What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 86 added, 60 removed, 367 unchanged (28% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

25 unchanged sentences

100,000,000 shares authorized;

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

14,959,937 and 13,952,624 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

51,441,398 46,821,425

8 unchanged sentences

Condensed Consolidated Statements of Operations

Three months ended March 31,

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

2025 2024 2025 2024

Net revenues $ 10,837,363 $ 9,848,849 $ 22,550,418 $ 18,346,550

24 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

5 unchanged sentences

Increase (decrease) in non-cash contingent consideration 83,578 ( 442,321 )

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

Increase in cash surrender value of life insurance policies over premiums paid ( 40,507 ) ( 101,538 )

Noncash interest expense 10,723 8,654

9 unchanged sentences

Additions to property and equipment ( 74,116 ) ( 48,799 )

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

Net investment in manufacturing ( 836,095 ) —

Additions to intangible assets ( 32,111 ) ( 56,191 )

6 unchanged sentences

Payments made in connection with repurchase of common shares ( 253,039 ) ( 381,851 )

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

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

Net cash (used in) provided by financing activities ( 5,676,899 ) 2,112,119

Net decrease in cash and cash equivalents ( 1,876,903 ) ( 985,178 )

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

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

Common stock Accumulated deficit Noncontrolling interests Total equity

6 unchanged sentences

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

Share issuances — — — — —

Share-based compensation 600 80,685 — — 80,685

Repurchase of common shares ( 1,800 ) ( 7,170 ) — — ( 7,170 )

Net income (loss) — — ( 740,740 ) 5,533 ( 735,207 )

Balance, June 30, 2025 14,959,937 $ 51,441,398 $ ( 23,451,603 ) $ ( 310,868 ) $ 27,678,927

See accompanying Notes to Condensed Consolidated Financial Statements

11 unchanged sentences

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 currently own six products approved by the U.S.

Food and Drug Administration ("FDA") in the United States.

We are also continuing to build international partnerships to bring our medicines to patients in other countries.

8 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, 2024 (the " 2024 Annual Report on Form 10-K " ).

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.

The results of operations for the three and six months ended June 30, 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 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.

In November 2023, the Financial Accounting Standards Board ("FASB") issued final guidance in Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, 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.

1 unchanged sentence

Recently Issued Accounting Standards Not Yet Adopted

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

In December 2023, the FASB issued final guidance, ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to improve transparency of income tax disclosures.

The final guidance requires enhanced disclosures primarily related to existing rate reconciliation and income taxes paid information.

4 unchanged sentences

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.

Disaggregation of Income Statement Expenses ("ASU 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.

ASU 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.

32 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, 2025 and 2024:

Three months ended March 31,

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, 2025 and 2024:

Three months ended June 30,

Net loss attributable to common shareholders $ ( 740,740 ) $ ( 1,085,612 )

Weighted-average shares outstanding – basic 14,960,596 14,118,091

Dilutive effect of other securities — —

Weighted-average shares outstanding – diluted 14,960,596 14,118,091

Six months ended June 30,

Net income (loss) attributable to common shareholders $ 516,328 $ ( 3,031,875 )

2 unchanged sentences

Weighted-average shares outstanding – diluted 15,274,134 14,107,852

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.

As of June 30, 2025 and 2024, restricted stock awards and options to purchase 753,089 and 576,517 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, 2025 and 2024:

Three months ended March 31,

The Company’s net revenues consisted of the following for the three and six months ended June 30, 2025 and 2024:

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

2025 2024 2025 2024

Kristalose $ 2,754,299 $ 4,107,834 $ 6,238,609 $ 7,303,444

3 unchanged sentences

Acetadote 193,546 43,396 345,195 123,599

Omeclamox-Pak ( 5,387 ) ( 1,615 )

Vaprisol ( 14,621 ) ( 1,581 ) ( 15,221 ) 7,081

Omeclamox-Pak ( 752 ) ( 941 ) ( 6,139 ) ( 2,556 )

RediTrex 3,244 ( 1,156 ) 2,897 34,400

1 unchanged sentence

Total net revenues $ 10,837,363 $ 9,848,849 $ 22,550,418 $ 18,346,550

There was no Omeclamox-Pak net revenue for the first quarter of 2025 due to our lack of commercial inventory of this product.

There was no Omeclamox-Pak net revenue for the first six months 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 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.

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

For the three and six months ended June 30, 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 an FDA Form 483 in the second quarter of 2022.

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

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.

For the three and six months ended June 30, 2025, the amounts are normal sales deduction adjustments.

For the three and six months ended June 30, 2024, the amounts reflected our share of sales of a special, interim compounded product introduced to the market in late 2023 and normal sales deduction adjustments.

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

For the three and six months ended June 30, 2025 and 2024, the revenue amounts represented normal distribution and accrual adjustments.

Other Revenues

7 unchanged sentences

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

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.

There was no grant revenue from these federal grant programs for the six months ended June 30, 2025 and was approximately $ 0.1 million for the six months ended June 30, 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 $ 0.2 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.

This lease income, as noted in Footnote 5 - Leases, was approximately $ 0.2 million and $ 0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 0.3 million for the six months ended June 30, 2025 and 2024.

During the six months ended June 30, 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.

As part of a CET development agreement, $ 0.2 million was included in other revenue for the three months ended June 30, 2025, which represents development funding associated with a new product.

(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, 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.

At June 30, 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 Sancuso and maintains the inventory of that raw material.

API for the Company's Vaprisol and Vibativ brands were included in the assets associated with the acquisition of those brands and are also included in the raw materials inventory.

As part of the Vibativ acquisition, the Company acquired API and work in process inventories of $ 15.6 million that were all initially classified as non-current inventories at the date of acquisition.

As these APIs are consumed in the manufacture of our products, the value of the API involved is transferred from raw materials to finished goods.

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

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

March 31, 2025 December 31, 2024

At June 30, 2025 and December 31, 2024, the Company's net inventories consisted of the following:

June 30, 2025 December 31, 2024

Raw materials and work in process $ 10,376,276 $ 11,982,045

4 unchanged sentences

Total inventories classified as current $ 3,222,872 $ 3,999,995

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

March 31, 2025 December 31, 2024

At June 30, 2025 and December 31, 2024, the Company's non-current inventories consisted of the following:

June 30, 2025 December 31, 2024

Vibativ Raw Materials $ 4,981,627 $ 6,180,347

24 unchanged sentences

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.

As of June 30, 2025, the right-of-use assets for Nephron and Kindos was $ 0.7 million and $ 1.4 million, respectively, and included in the total right-of-use assets of $ 7.1 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 9.4 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.

The weighted-average remaining lease term for the Broadwest Lease and Gateway Lease is 9.2 years and 10.0 years at June 30, 2025 and June 30, 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 June 30, 2025 and December 31, 2024, respectively.

Lease Position

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

At June 30, 2025 and December 31, 2024, the Company's lease assets and liabilities were as follows:

Right-of-Use Assets June 30, 2025 December 31, 2024

Operating lease right-of-use assets $ 7,125,408 $ 6,176,923

Lease Liabilities March 31, 2025 December 31, 2024

Lease Liabilities June 30, 2025 December 31, 2024

Operating lease current liabilities $ 386,077 $ 356,508

1 unchanged sentence

Total $ 5,100,260 $ 5,296,247

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.

As of June 30, 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 March 31, 2025

Maturity of Lease Liabilities at June 30, 2025

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,

2025 2024 2025 2024

Rent expense $ 363,583 $ 344,418 $ 718,335 $ 699,482

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, 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.

During the six months ended June 30, 2025 and June 30, 2024, the Company repurchased 55,637 and 202,641 shares of common stock for $ 0.3 million and approximately $ 0.4 million, respectively.

At June 30, 2025, there remains approximately $ 2.2 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.

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 plans became effective on March 3, 2025, and as of June 30, 2025, a total of 5,505 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").

9 unchanged sentences

Restricted Share Grants and Incentive Stock Options

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.

During the six months ended June 30, 2025 and June 30, 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.

During the six months ended June 30, 2025 and June 30, 2024, the Company also issued 179,500 and 189,250 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 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 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.

For the six months ended June 30, 2025 and 2024, stock compensation expense was $ 0.2 million for each period.

For the six months ended June 30, 2025, we recorded a credit of $ 5,973 to stock compensation expense related to the forfeiture of unvested incentive stock options.

For the six months ended June 30, 2024, we recorded a credit of $ 18,564 .

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 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.

As of June 30, 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 June 30, 2025.

Joint Venture Agreement

5 unchanged sentences

(7) INCOME TAXES

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.

As of June 30, 2025, 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.

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

The Company expects it will continue to pay minimal income taxes during 2025 and beyond, through the continued utilization of these net operating loss carryforwards, on any taxable income generated from our operations.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact on our consolidated financial statements.

(8) COLLABORATIVE AGREEMENTS

25 unchanged sentences

Contingent consideration earned and accrued in operating expenses 230,484

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.

Balance at June 30, 2025

The contingent consideration liability of $ 3.4 million was accounted for as $ 1.1 million of other current liabilities and $ 2.3 million of other long-term liabilities on the condensed consolidated balance sheet as of June 30, 2025.

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

24 unchanged sentences

Contingent consideration earned and accrued in operating expenses 289,582

Balance at March 31, 2025

Balance at June 30, 2025

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

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.

The contingent consideration liability of $ 1.3 million was accounted for as $ 0.7 million of current liabilities and $ 0.6 million of other long-term liabilities on the condensed consolidated balance sheet as of June 30, 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