[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements and their accompanying notes, detailing the company's financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------------- | :-------------- | :---------------- | :--------- | | Cash and cash equivalents | $16,087,281 | $17,964,184 | -10.45% | | Total current assets | $31,205,329 | $36,452,158 | -14.39% | | Total assets | $67,907,149 | $75,583,410 | -10.16% | | Total current liabilities | $23,972,140 | $31,621,729 | -24.20% | | Total liabilities | $40,228,222 | $53,037,433 | -24.15% | | Total shareholders' equity | $27,989,795 | $22,853,494 | +22.40% | | Total equity | $27,678,927 | $22,545,977 | +22.77% | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance for the three and six months ended June 30, 2025 and 2024 Three Months Ended June 30 (YoY Comparison) | Metric | 2025 | 2024 | Change (%) | | :----- | :------------ | :------------ | :--------- | | Net revenues | $10,837,363 | $9,848,849 | +10.03% | | Total costs and expenses | $11,584,841 | $10,875,537 | +6.52% | | Operating income (loss) | $(747,478) | $(1,026,688) | +27.21% | | Net income (loss) | $(735,207) | $(1,102,637) | +33.32% | | Basic EPS | $(0.05) | $(0.08) | +37.50% | Six Months Ended June 30 (YoY Comparison) | Metric | 2025 | 2024 | Change (%) | | :----- | :------------ | :------------ | :--------- | | Net revenues | $22,550,418 | $18,346,550 | +22.91% | | Total costs and expenses | $22,005,949 | $21,242,488 | +3.59% | | Operating income (loss) | $544,469 | $(2,895,938) | +118.80% |\ | Net income (loss) | $512,977 | $(3,005,109) | +117.07% | | Basic EPS | $0.03 | $(0.21) | +114.29% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Six Months Ended June 30 (YoY Comparison) | Cash Flow Activity | 2025 | 2024 | Change ($) | | :----------------- | :------------ | :------------ | :--------- | | Operating activities | $4,742,318 | $(2,992,307) | +$7,734,625 |\ | Investing activities | $(942,322) | $(104,990) | -$837,332 |\ | Financing activities | $(5,676,899) | $2,112,119 | -$7,789,018 |\ | Net decrease in cash and cash equivalents | $(1,876,903) | $(985,178) | -$891,725 | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This section presents changes in shareholders' equity for the six months ended June 30, 2025 Equity Changes (December 31, 2024 to June 30, 2025) | Metric | December 31, 2024 | June 30, 2025 | Change ($) | | :-------------------------- | :---------------- | :------------ | :--------- | | Common stock (Amount) | $46,821,425 | $51,441,398 | +$4,619,973 |\ | Accumulated deficit | $(23,967,931) | $(23,451,603) | +$516,328 |\ | Noncontrolling interests | $(307,517) | $(310,868) | -$3,351 |\ | Total equity | $22,545,977 | $27,678,927 | +$5,132,950 | - Share issuances contributed **$4,715,950** to common stock during the six months ended March 31, 2025, while share repurchases reduced common stock by **$243,704** in the same period and **$7,170** in the subsequent quarter. Share-based compensation added **$74,212** and **$80,685** respectively[16](index=16&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [(1) Organization and Basis of Presentation](index=8&type=section&id=%281%29%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's business, operating segment, and the basis for preparing its interim financial statements - Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on branded prescription pharmaceuticals for hospital acute care, gastroenterology, and oncology markets[19](index=19&type=chunk)[20](index=20&type=chunk) - The company operates as a single operating segment, with substantially all assets and revenues attributable to U.S. customers[28](index=28&type=chunk) - Recent accounting guidance ASU 2023-07 (Segment Reporting) had no material impact due to the company's single segment. ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation) are effective in 2025 and 2026/2027 respectively, and their impact is currently being assessed[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company applies Current Expected Credit Losses (CECL) to financial instruments, primarily trade and notes receivables, pooling assets based on similar risk characteristics. Historically, there have been virtually no write-downs of receivables due to reliable payments from large pharmaceutical, healthcare, or government customers[29](index=29&type=chunk)[31](index=31&type=chunk) [(2) Earnings (Loss) Per Share](index=11&type=section&id=%282%29%20EARNINGS%20%28LOSS%29%20PER%20SHARE) This note reconciles the numerator and denominator for basic and diluted earnings per share calculations EPS Reconciliation (Three Months Ended June 30) | Metric | 2025 | 2024 | | :----------------------------------- | :------------ | :------------ | | Net loss attributable to common shareholders | $(740,740) | $(1,085,612) | | Weighted-average shares outstanding – basic | 14,960,596 | 14,118,091 | | Weighted-average shares outstanding – diluted | 14,960,596 | 14,118,091 | EPS Reconciliation (Six Months Ended June 30) | Metric | 2025 | 2024 | | :----------------------------------- | :------------ | :------------ | | Net income (loss) attributable to common shareholders | $516,328 | $(3,031,875) | | Weighted-average shares outstanding – basic | 14,951,609 | 14,107,852 | | Dilutive effect of other securities | 322,525 | — | | Weighted-average shares outstanding – diluted | 15,274,134 | 14,107,852 | - As of June 30, 2025, **753,089** restricted stock awards and options were outstanding but excluded from diluted EPS calculation due to their antidilutive effect, except for the six months ended June 30, 2025, where a dilutive effect of **322,525** shares was recognized[33](index=33&type=chunk) [(3) Revenues](index=12&type=section&id=%283%29%20REVENUES) This note details the company's net revenues by product and other sources for the reported periods Net Revenues by Product (Three Months Ended June 30) | Product | 2025 | 2024 | Change ($) | Change (%) | | :-------- | :------------ | :------------ | :------------ | :--------- | | Kristalose | $2,754,299 | $4,107,834 | $(1,353,535) | -32.95% | | Sancuso | $3,119,110 | $2,188,776 | $930,334 | +42.49% | | Vibativ | $2,701,854 | $2,454,481 | $247,373 | +10.08% | | Caldolor | $1,588,293 | $844,248 | $744,045 | +88.13% | | Acetadote | $193,546 | $43,396 | $150,150 | +346.00% | | Vaprisol | $(14,621) | $(1,581) | $(13,040) | -824.79% | | Other revenue | $492,390 | $213,792 | $278,598 | +130.31% | | **Total Net Revenues** | **$10,837,363** | **$9,848,849** | **$988,514** | **+10.03%** | Net Revenues by Product (Six Months Ended June 30) | Product | 2025 | 2024 | Change ($) | Change (%) | | :-------- | :------------ | :------------ | :------------ | :--------- | | Kristalose | $6,238,609 | $7,303,444 | $(1,064,835) | -14.58% | | Sancuso | $5,375,405 | $4,016,544 | $1,358,861 | +33.83% | | Vibativ | $4,079,920 | $4,059,970 | $19,950 | +0.49% | | Caldolor | $2,895,733 | $2,314,947 | $580,786 | +25.09% | | Acetadote | $345,195 | $123,599 | $221,596 | +179.29% | | Vaprisol | $(15,221) | $7,081 | $(22,302) | -314.95% | | Other revenue | $3,634,019 | $489,121 | $3,144,898 | +642.96% | | **Total Net Revenues** | **$22,550,418** | **$18,346,550** | **$4,203,868** | **+22.91%** | - Other revenues for the six months ended June 30, 2025, included a **$3.0 million** milestone payment for Vibativ's approval in the Chinese market and **$0.2 million** in development funding for a new product[41](index=41&type=chunk)[42](index=42&type=chunk) - Omeclamox-Pak sales were discontinued in late 2023 due to packaging issues, and Vaprisol sales were impacted by a manufacturing transition awaiting FDA approval[35](index=35&type=chunk)[36](index=36&type=chunk) [(4) Inventories](index=14&type=section&id=%284%29%20INVENTORIES) This note provides a breakdown of inventory composition and valuation, including current and non-current classifications Inventory Composition | Inventory Type | June 30, 2025 | December 31, 2024 | | :----------------------- | :-------------- | :---------------- | | Raw materials and work in process | $10,376,276 | $11,982,045 | | Consigned inventory | $114,045 | $126,090 | | Finished goods | $2,258,673 | $2,897,359 | | **Total inventories** | **$12,748,994** | **$15,005,494** | | Less non-current inventories | $(9,526,122) | $(11,005,499) | | **Total inventories classified as current** | **$3,222,872** | **$3,999,995** | Non-Current Inventories by Product | Product Raw Materials/Finished Goods | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Vibativ Raw Materials | $4,981,627 | $6,180,347 | | Kristalose Raw Materials | $2,576,128 | $2,672,720 | | Vaprisol Raw Materials | $1,172,849 | $1,172,849 | | Sancuso Raw Materials | $326,124 | $458,684 | | Caldolor Raw Materials | $13,971 | — | | Acetadote Raw Materials | — | $23,915 | | Ifetroban Raw Materials | $65,270 | $166,923 | | Vibativ Finished Goods | $157,645 | $183,057 | | Caldolor Finished Goods | $162,886 | $77,382 | | Omeclamox | $69,622 | $69,622 | | **Total non-current inventories** | **$9,526,122** | **$11,005,499** | - The company continually evaluates inventory for obsolescence, with no cumulative net realizable value charges necessary at June 30, 2025, or December 31, 2024[44](index=44&type=chunk) [(5) Leases](index=15&type=section&id=%285%29%20LEASES) This note details the company's operating lease arrangements, including right-of-use assets and lease liabilities Lease Assets and Liabilities | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Operating lease right-of-use assets | $7,125,408 | $6,176,923 | | Operating lease current liabilities | $386,077 | $356,508 | | Operating lease non-current liabilities | $4,714,183 | $4,939,739 | | **Total lease liabilities** | **$5,100,260** | **$5,296,247** | - The weighted-average remaining lease term for the Broadwest and Gateway Leases is **9.2 years** at June 30, 2025, with a weighted-average incremental borrowing rate of **9.37%**[52](index=52&type=chunk) Rent Expense and Sublease Income (Three and Six Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------- | :------------ | :------------ | :------------ | :------------ | | Rent expense | $363,583 | $344,418 | $718,335 | $699,482 | | Sublease income | $162,797 | $123,230 | $321,426 | $287,913 | [(6) Shareholders' Equity and Debt](index=18&type=section&id=%286%29%20SHAREHOLDERS%27%20EQUITY%20AND%20DEBT) This note outlines changes in shareholders' equity, share repurchase programs, and debt obligations - The company has a **$10 million** share repurchase program, with approximately **$2.2 million** available as of June 30, 2025. During the six months ended June 30, 2025, **55,637** shares were repurchased for **$0.3 million**[55](index=55&type=chunk) - In February 2025, the company issued **1,000,000** shares through an ATM offering for **$5.5 million**, and subsequently increased the maximum gross sales price under the ATM program to **$10 million**[57](index=57&type=chunk) - Share-based compensation expense was **$0.2 million** for both the six months ended June 30, 2025 and 2024[59](index=59&type=chunk) - As of June 30, 2025, the company had **$5.2 million** in borrowings outstanding under its **$25 million** revolving credit facility with Pinnacle Bank, at an interest rate of **7.125%**[60](index=60&type=chunk)[62](index=62&type=chunk) [(7) Income Taxes](index=19&type=section&id=%287%29%20INCOME%20TAXES) This note discusses the company's net operating loss carryforwards and the impact of recent tax legislation - As of June 30, 2025, the company has approximately **$51.9 million** in federal net operating loss carryforwards, including **$44.1 million** from nonqualified stock options, which are expected to minimize future income tax obligations[64](index=64&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) in the U.S. includes significant tax provisions, and the company is currently assessing its impact on financial statements[65](index=65&type=chunk) [(8) Collaborative Agreements](index=19&type=section&id=%288%29%20COLLABORATIVE%20AGREEMENTS) This note describes the company's collaborative arrangements and their accounting treatment - Collaborative agreements with research institutions are primarily funded by SBIR/STTR programs and grants[66](index=66&type=chunk) - Most collaborative agreements do not meet ASC Topic 808 criteria, with expenses included in R&D and grant funding in net revenues[66](index=66&type=chunk) [(9) Commitments and Contingencies](index=19&type=section&id=%289%29%20COMMITMENTS%20AND%20CONTINGENCIES) This note addresses the company's involvement in litigation and its expected financial impact - The company is involved in normal course litigation but does not expect a material adverse effect on its business or financial condition[67](index=67&type=chunk) [(10) Product Acquisitions and Return of Product Rights](index=20&type=section&id=%2810%29%20PRODUCT%20ACQUISITIONS%20AND%20RETURN%20OF%20PRODUCT%20RIGHTS) This note details the accounting for product acquisitions and the return of product rights, including contingent consideration - Vibativ was acquired in November 2018, including global rights, for an upfront payment of **$20 million** and a **$5 million** milestone payment, with ongoing royalties up to **20%** of net sales[68](index=68&type=chunk)[69](index=69&type=chunk) Vibativ Contingent Consideration Liability | Metric | Amount ($) | | :---------------------------------------------------- | :--------- | | Balance at December 31, 2024 | 3,242,999 | | Cash payment of royalty during the period | (273,028) | | Change in fair value of contingent consideration included in operating expenses | 201,431 | | Contingent consideration earned and accrued in operating expenses | 230,484 | | **Balance at June 30, 2025** | **3,401,886** | - Sancuso U.S. rights were acquired in January 2022 for a **$13.5 million** upfront payment and up to **$3.5 million** in milestone payments, with ongoing royalties up to **10%** of net sales[73](index=73&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) Sancuso Contingent Consideration Liability | Metric | Amount ($) | | :---------------------------------------------------- | :--------- | | Balance at December 31, 2024 | 1,516,000 | | Cash payment of milestones and royalty during the period | (381,729) | | Change in fair value of contingent consideration included in operating expenses | (117,853) | | Contingent consideration earned and accrued in operating expenses | 289,582 | | **Balance at June 30, 2025** | **1,306,000** | - The company returned all U.S. rights to RediTrex to Nordic Group B.V. effective June 30, 2023, and will receive a long-term royalty on future sales[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and future outlook [Disclosure regarding forward-looking statements](index=22&type=section&id=Disclosure%20regarding%20forward-looking%20statements) This section cautions that the discussion contains forward-looking statements subject to inherent risks and uncertainties - The discussion contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially. The company does not undertake to publicly update or revise these statements[82](index=82&type=chunk) [Overview of Business](index=23&type=section&id=OVERVIEW) This section provides a general description of the company's specialty pharmaceutical business and product portfolio - Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on acquiring, developing, and commercializing branded prescription pharmaceuticals, targeting hospital acute care, gastroenterology, and oncology[84](index=84&type=chunk)[85](index=85&type=chunk) - The company's portfolio includes six FDA-approved commercial brands: Acetadote, Caldolor, Kristalose, Sancuso, Vaprisol, and Vibativ[90](index=90&type=chunk) - Cumberland has ongoing Phase II clinical programs for ifetroban in Duchenne muscular dystrophy (DMD), Systemic Sclerosis (SSc), and Idiopathic Pulmonary Fibrosis (IPF)[86](index=86&type=chunk)[87](index=87&type=chunk) [Growth Strategy](index=24&type=section&id=GROWTH%20STRATEGY) This section outlines the company's strategic initiatives for maximizing existing brands and expanding its product pipeline - The growth strategy focuses on maximizing existing brands, building a differentiated product portfolio through acquisitions, progressing clinical pipelines (e.g., ifetroban), leveraging infrastructure via co-promotion, expanding international presence, and maintaining financial discipline[91](index=91&type=chunk)[92](index=92&type=chunk) - Key initiatives include expanding product labeling (Acetadote, Caldolor), acquiring under-promoted FDA-approved drugs or late-stage development candidates (e.g., Vibativ, Sancuso), and incubating early-stage products through Cumberland Emerging Technologies (CET)[92](index=92&type=chunk) [Recent Developments](index=25&type=section&id=RECENT%20DEVELOPMENTS) This section highlights key recent events, including clinical trial progress, product approvals, and strategic partnerships - Breakthrough findings from the Phase II FIGHT DMD trial for ifetroban showed a **5.4%** improvement in cardiac function in DMD patients, positioning it as a potential treatment for DMD cardiomyopathy. An end-of-Phase 2 meeting with the FDA is scheduled for Fall 2025[93](index=93&type=chunk)[94](index=94&type=chunk) - Enrollment for the Phase II ifetroban study in Systemic Sclerosis (scleroderma) is complete, with top-line findings expected later this year. Patient enrollment is also underway for the FIGHTING FIBROSIS™ trial in Idiopathic Pulmonary Fibrosis (IPF)[95](index=95&type=chunk)[96](index=96&type=chunk) - The Vibativ 4-Vial Starter Pak is now available to Vizient Inc. healthcare providers, expanding access to the product. A new pharmacokinetic analysis reinforces optimized dosing strategies for Vibativ[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - A study published in Clinical Therapeutics demonstrated Caldolor's safety and efficacy for managing post-operative pain in older patients (60+), showing a **24%** reduction in pain at rest and a **23.2%** reduction in morphine requirement compared to placebo[101](index=101&type=chunk)[102](index=102&type=chunk) - Cumberland partnered with Qureight Ltd. to use AI-enhanced image analytics for the FIGHTING FIBROSIS™ trial, aiming for deeper insights into treatment efficacy and disease progression in IPF[104](index=104&type=chunk)[105](index=105&type=chunk) - Vibativ received regulatory approval in China, and Tabuk Pharmaceutical has obtained final approvals to commercialize Vibativ in Saudi Arabia, with shipments and training completed in late 2024[106](index=106&type=chunk)[107](index=107&type=chunk) [Competition](index=27&type=section&id=Competition) This section discusses the competitive landscape within the pharmaceutical industry and specific product competition - The pharmaceutical industry is highly competitive, with competition from other branded products, generics, and alternate medical treatments[108](index=108&type=chunk) - Kristalose faces competition from branded prescription products like Amitiza, Movantik, Linzess, and Vibrant, hundreds of OTC products (e.g., MiraLax), and other lactulose products including generics. A new generic crystalline lactulose product became available in Q2 2025[109](index=109&type=chunk) [Tariffs](index=27&type=section&id=Tariffs) This section addresses potential impacts of trade policies and tariffs on pharmaceutical imports - The U.S. Department of Commerce initiated a Section 232 investigation into pharmaceutical imports, which could lead to additional tariffs. A trade deal with the EU in July 2025 imposed a **15%** tariff on imported medicines from Europe into the U.S[111](index=111&type=chunk)[112](index=112&type=chunk) [Summary](index=27&type=section&id=Summary) This section provides a concise overview of the company's anticipated future performance and strategic focus - The company anticipates continued momentum driven by growth from approved brands, expanded international partnerships, progress in clinical development programs, and potential acquisitions, while remaining focused on its mission[113](index=113&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=29&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGMENTS%20AND%20ESTIMATES) This section outlines the key accounting policies and estimates that require significant management judgment - Key estimates include allowances for chargebacks, rebates, product returns, obsolescent inventory, and valuation of contingent consideration liabilities associated with business combinations[116](index=116&type=chunk) [Results of Operations (Three Months Ended June 30, 2025 vs. 2024)](index=30&type=section&id=RESULTS%20OF%20OPERATIONS%20%28Three%20months%20ended%20June%2030,%202025%20compared%20to%20the%20three%20months%20ended%20June%2030,%202024%29) This section analyzes the company's financial performance for the three months ended June 30, 2025, compared to the prior year Key Financials (Three Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :------------ | :--------- | | Net revenues | $10,837,363 | $9,848,849 | $988,514 | +10.03% | | Cost of products sold | $2,011,389 | $1,710,944 | $300,445 | +17.56% | | Selling and marketing | $4,223,647 | $4,248,401 | $(24,754) | -0.58% | | Research and development | $1,468,399 | $1,059,187 | $409,212 | +38.63% | | General and administrative | $2,874,922 | $2,757,148 | $117,774 | +4.27% | | Amortization | $1,006,484 | $1,099,857 | $(93,373) | -8.49% | | Operating loss | $(747,478) | $(1,026,688) | $279,210 | +27.21% | | Net loss | $(735,207) | $(1,102,637) | $367,430 | +33.32% | - Net revenues increased primarily due to higher sales volumes for Sancuso (+$0.9M), Caldolor (+$0.7M, driven by international sales), Vibativ (+$0.2M), and Acetadote (+$0.2M), partially offset by a decrease in Kristalose sales (-$1.4M)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Cost of products sold increased by **17.56%**, and as a percentage of net revenues, rose from **17.4%** to **18.6%**, primarily due to higher international sales which typically incur higher cost of goods sold relative to revenue[123](index=123&type=chunk) - Research and development costs increased by **38.63%** due to variable costs associated with ongoing clinical initiatives for pipeline product candidates[125](index=125&type=chunk) Vibativ and Sancuso Contribution (Three Months Ended June 30) | Metric | Vibativ 2025 | Vibativ 2024 | Sancuso 2025 | Sancuso 2024 | | :------------------------ | :----------- | :----------- | :----------- | :----------- | | Net revenue | $2,701,854 | $2,454,481 | $3,119,110 | $2,188,776 | | Cost of products sold | $640,676 | $549,583 | $153,728 | $299,547 | | Royalty and operating expenses | $673,693 | $600,007 | $1,010,904 | $1,002,354 | | Contribution | $1,387,485 | $1,304,891 | $1,954,478 | $886,875 | [Results of Operations (Six Months Ended June 30, 2025 vs. 2024)](index=33&type=section&id=RESULTS%20OF%20OPERATIONS%20%28Six%20months%20ended%20June%2030,%202025%20compared%20to%20the%20six%20months%20ended%20June%2030,%202024%29) This section analyzes the company's financial performance for the six months ended June 30, 2025, compared to the prior year Key Financials (Six Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :------------ | :--------- | | Net revenues | $22,550,418 | $18,346,550 | $4,203,868 | +22.91% | | Cost of products sold | $3,437,103 | $3,286,486 | $150,617 | +4.58% | | Selling and marketing | $8,455,627 | $8,402,989 | $52,638 | +0.63% | | Research and development | $2,763,475 | $2,217,440 | $546,035 | +24.62% | | General and administrative | $5,337,930 | $5,125,055 | $212,875 | +4.15% | | Amortization | $2,011,814 | $2,210,518 | $(198,704) | -8.99% | | Operating income (loss) | $544,469 | $(2,895,938) | $3,440,407 | +118.80% | | Net income (loss) | $512,977 | $(3,005,109) | $3,518,086 | +117.07% | - Net revenues increased significantly, driven by a **$3.0 million** milestone payment in 'Other revenue' and increased sales of Sancuso (+$1.4M) and Caldolor (+$0.6M), partially offset by decreased Kristalose sales (-$1.1M)[131](index=131&type=chunk)[133](index=133&type=chunk)[135](index=135&type=chunk) - Research and development costs increased by **24.62%** due to continued funding of ongoing clinical initiatives for pipeline product candidates[137](index=137&type=chunk) - Amortization expense decreased by **8.99%** due to a reduction in the valuation of the Acetadote intangible asset recognized in December 2024[139](index=139&type=chunk) Vibativ and Sancuso Contribution (Six Months Ended June 30) | Metric | Vibativ 2025 | Vibativ 2024 | Sancuso 2025 | Sancuso 2024 | | :------------------------ | :----------- | :----------- | :----------- | :----------- | | Net revenue | $7,054,920 | $4,059,970 | $5,375,405 | $4,016,544 | | Cost of products sold | $889,117 | $826,646 | $297,704 | $556,125 | | Royalty and operating expenses | $1,184,369 | $1,078,480 | $1,940,721 | $1,530,051 | | Contribution | $4,981,434 | $2,154,844 | $3,136,980 | $1,930,368 | [Liquidity and Capital Resources](index=36&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's sources of liquidity, working capital, and capital expenditure plans - Primary liquidity sources are cash equivalents, cash flows from operations, and a revolving line of credit. Management believes these sources are adequate for future growth, business development, and capital expenditures[142](index=142&type=chunk) Liquidity and Working Capital | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $16,087,281 | $17,964,184 | | Working capital | $7,233,189 | $4,830,429 | | Current ratio | 1.3 | 1.2 | | Revolving line of credit availability | $14,759,267 | $4,723,830 | - Net cash provided by operating activities was **$4.7 million** for the six months ended June 30, 2025, a significant improvement from a net cash used of **$3.0 million** in the prior year[143](index=143&type=chunk)[144](index=144&type=chunk) - Cash used in financing activities totaled **$5.7 million**, primarily due to **$10.0 million** in line of credit payments and **$0.7 million** for contingent consideration, partially offset by **$5.3 million** from ATM offering proceeds[146](index=146&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of any off-balance sheet arrangements during the reported periods - The company did not engage in any off-balance sheet arrangements during the six months ended June 30, 2025 and 2024[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's exposure to market risks, including interest rate and foreign currency exchange risks - The company is exposed to interest rate risk on cash in money market accounts and its revolving credit facility but does not use derivative financial instruments to manage this exposure[150](index=150&type=chunk) - The interest rate on the revolving credit facility was **7.125%** at June 30, 2025, with **$5.2 million** outstanding. The company believes its interest rate risk is not material[152](index=152&type=chunk) - Foreign currency exchange risk is considered minimal, with immaterial gains and losses for the six months ended June 30, 2025 and 2024[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective as of June 30, 2025[154](index=154&type=chunk) - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025[155](index=155&type=chunk) [PART II – OTHER INFORMATION](index=38&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal, risk, and equity matters [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to disclosures regarding legal proceedings, indicating no material adverse effects are anticipated - Information on legal proceedings is incorporated by reference from Note 9 of the Financial Statements[157](index=157&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section directs investors to the company's Annual Report for a comprehensive discussion of risk factors - Risk factors are incorporated by reference from the company's Annual Report on Form 10-K for the year ended December 31, 2024[158](index=158&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase program and any unregistered sales of equity securities - The company has a **$10 million** share repurchase program, with approximately **$2.2 million** remaining available[159](index=159&type=chunk) Share Repurchase Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----- | :------------------------------- | :--------------------------- | | April | — | $— | | May | — | — | | June | 1,800 | $5.26 | | **Total** | **1,800** | | [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or modified by insiders - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the three months ended June 30, 2025[161](index=161&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL documents - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and INLINE XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[162](index=162&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report - The report was signed on August 8, 2025, by John Hamm, Chief Financial Officer and Duly Authorized Officer of Cumberland Pharmaceuticals Inc[167](index=167&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2025, net revenue from continuing operations was $10.8 million, representing a 10% increase over the prior year period [24] - Year-to-date revenues for the first six months totaled $22.6 million, a 23% increase compared to the same period last year [11][24] - Adjusted earnings for Q2 were $400,000, and for the first half of the year, adjusted earnings were $2.8 million or $0.18 per share, significantly up from the previous year [11][25] - The company generated $4.7 million in cash flow from operations during the first half of 2025 [11] Business Line Data and Key Metrics Changes - Revenue by product for Q2 included $2.8 million for Cristalose, $3.1 million for Sancuso, $2.7 million for Vibativ, and $1.6 million for Caldolor [24] - Year-to-date product revenue totaled $6.2 million for Cristalose, $4.1 million for Vibativ, $5.4 million for Sancuso, and $2.9 million for Caldolor [24] Market Data and Key Metrics Changes - The company announced the approval of Vibativ in China, providing access to the world's second-largest pharmaceutical market [10] - A partnership with Tabuk Pharmaceuticals was established to introduce Vibativ into the Middle East, with shipments already initiated [10] Company Strategy and Development Direction - The company is focused on building a portfolio of FDA-approved brands with strong safety and efficacy profiles [31] - There is an emphasis on expanding international contributions and pursuing new opportunities through the addition of new products [31] - The company is dedicated to addressing unmet medical needs through its clinical pipeline, particularly with the ifetroban product candidate [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing positive developments in clinical studies and product approvals [8][31] - The company is preparing for a meeting with the FDA to discuss the clinical program for ifetroban, which is seen as a potential treatment for DMD cardiomyopathy [9][31] Other Important Information - The company holds $68 million in total assets, including $16 million in cash and cash equivalents, with liabilities totaling $40 million [28] - Cumberland continues to hold over $52 million in tax net operating loss carryforwards, primarily from prior stock option exercises [29] Q&A Session Summary - No questions were raised during the Q&A session, and management expressed willingness to engage in private discussions with shareholders if desired [34][35]

Cumberland Pharmaceuticals Reports 23% Revenue Growth Year-to-Date NASHVILLE, Tenn. (Tuesday, August 5, 2025) – Cumberland Pharmaceuticals Inc. (Nasdaq: CPIX), a specialty pharmaceutical company, announced today that its product portfolio of FDA-approved brands delivered combined net revenues of $10.8 million during the second quarter of 2025, a 10% increase over the prior year period. Year-to-date revenues for the first six months of the year totaled $22.6 million, representing an increase of 23% over the ...

Core Insights - Cumberland Pharmaceuticals Inc. reported a strong financial performance with combined net revenues of $10.8 million in Q2 2025, marking a 10% increase year-over-year [1][12] - Year-to-date revenues reached $22.6 million, reflecting a 23% increase compared to the first half of 2024 [1][12] - The company ended the quarter with total assets of approximately $68 million and shareholders' equity of $28 million [2][14] Financial Performance - Q2 2025 net revenues included $2.8 million from Kristalose®, $3.1 million from Sancuso®, $2.7 million from Vibativ®, and $1.6 million from Caldolor® [12] - Total operating expenses for Q2 2025 were $11.6 million, leading to a net loss of approximately $741,000 for the quarter [13][33] - Year-to-date net income was approximately $516,000, with adjusted earnings of $2.8 million or $0.18 per diluted share [13][37] Product Developments - Cumberland announced the availability of the Vibativ 4-Vial Starter Pak through a new supply arrangement with Vizient Inc., enhancing access for healthcare providers [3][4] - A new pharmacokinetic analysis of Vibativ supports optimized dosing strategies for treating life-threatening gram-positive infections [5] - Breakthrough findings from the Phase II FIGHT DMD trial for ifetroban showed a 5.4% improvement in cardiac function in patients with Duchenne muscular dystrophy [6][7] Clinical Trials - Cumberland is conducting a Phase II clinical program for ifetroban in patients with Systemic Sclerosis, with enrollment completed [8] - The FIGHTING FIBROSIS™ trial is underway for patients with Idiopathic Pulmonary Fibrosis, with patient enrollment ongoing [9] - A study on Caldolor® demonstrated its safety and efficacy for managing post-operative pain in patients aged 60 and older [10][11] Balance Sheet - As of June 30, 2025, Cumberland had total assets of approximately $68 million, with $16 million in cash and cash equivalents [14][31] - Total liabilities were reported at $40 million, including $5 million on the company's credit facility [14][31] - Shareholders' equity stood at $28 million, reflecting a solid financial position [14][32]

Core Insights - Cumberland Pharmaceuticals Inc. announced the availability of the Vibativ® (telavancin) 4-Vial Starter Pak through a new contract with Vizient, enhancing access for healthcare providers [1][2][3] Group 1: Product Availability and Market Reach - Vizient serves over 65% of the nation's acute care providers, including 97% of academic medical centers and 35% of the non-acute market, facilitating increased access to Vibativ's new 4-vial configuration [2] - The Vibativ 4-Vial Starter Pak supports flexible treatment initiation in both inpatient and outpatient settings, aimed at improving patient care [2][3] Group 2: Product Information - Vibativ is an FDA-approved injectable antibiotic indicated for treating hospital-acquired and ventilator-associated bacterial pneumonia (HABP/VABP) and complicated skin and skin structure infections (cSSSI) caused by Gram-positive pathogens, including MRSA [4][6] - The product is available in both 4-vial and 12-vial configurations through various distribution channels for Vizient provider clients [4] Group 3: Clinical Efficacy - Vibativ has demonstrated significantly higher cure rates compared to vancomycin in treating HABP/VABP due to Gram-positive pathogens, supported by large multinational studies [7] - The drug exhibits in vitro potency and in vivo activity against a broad range of difficult-to-treat Gram-positive bacterial pathogens, including multidrug-resistant strains [7]

Company Update - Cumberland Pharmaceuticals Inc. will release its second quarter 2025 financial results and provide a company update on August 5, 2025, after market close [1] - A conference call is scheduled for August 5 at 4:30 p.m. Eastern Time to discuss the results and updates [1] Company Overview - Cumberland Pharmaceuticals is a specialty pharmaceutical company focused on developing, acquiring, and commercializing products for hospital acute care, gastroenterology, and oncology market segments [3] - The company has a portfolio of FDA-approved brands, including Acetadote®, Caldolor®, Kristalose®, Sancuso®, Vaprisol®, and Vibativ® [5] Clinical Programs - The company is conducting Phase II clinical programs evaluating its ifetroban product candidate for conditions such as Systemic Sclerosis, cardiomyopathy associated with Duchenne Muscular Dystrophy, and Idiopathic Pulmonary Fibrosis [3]

Core Insights - Cumberland Pharmaceuticals Inc. presented positive results from the Phase 2 FIGHT DMD trial for ifetroban, a novel oral therapy targeting Duchenne muscular dystrophy (DMD) heart disease, at the PPMD conference, indicating its potential to protect the heart and reduce cardiac damage in DMD patients [1][2][8] Group 1: Trial Results - The 12-month Phase 2 FIGHT DMD trial demonstrated a significant 5.4% improvement in left ventricular ejection fraction (LVEF) in patients treated with high-dose ifetroban compared to a control group [4] - High-dose ifetroban treatment was associated with reduced blood levels of cardiac damage markers (NT-proBNP and cardiac troponin I), while these markers increased in placebo-treated patients, suggesting ifetroban's potential to prevent ongoing cardiac injury [5] - All patients who completed the study opted to continue with the open-label extension, indicating confidence in the treatment [7] Group 2: Pharmacokinetics and Tolerability - The study revealed that DMD patients receiving higher doses of ifetroban achieved similar plasma levels to typical adults without evidence of drug accumulation, supporting the 300 mg daily dosing used in the high-dose group [6] - Ifetroban was well-tolerated with an acceptable pharmacokinetic profile in patients with DMD, despite the higher dosing requirements [6] Group 3: Market Potential and Regulatory Pathway - Ifetroban is positioned to address the leading cause of death in DMD patients, with no approved treatment specifically targeting DMD heart disease, highlighting a critical unmet medical need [9][10] - The company plans to analyze long-term treatment results and engage in discussions with the FDA regarding the regulatory pathway forward based on the trial's encouraging results [10]

Core Insights - The study published by Cumberland Pharmaceuticals demonstrates a 23% reduction in morphine use among older patients treated with Caldolor, indicating its efficacy and safety in pain management for this demographic [1][6][4] - The analysis highlights the unique challenges of pain management in older patients, who are often underrepresented in clinical trials, emphasizing the medical need for effective non-opioid analgesics [2][4] Study Details - The analysis involved a post-hoc subgroup analysis of data from four prospective clinical studies, including 591 patients from two placebo-controlled trials for efficacy and 1,041 patients for safety assessment [3] - Caldolor treatment resulted in a 24% reduction in pain at rest and a 20% reduction in pain with movement between 6 and 24 hours post-surgery compared to placebo [6] Safety Profile - The incidence of adverse events was significantly lower in patients treated with Caldolor (55%) compared to those receiving placebo (90%) in older patients [6] - No notable increases in gastrointestinal, renal, cardiovascular, or bleeding adverse events were observed with Caldolor treatment [6] Company Commitment - Cumberland Pharmaceuticals emphasizes its commitment to providing safe and effective pain management options, particularly for the growing aging population [5] - The company has previously published positive results regarding Caldolor's safety and pharmacokinetics in newborns, showcasing its dedication to expanding clinical applications across various age groups [5] Future Directions - Next steps for the company include outreach to healthcare providers to share the findings of this study, reinforcing the importance of Caldolor in multimodal analgesia regimens for older patients [7]

PART I – FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents Cumberland Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, operations, cash flows, and equity [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $69.9 million, liabilities reduced to $41.6 million, and equity increased to $28.3 million by Q1 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,108 | $17,964 | | Total current assets | $31,877 | $36,452 | | Total assets | $69,936 | $75,583 | | **Liabilities & Equity** | | | | Total current liabilities | $25,520 | $31,622 | | Revolving line of credit - long term | $5,241 | $10,176 | | Total liabilities | $41,595 | $53,037 | | Total equity | $28,341 | $22,546 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net income of $1.25 million on $11.7 million net revenues marks a significant turnaround from the prior year's loss Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenues | $11,713 | $8,498 | | Total costs and expenses | $10,421 | $10,367 | | Operating income (loss) | $1,292 | $(1,869) | | Net income (loss) | $1,248 | $(1,902) | | Diluted EPS | $0.08 | $(0.14) | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating activities provided $3.9 million cash, reversing a prior year use, resulting in a $2.9 million overall cash decrease Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $3,899 | $(2,137) | | Net cash used in investing activities | $(1,228) | $(58) | | Net cash provided by (used in) financing activities | $(5,526) | $2,422 | | Net (decrease) increase in cash | $(2,856) | $227 | - Financing activities in Q1 2025 included **$5.3 million** in net proceeds from an At-the-Market (ATM) offering and **$10.0 million** in payments on the line of credit[13](index=13&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies and financial statement items, including product revenues, inventory, lease, debt, and contingent liabilities Net Revenues by Product (in thousands) | Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Kristalose | $3,484 | $3,196 | | Sancuso | $2,256 | $1,828 | | Vibativ | $1,378 | $1,605 | | Caldolor | $1,307 | $1,471 | | Other revenue | $3,142 | $275 | | **Total net revenues** | **$11,713** | **$8,498** | - Other revenue in Q1 2025 includes a **$3.0 million** milestone payment related to the approval of Vibativ for the Chinese market[41](index=41&type=chunk) - On February 5, 2025, the Company issued 1,000,000 shares under an At-the-Market (ATM) program for an aggregate amount of **$5.5 million**[57](index=57&type=chunk) - As of March 31, 2025, the company had **$5.2 million** in borrowings outstanding under its revolving credit facility with Pinnacle Bank at an interest rate of **7.125%**[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025's profitability turnaround, driven by $11.7 million net revenue, outlining growth strategy and solid liquidity [Growth Strategy](index=23&type=section&id=Growth%20Strategy) The company's growth strategy focuses on maximizing existing brands, acquiring new ones, advancing its clinical pipeline, and building international partnerships - Cumberland's growth strategy includes: - Supporting and expanding the use of its marketed products - Selectively acquiring complementary brands and late-stage candidates - Progressing its clinical pipeline, including ifetroban Phase II programs - Leveraging infrastructure through co-promotion partnerships - Building an international business through a network of partners[90](index=90&type=chunk)[91](index=91&type=chunk) [Recent Developments](index=24&type=section&id=Recent%20Developments) Recent developments include Acetadote FDA approval, positive Caldolor and ifetroban study results, and Vibativ's China approval and Saudi launch - The FDA approved a supplemental New Drug Application for Acetadote, simplifying its dosing regimen to reduce medication errors[92](index=92&type=chunk)[93](index=93&type=chunk) - A new study of **150,000** patients showed Caldolor was associated with significantly reduced adverse drug reactions compared to ketorolac[94](index=94&type=chunk)[95](index=95&type=chunk) - The company announced positive top-line results from its Phase II study of ifetroban in patients with Duchenne muscular dystrophy (DMD)[97](index=97&type=chunk) - Vibativ received regulatory approval in China, and the company began shipping the product to Saudi Arabia for its launch[100](index=100&type=chunk)[101](index=101&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Net revenues for Q1 2025 increased by 38% to $11.7 million, primarily due to a $3.0 million Vibativ milestone, resulting in $1.3 million operating income Q1 2025 vs. Q1 2024 Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net revenues | $11,713 | $8,498 | $3,215 | | Cost of products sold | $1,426 | $1,576 | $(150) | | Operating income (loss) | $1,292 | $(1,869) | $3,161 | | Net income (loss) | $1,248 | $(1,902) | $3,151 | - The increase in Other Revenue from **$0.3 million** to **$3.1 million** was driven by a **$3 million** milestone payment for Vibativ's approval in China[116](index=116&type=chunk) - Sancuso revenue increased by **$0.4 million** due to increased shipments and lower sales deductions[115](index=115&type=chunk) Financial Contribution of Vibativ and Sancuso (in thousands) | Product Contribution | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Vibativ** | | | | Net Revenue* | $4,353 | $1,605 | | Contribution | $3,594 | $850 | | **Sancuso** | | | | Net Revenue | $2,256 | $1,828 | | Contribution | $1,183 | $1,043 | *Vibativ Q1 2025 Net Revenue includes a $2,975,000 milestone payment. [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sourced from cash, operations, and a revolving credit line, with working capital improving to $6.4 million and $15.1 million cash by Q1 2025 Liquidity and Working Capital Summary (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,108 | $17,964 | | Working capital | $6,358 | $4,830 | | Revolving line of credit availability | $14,759 | $4,724 | - Cash provided by operating activities was **$3.9 million** for Q1 2025, a significant improvement from a **$2.1 million** use of cash in Q1 2024[125](index=125&type=chunk)[126](index=126&type=chunk) - Cash used in financing activities was **$5.5 million**, primarily due to **$10.0 million** in payments on the line of credit, offset by **$5.3 million** in proceeds from an ATM offering[127](index=127&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on its variable-rate credit facility, with minimal foreign currency exchange risk due to primarily U.S. operations - The company is exposed to interest rate risk on its revolving credit facility, which is based on Term SOFR plus a spread. The applicable rate was **7.125%** at March 31, 2025, on **$5.2 million** of outstanding borrowings[133](index=133&type=chunk) - Foreign currency exchange risk is considered minimal as operations are primarily in the United States and exposure is limited[134](index=134&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[135](index=135&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal controls[136](index=136&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in litigation but does not expect a material adverse effect on its business or financial condition - The Company does not believe that the disposition or ultimate resolution of existing claims or lawsuits will have a material adverse effect on its business or financial condition[66](index=66&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section refers investors to the risk factors detailed in the Company's Annual Report on Form 10-K for 2024 - Investors are directed to consider the risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[139](index=139&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 53,837 shares for $0.2 million in Q1 2025 under its $10 million program, with $2.2 million remaining available - During Q1 2025, the Company repurchased **53,837** shares of common stock for approximately **$0.2 million**[55](index=55&type=chunk) Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | 15,770 | $2.51 | | February | — | — | | March | 38,067 | $5.36 | | **Total** | **53,837** | | - As of March 31, 2025, approximately **$2.2 million** remained available for future repurchases under the current program[55](index=55&type=chunk) [Other Information](index=33&type=section&id=Item%205.%20Other%20Information) Several officers and directors adopted Rule 10b5-1 trading plans to purchase company stock, effective March 2025 through year-end - The CEO and several directors adopted Rule 10b5-1 trading plans to purchase company stock, which became effective on March 3, 2025[142](index=142&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including employment agreements and CEO/CFO certifications - The report includes various exhibits, such as CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL data files[143](index=143&type=chunk)

Financial Data and Key Metrics Changes - The company reported combined revenues of $11.7 million for Q1 2025, representing a 38% increase compared to the prior year period [9] - Net profit for the quarter was $1.26 million, with adjusted earnings of $2.4 million and cash flow from operations of $3.9 million [9][27] - Total assets improved to $70 million, including $50 million in cash, while total liabilities decreased to $42 million [9][30] Business Line Data and Key Metrics Changes - Revenue breakdown for Q1 2025 included $3.5 million for Cristalos, $2.3 million for SANKUSO, $1.4 million for Vibativ, and $1.3 million for Caldolor [27] - The company launched new marketing initiatives and expanded its sales force to support its FDA-approved products [12][18] Market Data and Key Metrics Changes - The approval of Vibativ in China opens access to a significant pharmaceutical market, expected to enhance revenue opportunities [11] - The company is focusing on states with Medicaid coverage to boost Cristalos sales, seeing favorable impacts from formulary additions [16] Company Strategy and Development Direction - The company aims to support its FDA-approved portfolio through dedicated sales divisions and strategic marketing initiatives [33] - There is a focus on addressing antimicrobial resistance through Vibativ's unique dual mechanism of action [14][33] - The company is also exploring targeted acquisitions to create new opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing strong performance and positive developments in the pipeline [7][9] - The company is preparing for further data analysis and meetings with the FDA regarding its ifetroban product candidate for DMD [10][25] Other Important Information - The company continues to hold over $53 million in tax net operating loss carryforwards, primarily from prior stock option exercises [31] - A new digital marketing strategy is being implemented to enhance visibility and engagement for all marketed brands [19] Q&A Session Summary Question: Future growth prospects for Cumberland - Management highlighted the strong start to the year and the positive momentum across approved brands, expecting continued growth and progress in clinical pipelines [34] Question: Plans for shareholder engagement - Management indicated willingness to schedule private discussions with shareholders for further engagement [36]