60,371 205,619

5 unchanged sentences

Additions to property and equipment ( 47,630 ) ( 41,621 )

Life insurance policy proceeds received 237,556 —

Net investment in manufacturing facility ( 1,162,357 ) —

Additions to intangible assets ( 18,199 ) ( 16,565 )

Net cash provided by (used in) investing activities 84,651 ( 366,334 )

Net cash used in investing activities ( 1,228,186 ) ( 58,186 )

Cash flows from financing activities:

Proceeds from ATM offering, net 5,266,334 —

Borrowings on line of credit — 11,000,000

3 unchanged sentences

Net cash provided by (used in) financing activities ( 5,526,102 ) 2,421,694

Net decrease in cash and cash equivalents ( 856,870 ) ( 1,250,005 )

Net increase (decrease) in cash and cash equivalents ( 2,855,771 ) 226,861

Cash and cash equivalents at beginning of period $ 17,964,184 $ 18,321,624

11 unchanged sentences

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

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 $ 47,303,429 $ ( 10,144,457 ) $ ( 322,070 ) $ 36,836,902

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

Share-based compensation 3,500 83,112 — — 83,112

Repurchase of common shares ( 116,564 ) ( 201,237 ) — — ( 201,237 )

Net loss — — ( 1,049,298 ) ( 13,921 ) ( 1,063,219 )

Balance, September 30, 2023 14,217,926 $ 47,185,304 $ ( 11,193,755 ) $ ( 335,991 ) $ 35,655,558

Common stock Accumulated deficit Noncontrolling interests Total equity

1 unchanged sentence

Balance, December 31, 2024 13,952,624 $ 46,821,425 $ ( 23,967,931 ) $ ( 307,517 ) $ 22,545,977

Share issuances 1,000,000 4,715,950 — — 4,715,950

Share-based compensation 62,350 74,212 — — 74,212

2 unchanged sentences

Balance, March 31, 2025 14,961,137 $ 51,367,883 $ ( 22,710,863 ) $ ( 316,401 ) $ 28,340,619

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

Share-based compensation — 76,371 — — 76,371

Repurchase of common shares ( 72,447 ) ( 102,194 ) — — ( 102,194 )

Net income (loss) — — ( 1,544,081 ) 7,112 ( 1,536,969 )

Balance, September 30, 2024 14,010,736 $ 46,843,203 $ ( 22,064,117 ) $ ( 309,694 ) $ 24,469,392

See accompanying Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

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 pharmaceutical products.

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

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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, 2024 (the " 2024 Annual Report on Form 10-K " ).

The results of operations for the three and nine months ended September 30, 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 months ended March 31, 2025, are not necessarily indicative of the results to be expected for the entire fiscal year or any future period.

Recent Accounting Guidance

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, " Financial Instruments-Credit Losses, " which changes the impairment model for most financial assets and certain other instruments.

For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies are required to use a new forward-looking " expected loss " model that generally results in an earlier recognition of allowances for losses.

For available-for-sale debt securities with unrealized losses, companies measure credit losses in a manner similar with previous guidance, except that the losses are recognized as allowances rather than as reductions in the amortized cost of the securities.

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

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

Related to ASU No.

2016-13 discussed above, in May 2019, the FASB issued ASU 2019-05, "Financial Instruments-Credit Losses (Topic 326):

Targeted Transition Relief" which provides transition relief for ASU 2016-13 by providing entities with an alternative to irrevocably elect the fair value option for eligible financial assets measured at amortized cost upon adoption of the new credit losses standard.

Certain eligibility requirements must be met and the election must be applied on an instrument-by-instrument basis.

The election is not available for either available-for-sale or held-to-maturity debt securities.

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

Please refer to Trade and Notes Receivables Policy below.

Recently Issued Accounting Standards Not Yet Adopted

In November 2023, the FASB issued final guidance intended to improve transparency of segment disclosures, primarily through expanded disclosures for significant segment expenses.

In November 2023, the FASB issued final guidance in Update 2023-07, which is intended to improve transparency of segment disclosures, primarily through expanded disclosures for significant segment expenses.

The guidance is effective for annual periods beginning in 2024 and interim periods beginning in 2025.

Early adoption is permitted.

This new guidance will result in incremental disclosures in the notes to the Company’s segment reporting disclosures.

We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2025.

We are currently evaluating the potential impact of adopting this standard on our disclosures.

With the Company having only one segment, the adoption, effective January 1, 2024, did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued final guidance to improve transparency of income tax disclosures.

3 unchanged sentences

This new guidance will result in incremental disclosures in the notes to the Company’s income tax disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ("Update 2024-03"), which requires companies to disclose additional information for certain relevant expense categories in the Statements of Operations and within the notes to the financial statements.

Update 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted and can be applied either prospectively to financial statements issued for reporting periods after the effective date, or retrospectively to prior periods which are presented in the financial statements.

We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2024.

We are currently evaluating the potential impact of adopting this standard on our disclosures.

Accounting Policies

30 unchanged sentences

The Company reviews all balances over 90 days past due for a possible reserve and considers any specific factors or information for balances aged under 90 days if there are indicators that the balance should be reserved, such as other aged balances with the customer or bankruptcy as well as any economic issues with a customer industry or region.

The adoption of ASC 326 did not result in a material impact to the Company.

(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 and nine months ended September 30, 2024 and 2023:

Three months ended September 30,

Net loss attributable to common shareholders $ ( 1,544,081 ) $ ( 1,049,298 )

Weighted-average shares outstanding – basic 14,052,754 14,277,229

Dilutive effect of other securities — —

Weighted-average shares outstanding – diluted 14,052,754 14,277,229

Nine months ended September 30,

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, 2025 and 2024:

Three months ended March 31,

Net income (loss) attributable to common shareholders $ 1,257,068 $ ( 1,946,263 )

2 unchanged sentences

Weighted-average shares outstanding – diluted 15,259,824 14,098,022

As of September 30, 2024 and 2023, restricted stock awards and options to purchase 600,266 and 440,389 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.

As of March 31, 2025 and 2024, restricted stock awards and options to purchase 810,211 and 496,859 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 and nine months ended September 30, 2024 and 2023:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

The Company’s net revenues consisted of the following for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

Kristalose $ 3,484,310 $ 3,195,609

8 unchanged sentences

Total net revenues $ 11,713,055 $ 8,497,701

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

There was no Omeclamox-Pak net revenue for the first quarter of 2025 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 discontinued the sales of Omeclamox-Pak and expensed the remaining brand intangible assets in late 2023.

For the three and nine months ended September 30, 2024 and 2023, the amounts noted resulted from normal distribution adjustments.

For the three months ended March 31, 2025 and 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.

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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 and nine months ended September 30, 2024, the amounts reflected our share of sales of the compounded product and normal sales deduction adjustments.

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

For the three months ended March 31, 2025, the amounts are normal sales deduction adjustments.

For the three months ended March 31, 2024, the amounts reflected our share of sales of a special, interim compounded product introduced to the market in late 2023.

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

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

For the three months ended March 31, 2025 and 2024, the revenue amounts represented normal distribution and accrual adjustments.

Other Revenues

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

Grant revenue from these federal grant programs totaled approximately $ 0.4 million and $ 0.3 million for the nine months ended September 30, 2024 and 2023, respectively.

There was no grant revenue from these federal grant programs for the three months ended March 31, 2025 and was approximately $ 0.1 million for the three months ended March 31, 2024.

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 $ 0.13 million and $ 0.16 million for the three months ended September 30, 2024 and 2023, respectively, and $ 0.4 million both for the nine months ended September 30, 2024 and 2023, respectively.

As part of a CET development agreement, $ 0.2 million was included in CET's other revenue for the three months ended September 30, 2024, which represents development funding associated with a new product.

This lease income, as noted in Footnote 5 - Leases, was approximately $ 0.2 million for the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025, the Company received a $ 3.0 million milestone payment associated with the approval of Vibativ for the Chinese market.

We recognized as revenue all but $ 25,000 of the milestone payment which is the estimated cost of virtual marketing training that will take place prior to the launch of the product in the Chinese market.

(4) INVENTORIES

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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 September 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.

At March 31, 2025 and December 31, 2024, there were no cumulative net realizable value charges for potential obsolescence and discontinuance losses necessary.

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

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

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

September 30, 2024 December 31, 2023

At March 31, 2025 and December 31, 2024, the Company's net inventories consisted of the following:

March 31, 2025 December 31, 2024

Raw materials and work in process $ 10,832,574 $ 11,982,045

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Total inventories classified as current $ 4,098,859 $ 3,999,995

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

September 30, 2024 December 31, 2023

At March 31, 2025 and December 31, 2024, the Company's non-current inventories consisted of the following:

March 31, 2025 December 31, 2024

Vibativ Raw Materials $ 5,356,857 $ 6,180,347

6 unchanged sentences

Vibativ Finished Goods 163,688 183,057

Sancuso Finished Goods 46,602 —

Caldolor Finished Goods 178,130 77,382

Acetadote Finished Goods 31,517 —

Omeclamox 69,622 69,622

12 unchanged sentences

The Company also subleases a portion of the space under this lease.

Also included within the right-of-use assets are start up expenditures related to a new supply agreement with Nephron Pharmaceuticals Corporation ("Nephron") for our Vaprisol product.

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 September 30, 2024, the right-of-use asset was $ 0.8 million.

Also included within the right-of-use assets are start up expenditures related to new supply agreements with Nephron Pharmaceuticals Corporation ("Nephron") for our Vaprisol product and Kindos Pharmaceuticals Co., Ltd.

("Kindos") for our Vibativ product.

These expenditures are classified as embedded leases resulting in right-of-use assets to be amortized over the life of the contracts.

As of March 31, 2025, the right-of-use assets for Nephron and Kindos was $ 0.7 million and $ 1.3 million, respectively, and included in the total right-of-use assets of $ 7.2 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 Lease and Gateway Lease is 9.8 years and 10.6 years at September 30, 2024 and September 30, 2023, respectively.

The weighted-average incremental borrowing rate used to discount the present value of the remaining lease payments for both leases is 9.38 % and 9.40 % at September 30, 2024 and December 31, 2023, respectively.

The weighted-average remaining lease term for the Broadwest Lease and Gateway Lease is 9.4 years and 10.2 years at March 31, 2025 and March 31, 2024, respectively.

The weighted-average incremental borrowing rate used to discount the present value of the remaining lease payments for both leases is 9.37 % and 9.38 % at March 31, 2025 and December 31, 2024, respectively.

Lease Position

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

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

At March 31, 2025 and December 31, 2024, the Company's lease assets and liabilities were as follows:

Right-of-Use Assets March 31, 2025 December 31, 2024

Operating lease right-of-use assets $ 7,177,490 $ 6,176,923

Lease Liabilities September 30, 2024 December 31, 2023

Lease Liabilities March 31, 2025 December 31, 2024

Operating lease current liabilities $ 371,094 $ 356,508

1 unchanged sentence

Total $ 5,200,148 $ 5,296,247

As of September 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.

As of March 31, 2025, 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 September 30, 2024

Maturity of Lease Liabilities at March 31, 2025

Operating Leases

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Rent expense and sublease income were as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Rent expense $ 354,752 $ 355,064

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 nine months ended September 30, 2024 and September 30, 2023, the Company repurchased 275,088 and 302,450 shares of common stock, respectively, for approximately $ 0.5 million during each period.

At September 30, 2024, there remains approximately $ 2.5 million available under the current repurchase program for common share repurchases.

During the three months ended March 31, 2025 and March 31, 2024, the Company repurchased 53,837 and 125,870 shares of common stock, respectively, for approximately $ 0.2 million during each period.

At March 31, 2025, there remains approximately $ 2.2 million available under the current repurchase program for common share repurchases.

Share purchases and sales

In the Company's March 2024 trading window, several members of Cumberland's Board of Directors entered into agreements for trading plans to purchase shares of the Company's stock pursuant to Rule 10b5-1 of the Exchange Act.

In the Company's November 2024 trading window, several members of Cumberland's Board of Directors entered into agreements for trading plans to purchase shares of the Company's stock pursuant to Rule 10b5-1 of the Exchange Act.

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

The plans became effective on June 13, 2024, and as of September 30, 2024, a total of 22,893 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.

The Shelf Registration was declared effective in January 2018.

It also included an At the Market ("ATM") feature that allowed 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 2023, which was declared effective December 26, 2023.

The plans became effective on March 3, 2025, and as of March 31, 2025, a total of 1,285 shares have been purchased through these trading plans.

The Company filed an updated Form S-3 with the SEC in December 2023, which was declared effective December 26, 2023 (the "Current Registration Statement").

The Company entered into an agreement with H.C.

Wainwright & Co., LLC (H.C.

Wainwright") to establish a new At the Market ("ATM") program under the Current Registration Statement.

On March 20, 2024, 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 $ 5.8 million.

On February 5, 2025, the Company issued 1,000,000 shares under an ATM for an aggregate amount of $ 5.5 million.

As a result of this transaction, deferred offering costs of $ 0.6 million related to the ATM were reclassified as a reduction of paid-in-capital.

On February 14, 2025, the Company filed a prospectus supplement to amend the previous prospectus supplement to increase the maximum gross sales price from $ 5.8 million to $ 10 million.

The Company intends to continue an ATM feature through H.C.

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 nine months ended September 30, 2024.

Wainwright, that would allow the Company to additionally issue shares of its common stock.

Restricted Share Grants and Incentive Stock Options

During the nine months ended September 30, 2024 and September 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 nine months ended September 30, 2024 and September 30, 2023, the Company also issued 190,450 and 192,550 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 three months ended March 31, 2025 and March 31, 2024, the Company issued 35,110 shares and 50,500 shares of restricted stock, respectively, to advisors and directors.

Restricted stock issued to 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, 2025 and March 31, 2024, the Company also issued 177,100 and 187,600 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 2035 and 2034, 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 nine months ended September 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.

For the three months ended March 31, 2025 and 2024, stock compensation expense was $ 0.07 million.

Of this amount, we recorded a credit of $ 3,503 related to the forfeiture of unvested restricted stock awards and incentive stock options.

Debt Agreement

7 unchanged sentences

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 September 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 Loan Agreement was 8.000 % at September 30, 2024.

As of March 31, 2025 and December 31, 2024, the Company had $ 5.2 million and $ 15.3 million, respectively, in borrowings outstanding under its revolving credit facility.

The applicable interest rate under the Loan Agreement was 7.125 % at March 31, 2025.

Joint Venture Agreement

5 unchanged sentences

(7) INCOME TAXES

As of September 30, 2024, the Company has approximately $ 51.9 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 March 31, 2025, the Company has approximately $ 52.7 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.

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Contingent consideration earned and accrued in operating expenses —

Balance at September 30, 2024

The contingent consideration liability of $ 3.5 million was accounted for as $ 1.2 million of other current liabilities and $ 2.3 million of other long-term liabilities on the condensed consolidated balance sheet as of September 30, 2024.

Balance at March 31, 2025

The contingent consideration liability of $ 3.1 million was accounted for as $ 0.9 million of other current liabilities and $ 2.2 million of other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2025.

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

24 unchanged sentences

Contingent consideration earned and accrued in operating expenses 140,392

Balance at September 30, 2024

Balance at March 31, 2025

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

The contingent consideration liability of $ 1.7 million was accounted for as $ 1.3 million of current liabilities and $ 0.4 million of other long-term liabilities on the condensed consolidated balance sheet as of September 30, 2024.

The contingent consideration liability of $ 1.3 million was accounted for as $ 0.67 million of current liabilities and $ 0.68 million of other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2025.

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

2 unchanged sentences

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