Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Q4 2021 Earnings Conference Call March 8, 2022 4:30 PM ET Company Participants Molly Aggas - Account Supervisor, Dalton Agency A.J. Kazimi - Chief Executive Officer Todd Anthony - Vice President, Organizational Development John Hamm - Chief Financial Officer Conference Call Participants Operator Good afternoon. And thank you for joining Cumberland Pharmaceuticals 2021 Financial Report and Company Update. This call is being recorded at the company’s request and w ...

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Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Q3 2021 Results Earnings Conference Call November 9, 2021 4:30 PM ET Company Participants Molly Aggas - Senior Account Manager, Dalton Agency, IR A.J. Kazimi - Chairman and Chief Executive Officer Marty Cearnal - President and Chief Commercial Officer John Hamm - Chief Financial Officer Conference Call Participants Operator Thank you for joining the Cumberland Pharmaceuticals Third Quarter 2021 Financial Report and Company Update. This call is being recorded at ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Cumberland Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2021, including balance sheets, operations, cash flows, and equity [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$87.6 million** from **$96.5 million** at year-end 2020, while total liabilities decreased to **$40.9 million** and equity remained stable at **$46.6 million** Condensed Consolidated Balance Sheets (Unaudited) | | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $47,215,628 | $49,969,592 | | **Total assets** | **$87,570,774** | **$96,463,305** | | **Total current liabilities** | $17,945,483 | $25,667,446 | | **Total liabilities** | **$40,924,509** | **$49,589,911** | | **Total equity** | **$46,646,265** | **$46,873,394** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2021 net revenues decreased to **$8.1 million** with a **$1.6 million** net loss, while nine-month net revenues increased to **$27.7 million**, and net loss from continuing operations improved to **$1.2 million** due to debt forgiveness Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $8,072,540 | $9,250,689 | $27,665,182 | $27,179,600 | | **Operating Loss** | ($1,563,395) | ($1,208,686) | ($3,323,424) | ($4,635,649) | | **Other Income (PPP Loan Forgiveness)** | — | — | $2,187,140 | — | | **Net Loss from Continuing Operations** | ($1,583,480) | ($1,275,620) | ($1,209,545) | ($4,838,249) | | **Net Income (Loss) Attributable to Common Shareholders** | ($1,055,278) | ($481,737) | $340,110 | ($2,455,632) | | **Diluted EPS** | ($0.07) | ($0.03) | $0.02 | ($0.16) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$4.4 million** for the nine months ended September 30, 2021, with **$0.5 million** used in investing and **$2.8 million** in financing, resulting in a **$1.1 million** net increase in cash Cash Flow Summary for Nine Months Ended September 30 (Unaudited) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $4,382,763 | $4,561,140 | | **Net cash used in investing activities** | ($475,098) | ($1,441,768) | | **Net cash used in financing activities** | ($2,818,230) | ($4,685,477) | | **Net increase (decrease) in cash** | **$1,089,435** | **($1,566,105)** | | **Cash at end of period** | $25,843,231 | $26,646,530 | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity slightly decreased to **$46.6 million** as of September 30, 2021, influenced by **$0.3 million** net income, **$0.5 million** share-based compensation, and **$1.0 million** share repurchases Reconciliation of Total Equity (Unaudited) | Description | Amount | | :--- | :--- | | **Balance, December 31, 2020** | **$46,873,394** | | Share-based compensation | $517,081 | | Repurchase of common shares | ($1,025,679) | | Net income (loss) | $281,469 | | **Balance, September 30, 2021** | **$46,646,265** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies and financial statement items, including COVID-19 impact, discontinued operations, product revenue breakdown, inventory, debt, and Vibativ contingent consideration - The company focuses on acquiring, developing, and commercializing branded prescription products for hospital acute care, gastroenterology, and rheumatology[16](index=16&type=chunk) - Rights to Ethyol and Totect were returned to Clinigen as discontinued operations; Cumberland receives **$5 million** in quarterly payments over two years, with **$1.5 million** recognized in the first nine months of 2021[17](index=17&type=chunk)[61](index=61&type=chunk) Net Revenues by Product (Nine Months Ended Sep 30) | Product | 2021 Revenue | 2020 Revenue | | :--- | :--- | :--- | | Kristalose | $12,286,729 | $10,387,046 | | Vibativ | $8,799,891 | $8,551,125 | | Caldolor | $3,734,273 | $3,677,434 | | Vaprisol | $1,861,130 | $790,817 | | Acetadote | $638,704 | $1,527,173 | | Omeclamox-Pak | ($451,683) | $640,435 | - The company received full forgiveness of its **$2,187,140** Paycheck Protection Program (PPP) loan in June 2021, recorded as other income[50](index=50&type=chunk) - The contingent consideration liability for the Vibativ acquisition was **$6.9 million** as of September 30, 2021, down from **$8.2 million** at year-end 2020[57](index=57&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business overview, growth strategy, recent developments, and financial results, including COVID-19 impact, RediTrex launch, ifetroban trials, Omeclamox-Pak supply, liquidity, and the renewed **$15 million** line of credit [Overview and Growth Strategy](index=21&type=section&id=Overview%20and%20Growth%20Strategy) Cumberland is a specialty pharmaceutical company focused on hospital acute care, gastroenterology, and rheumatology, with a growth strategy encompassing product expansion, selective acquisitions, clinical pipeline advancement, and international partnerships - The company's portfolio includes **seven FDA-approved brands**: Acetadote, Caldolor, Kristalose, Omeclamox-Pak, RediTrex, Vaprisol, and Vibativ[71](index=71&type=chunk)[72](index=72&type=chunk) - Key growth strategies include supporting marketed products, selectively acquiring complementary brands, progressing the clinical pipeline for ifetroban, leveraging infrastructure through co-promotion, and building an international market[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Recent Developments](index=23&type=section&id=Recent%20Developments) Recent developments include the national launch of RediTrex in Q3 2021, resumed ifetroban clinical trials with a new PF-ILDs program, ongoing Omeclamox-Pak supply shortage, and the renewal of its **$15 million** line of credit - The national launch of RediTrex for arthritis and psoriasis was implemented in **Q3 2021** after pandemic delays[91](index=91&type=chunk) - A supply shortage for Omeclamox-Pak, declared October 14, 2020, persists due to packager financial difficulties, with operations currently suspended[104](index=104&type=chunk) - The company's **$15 million** line of credit with Pinnacle Bank was renewed on October 28, 2021, extending maturity to October 2024[109](index=109&type=chunk) - A new **Phase II** clinical program for ifetroban was approved to study its use in treating Progressive Fibrosing Interstitial Lung Diseases (PF-ILDs)[102](index=102&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q3 2021 net revenues decreased **12.8%** to **$8.1 million**, while nine-month net revenues increased **1.8%** to **$27.7 million**, with operating loss improving to **$3.3 million** and net loss narrowing due to cost management and PPP loan forgiveness Comparison of Three Months Ended September 30 | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $8,072,540 | $9,250,689 | ($1,178,149) | | **Operating Loss** | ($1,563,395) | ($1,208,686) | ($354,709) | | **Net Loss from Continuing Operations** | ($1,583,480) | ($1,275,620) | ($307,860) | Comparison of Nine Months Ended September 30 | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Net Revenues** | $27,665,182 | $27,179,600 | $485,582 | | **Operating Loss** | ($3,323,424) | ($4,635,649) | $1,312,225 | | **Net Loss from Continuing Operations** | ($1,209,545) | ($4,838,249) | $3,628,704 | - For the nine-month period, Kristalose revenue grew by **$1.9 million** and Vaprisol revenue grew by **$1.1 million**, while Omeclamox-Pak revenue declined by **$1.1 million** due to supply issues[122](index=122&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by **$25.8 million** in cash, **$29.3 million** working capital, **$4.4 million** operating cash flow, and a renewed **$15 million** revolving credit facility, bolstered by **$2.2 million** PPP loan forgiveness Working Capital Summary | Metric | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $25,843,231 | $24,753,796 | | Working capital | $29,270,145 | $24,302,146 | | Current ratio | 2.6 | 1.9 | - The net increase in cash for the nine months ended September 30, 2021, was **$1.1 million**, driven by **$4.4 million** from operations, offset by **$2.8 million** in financing and **$0.5 million** in investing[128](index=128&type=chunk) - The company renewed its revolving credit facility with Pinnacle Bank, providing up to **$15 million** in borrowing capacity until October 2024, with **$15.0 million** outstanding as of September 30, 2021[131](index=131&type=chunk)[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rates from its variable-rate revolving credit facility and foreign currency exchange rates, with foreign exchange risk considered minimal due to primarily U.S. operations - Interest rate risk is associated with the **$15.0 million** outstanding on the revolving credit facility, based on LIBOR plus a spread, with an applicable rate of **3.65%** at September 30, 2021[137](index=137&type=chunk) - Foreign currency exchange risk is deemed immaterial as the company operates mainly in the United States, with limited exposure from short invoice terms[138](index=138&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during Q3 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[139](index=139&type=chunk) - No material changes in internal control over financial reporting occurred during **Q3 2021**[139](index=139&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) No legal proceedings were reported - No legal proceedings were reported[142](index=142&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section directs investors to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - Investors are advised to consider the risk factors included in the Company's Annual Report on Form **10-K** for the year ended December 31, 2020[143](index=143&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details common stock repurchase activity for Q3 2021 under its **$10 million** program, with **76,408 shares** repurchased for approximately **$0.24 million**, leaving **$5.2 million** available Share Repurchases for Three Months Ended September 30, 2021 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July | 39,264 | $3.28 | | August | 24,424 | $2.98 | | September | 12,720 | $2.84 | | **Total** | **76,408** | | - As of September 30, 2021, approximately **$5.2 million** remained available for repurchase under the company's **$10 million** share repurchase program[39](index=39&type=chunk)[144](index=144&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Fifth Amendment to the Revolving Credit Loan Agreement and required CEO and CFO certifications - Key exhibits filed include the Fourth and Fifth Amendments to Revolving Credit Agreements, and CEO and CFO certifications pursuant to Sarbanes-Oxley Act sections **302** and **906**[146](index=146&type=chunk)

Cumberland Pharmaceuticals Reports Second Quarter 2021 Financial Results & Company Update August 10, 2021 Year-to-date net revenues up 9.3% NASHVILLE, Tenn., Aug. 10, 2021 /PRNewswire/ -- Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company, today is providing a company update and second quarter 2021 financial results. Net revenues from continuing operations during the quarter were $9.1 million and totaled $19.6 million for the first half of 2021. The company also recorded an a ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents Cumberland Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements, management's discussion, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Cumberland Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and equity, with detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This subsection provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2021 | December 31, 2020 | Change | | :----------------------------- | :-------------- | :------------------ | :----- | | Total Assets | $88,851,474 | $96,463,305 | ↓ $7,611,831 | | Total Liabilities | $41,043,067 | $49,589,911 | ↓ $8,546,844 | | Total Equity | $47,808,407 | $46,873,394 | ↑ $935,013 | | Cash and cash equivalents | $25,670,462 | $24,753,796 | ↑ $916,666 | | Revolving line of credit | $14,000,000 | $15,000,000 | ↓ $1,000,000 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This subsection outlines the company's financial performance over specific periods, including revenues, expenses, and net income or loss Net Income (Loss) Attributable to Common Shareholders | Period | 2021 | 2020 | Change | | :------------------------------------------ | :----------- | :----------- | :----------- | | Three months ended June 30 | $1,228,560 | $(918,275) | ↑ $2,146,835 | | Six months ended June 30 | $1,395,388 | $(1,973,895) | ↑ $3,369,283 | Net Revenues | Period | 2021 | 2020 | Change | | :----------------------- | :----------- | :----------- | :----------- | | Three months ended June 30 | $9,055,483 | $9,598,177 | ↓ $542,694 | | Six months ended June 30 | $19,592,642 | $17,928,911 | ↑ $1,663,731 | Operating Income (Loss) | Period | 2021 | 2020 | Change | | :----------------------- | :------------ | :------------ | :----------- | | Three months ended June 30 | $(1,435,729) | $(1,580,962) | ↑ $145,233 | | Six months ended June 30 | $(1,760,029) | $(3,426,963) | ↑ $1,666,934 | Other Income (PPP Loan Forgiveness) | Period | 2021 | 2020 | Change | | :----------------------- | :----------- | :----- | :----------- | | Three months ended June 30 | $2,187,140 | $0 | ↑ $2,187,140 | | Six months ended June 30 | $2,187,140 | $0 | ↑ $2,187,140 | Earnings (Loss) Per Share Attributable to Common Shareholders (Basic) | Period | 2021 | 2020 | Change | | :----------------------- | :--- | :---- | :----- | | Three months ended June 30 | $0.08 | $(0.06) | ↑ $0.14 | | Six months ended June 30 | $0.09 | $(0.13) | ↑ $0.22 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This subsection details the cash inflows and outflows from operating, investing, and financing activities over specific periods Cash Flow Summary (Six months ended June 30) | Activity | 2021 | 2020 | Change | | :------------------------------------------ | :----------- | :----------- | :----------- | | Net cash provided by operating activities | $4,484,770 | $3,704,071 | ↑ $780,699 | | Net cash used in investing activities | $(366,854) | $(773,014) | ↓ $406,160 | | Net cash used in financing activities | $(3,201,250) | $(3,769,955) | ↓ $568,705 | | Net increase (decrease) in cash and cash equivalents | $916,666 | $(838,898) | ↑ $1,755,564 | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This subsection presents changes in the company's total equity, reflecting net income, share repurchases, and other equity transactions Total Equity | Date | Amount | | :---------------- | :----------- | | June 30, 2021 | $47,808,407 | | December 31, 2020 | $46,873,394 | - Net income attributable to common shareholders for the six months ended June 30, 2021, was **$1,228,560**, contributing to the increase in equity[12](index=12&type=chunk) - Repurchase of common shares for the six months ended June 30, 2021, totaled **$(484,965)**[12](index=12&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements [Note 1: Organization and Basis of Presentation](index=8&type=section&id=(1)%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's business, operational segment, accounting policies, and the impact of the COVID-19 pandemic - Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on acquiring, developing, and commercializing branded prescription products for hospital acute care, gastroenterology, and rheumatology[15](index=15&type=chunk) - The company's products are manufactured by third parties and distributed through U.S. and international partners[15](index=15&type=chunk) - The company operates as one segment: specialty pharmaceutical products, with most assets and revenues in the United States[24](index=24&type=chunk) - The company returned exclusive rights to commercialize Ethyol and Totect in the U.S. to Clinigen in May 2019, reporting these operations as discontinued[16](index=16&type=chunk) - A revision to the prior period cash flow statement for life insurance policies had no net effect on operating cash flows or impact on operating results/balance sheet for 2020[17](index=17&type=chunk) - The COVID-19 pandemic impacted business due to reduced hospital admissions and elective surgeries, but a diversified product portfolio helped mitigate negative effects; future impact remains unquantifiable[21](index=21&type=chunk) - The company plans to adopt ASU No. 2016-13 and ASU 2019-05 (credit losses) on January 1, 2023, with no material impact expected on consolidated financial statements[22](index=22&type=chunk) - Significant accounting estimates include allowances for chargebacks, rebates, product returns, inventory obsolescence, and valuation of contingent consideration liability[23](index=23&type=chunk) [Note 2: Earnings (Loss) Per Share](index=11&type=section&id=(2)%20EARNINGS%20(LOSS)%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share, including the impact of outstanding securities Earnings (Loss) Per Share Attributable to Common Shareholders (Basic) | Period | 2021 | 2020 | | :----------------------- | :--- | :---- | | Three months ended June 30 | $0.08 | $(0.06) | | Six months ended June 30 | $0.09 | $(0.13) | - Dilutive effect of other securities included **133,212 shares** for Q2 2021 and **201,348 shares** for YTD Q2 2021[26](index=26&type=chunk) - **198,300 restricted stock awards and options** were outstanding but excluded from diluted EPS as of June 30, 2021, due to their antidilutive effect[26](index=26&type=chunk) [Note 3: Revenues](index=12&type=section&id=(3)%20REVENUES) This note provides a breakdown of net revenues by product for the reported periods, highlighting key changes and factors Net Revenues by Product (Three months ended June 30) | Product | 2021 | 2020 | Change | | :-------------- | :---------- | :---------- | :---------- | | Kristalose | $5,275,065 | $3,477,471 | ↑ $1,797,594 (51.7%) | | Vibativ | $1,844,936 | $3,299,507 | ↓ $1,454,571 | | Caldolor | $938,328 | $1,166,569 | ↓ $228,241 | | Vaprisol | $399,952 | $174,159 | ↑ $225,793 | | Acetadote | $152,781 | $595,310 | ↓ $442,529 | | Omeclamox-Pak | $(24,109) | $10,948 | ↓ $35,057 | | RediTrex | $7,382 | $0 | ↑ $7,382 | Net Revenues by Product (Six months ended June 30) | Product | 2021 | 2020 | Change | | :-------------- | :---------- | :---------- | :---------- | | Kristalose | $8,269,443 | $6,771,433 | ↑ $1,498,010 | | Vibativ | $6,897,179 | $5,721,708 | ↑ $1,175,471 (20.5%) | | Caldolor | $2,477,824 | $2,261,286 | ↑ $216,538 | | Vaprisol | $1,534,216 | $382,016 | ↑ $1,152,200 | | Acetadote | $269,972 | $1,308,711 | ↓ $1,038,739 | | Omeclamox-Pak | $(474,371) | $124,371 | ↓ $598,742 | | RediTrex | $(24,870) | $0 | ↓ $24,870 | - Omeclamox-Pak revenue was negatively impacted by product returns and the company being out of commercial inventory due to the packager's financial difficulties[30](index=30&type=chunk)[119](index=119&type=chunk)[124](index=124&type=chunk) - Other revenues include payments from international partners for product commercialization and federal grant funding, totaling approximately **$0.2 million** (Q2 2021) and **$0.5 million** (Q2 2020) from grants[31](index=31&type=chunk) [Note 4: Inventories](index=12&type=section&id=(4)%20INVENTORIES) This note details the composition of inventories, including raw materials, work in process, finished goods, and non-current classifications Net Inventories | Category | June 30, 2021 | December 31, 2020 | | :-------------------------------- | :-------------- | :------------------ | | Raw materials and work in process | $14,156,248 | $16,223,162 | | Consigned inventory | $189,141 | $128,005 | | Finished goods | $5,639,596 | $5,943,732 | | Total inventories | $19,984,985 | $22,294,899 | | Less non-current inventories | $(9,880,766) | $(11,656,742) | | Total inventories classified as current | $10,104,219 | $10,638,157 | - The company recognized cumulative net realizable value charges for potential obsolescence and discontinuance losses of approximately **$0.3 million** at June 30, 2021, and **$0.2 million** at December 31, 2020[34](index=34&type=chunk) - Non-current inventory primarily includes Vibativ and ifetroban API and finished goods[35](index=35&type=chunk) [Note 5: Leases](index=14&type=section&id=(5)%20LEASES) This note outlines the company's lease assets and liabilities, including right-of-use assets, lease terms, and related expenses Lease Assets and Liabilities | Category | June 30, 2021 | December 31, 2020 | | :-------------------------------- | :-------------- | :------------------ | | Operating lease right-of-use assets | $1,535,556 | $2,028,148 | | Operating lease current liabilities | $1,067,880 | $1,016,779 | | Operating lease noncurrent liabilities | $512,324 | $1,059,693 | | Total Lease Liabilities | $1,580,204 | $2,076,472 | - The weighted-average remaining lease term at June 30, 2021, is **1.5 years**, with a weighted-average incremental borrowing rate of **7.42%**[37](index=37&type=chunk) Rent Expense and Sublease Income (Six months ended June 30) | Category | 2021 | 2020 | | :-------------- | :--------- | :--------- | | Rent expense | $605,130 | $571,399 | | Sublease income | $348,411 | $323,489 | [Note 6: Shareholders' Equity and Debt](index=15&type=section&id=(6)%20SHAREHOLDERS'%20EQUITY%20AND%20DEBT) This note details changes in shareholders' equity, share repurchase programs, debt agreements, and the PPP loan forgiveness - The company has a **$10 million** share repurchase program, with approximately **$5.4 million** remaining as of June 30, 2021. During the six months ended June 30, 2021, **250,129 shares** were repurchased for approximately **$0.8 million**[39](index=39&type=chunk) - During the six months ended June 30, 2021, the company issued **36,850 restricted shares** and **173,350 incentive stock options** to employees and directors[40](index=40&type=chunk) - The revolving credit facility with Pinnacle Bank was amended, extending its maturity to October 1, 2022, and providing up to **$15 million** in borrowing capacity (with an option to increase to **$20 million**). **$14.0 million** was outstanding as of June 30, 2021[41](index=41&type=chunk) - The **$2,187,140** Paycheck Protection Program (PPP) loan received in April 2020 was fully forgiven by the SBA on June 11, 2021, and recorded as other income[48](index=48&type=chunk) - Cumberland entered into a joint venture with WinHealth Investment (Singapore) Ltd, creating WHC Biopharmaceuticals, Pte. Ltd., for Asian markets, contributing a **$0.2 million** convertible note[49](index=49&type=chunk) [Note 7: Income Taxes](index=16&type=section&id=(7)%20INCOME%20TAXES) This note provides information on the company's income tax position, including federal net operating loss carryforwards - As of June 30, 2021, the company has approximately **$56.5 million** in federal net operating loss carryforwards, including **$44.1 million** from nonqualified stock options, expected to significantly offset future income tax obligations[50](index=50&type=chunk) [Note 8: Collaborative Agreements](index=16&type=section&id=(8)%20COLLABORATIVE%20AGREEMENTS) This note describes the company's collaborative arrangements with research institutions, primarily funded by federal grants - Cumberland participates in collaborative arrangements with research institutions, primarily funded by federal grants, to identify product candidates. Expenses are included in R&D, and grant funding is recorded as net revenues[51](index=51&type=chunk) [Note 9: Additions and Return of Product Rights](index=18&type=section&id=(9)%20ADDITIONS%20AND%20RETURN%20OF%20PRODUCT%20RIGHTS) This note details the acquisition of product rights for Vibativ and RediTrex, and the return of rights for Ethyol and Totect - In November 2018, Cumberland acquired global rights for Vibativ, an injectable anti-infective, for **$20.0 million** upfront and a **$5.0 million** milestone payment. A contingent consideration liability of **$7.4 million** for future royalties was recognized as of June 30, 2021[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - RediTrex, an injectable methotrexate product, received FDA approval in November 2019, with a national launch planned for late September 2021. A **$1.0 million** milestone payment is due to Nordic in 2022[56](index=56&type=chunk) - Cumberland returned exclusive U.S. commercialization rights for Ethyol and Totect to Clinigen in May 2019, receiving **$5 million** in financial consideration. **$1.0 million** was recorded as discontinued operations revenue during the six months ended June 30, 2021[59](index=59&type=chunk)[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%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, liquidity, capital resources, and critical accounting policies - This section contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially[64](index=64&type=chunk) [OVERVIEW](index=21&type=section&id=OVERVIEW) This subsection provides a general introduction to the company's business model, strategic focus, and product portfolio [Our Business](index=21&type=section&id=Our%20Business) This subsection describes Cumberland Pharmaceuticals Inc.'s core business as a specialty pharmaceutical company and its target markets - Cumberland Pharmaceuticals Inc. is a specialty pharmaceutical company focused on acquiring, developing, and commercializing branded prescription products[66](index=66&type=chunk) - Primary target markets include hospital acute care, gastroenterology, and rheumatology[67](index=67&type=chunk) - The company's portfolio includes seven FDA-approved brands: Acetadote, Caldolor, Kristalose, Omeclamox-Pak, RediTrex, Vaprisol, and Vibativ[68](index=68&type=chunk) - Phase II clinical programs are underway for ifetroban in cardiomyopathy associated with Duchenne Muscular Dystrophy, Systemic Sclerosis, and Aspirin-Exacerbated Respiratory Disease[69](index=69&type=chunk) [Growth Strategy](index=22&type=section&id=Growth%20Strategy) This subsection outlines the company's strategic initiatives for growth, including brand maximization, acquisitions, and pipeline development - Growth strategy involves maximizing existing brands, expanding their use through clinical data and label expansion (e.g., pediatric approval for Acetadote and Caldolor)[75](index=75&type=chunk) - The company actively seeks to acquire complementary, under-promoted, FDA-approved drugs or late-stage development candidates with valuable intellectual property[76](index=76&type=chunk) - Progressing its clinical pipeline with ifetroban Phase II programs and early-stage drug development at Cumberland Emerging Technologies (CET)[77](index=77&type=chunk) - Leveraging commercial infrastructure through co-promotion partnerships (e.g., Kristalose with Poly Pharmaceuticals and Foxland Pharmaceuticals)[78](index=78&type=chunk) - Building an international market network to register and make products available globally[79](index=79&type=chunk) - Committed to financial discipline, managing expenses in line with revenues to deliver positive cash flow[80](index=80&type=chunk) [RECENT DEVELOPMENTS](index=23&type=section&id=RECENT%20DEVELOPMENTS) This subsection highlights significant recent events and updates impacting the company's operations and financial performance [COVID-19 Pandemic](index=23&type=section&id=COVID-19%20Pandemic) This subsection discusses the company's response to and the impact of the COVID-19 pandemic on its operations and product performance - The company successfully navigated the COVID-19 pandemic, maintaining operations and employee safety despite challenges like reduced hospital admissions and elective surgeries[84](index=84&type=chunk)[87](index=87&type=chunk) - While some brands were negatively impacted, a diversified product portfolio, including Vaprisol, delivered strong performance[86](index=86&type=chunk) [ESG Report](index=23&type=section&id=ESG%20Report) This subsection details the company's commitment to environmental, social, and governance (ESG) matters, including patient care and workforce diversity - Cumberland released its second annual Sustainability Report in July 2021, detailing its commitment to environmental, social, and governance (ESG) matters[88](index=88&type=chunk) - In 2020, the company provided nearly **2.5 million patient doses**, had no product recalls, and no FDA safety alerts or clinical trial terminations due to poor standards[89](index=89&type=chunk) - Initiatives include product serialization to prevent counterfeit drugs and coupon programs covering up to **90%** of patient prescription costs for gastrointestinal products[90](index=90&type=chunk) - The workforce is **46% women** and **18% minorities**[91](index=91&type=chunk) [New Chief Financial Officer Appointment](index=24&type=section&id=New%20Chief%20Financial%20Officer%20Appointment) This subsection announces the appointment of John Hamm as the new Chief Financial Officer, highlighting his experience - John Hamm was appointed as the new Senior Director Finance & Accounting and Chief Financial Officer on May 17, 2021, bringing over **25 years** of finance and accounting experience, including **20 years** in healthcare[93](index=93&type=chunk)[94](index=94&type=chunk) [Paycheck Protection Program](index=24&type=section&id=Paycheck%20Protection%20Program) This subsection details the full forgiveness of the PPP loan and its role in supporting the company's operations during the pandemic - The **$2,187,140** Paycheck Protection Program (PPP) loan received in April 2020 was fully forgiven by the SBA on June 11, 2021[97](index=97&type=chunk)[100](index=100&type=chunk) - The loan funds were used for qualifying expenses, enabling the company to avoid employee layoffs or furloughs during the pandemic[98](index=98&type=chunk)[99](index=99&type=chunk) [RediTrex Launch](index=24&type=section&id=RediTrex%20Launch) This subsection provides an update on the FDA approval and planned national launch of the RediTrex product - RediTrex, a new line of pre-filled methotrexate syringes, received FDA approval in December 2019[102](index=102&type=chunk) - Initial shipments began in November 2020, with a national launch planned for late September 2021[102](index=102&type=chunk) [Ifetroban Phase II Studies](index=24&type=section&id=Ifetroban%20Phase%20II%20Studies) This subsection describes the ongoing Phase II clinical programs for ifetroban and the impact of COVID-19 on enrollment - Cumberland is sponsoring Phase II clinical programs for ifetroban in cardiomyopathy associated with Duchenne Muscular Dystrophy, Systemic Sclerosis, and Aspirin-Exacerbated Respiratory Disease[103](index=103&type=chunk) - Enrollment in clinical studies was interrupted by COVID-19 but has resumed, with results pending to determine the best development path[107](index=107&type=chunk) [New Hospital Product Candidate](index=25&type=section&id=New%20Hospital%20Product%20Candidate) This subsection introduces a new cholesterol-reducing agent for hospital use, detailing its preclinical and early-stage clinical development - The company has completed preclinical, Phase I, and Phase II studies for a new cholesterol-reducing agent for hospital use, showing favorable safety and pharmacokinetic profiles[108](index=108&type=chunk)[109](index=109&type=chunk) [Omeclamox-Pak Supply Update](index=25&type=section&id=Omeclamox-Pak%20Supply%20Update) This subsection provides an update on the supply status of Omeclamox-Pak, noting a commercial inventory shortage - Omeclamox-Pak is currently out of commercial inventory due to the packager's financial difficulties and suspended operations; the FDA has been informed of the shortage[110](index=110&type=chunk) [Generic IV Acetaminophen](index=25&type=section&id=Generic%20IV%20Acetaminophen) This subsection discusses the increased competition for Caldolor due to the launch of generic IV acetaminophen products - Four generic companies have launched IV acetaminophen products, increasing competition for Cumberland's Caldolor in acute surgical pain treatment[111](index=111&type=chunk) [Summary (Recent Developments)](index=25&type=section&id=Summary) This subsection summarizes how the company's diversified strategy has enabled adaptation and positioned it for future opportunities despite challenges - Despite pandemic challenges, Cumberland's diversified product line and multi-faceted strategy (development and acquisitions) have enabled it to adapt and position itself for future opportunities[112](index=112&type=chunk) [CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES](index=26&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGMENTS%20AND%20ESTIMATES) This subsection highlights the key accounting estimates and judgments essential for financial reporting, including revenue recognition and inventory valuation - Key accounting estimates and judgments are critical for revenue recognition, inventories, fair value of contingent consideration liability, share-based compensation, and intangible assets[115](index=115&type=chunk) [RESULTS OF OPERATIONS](index=27&type=section&id=RESULTS%20OF%20OPERATIONS) This subsection provides a detailed analysis of the company's financial performance, comparing revenues and expenses across reporting periods [Three months ended June 30, 2021 compared to the three months ended June 30, 2020](index=27&type=section&id=Three%20months%20ended%20June%2030,%202021%20compared%20to%20the%20three%20months%20ended%20June%2030,%202020) This subsection compares the company's financial results for the three months ended June 30, 2021, against the same period in 2020 Net Revenues (Q2 2021 vs. Q2 2020) | Metric | 2021 | 2020 | Change | | :-------------- | :---------- | :---------- | :---------- | | Total Net Revenues | $9,055,483 | $9,598,177 | ↓ $542,694 (5.6%) | | Kristalose | $5,275,065 | $3,477,471 | ↑ $1,797,594 (51.7%) | | Vaprisol | $399,952 | $174,159 | ↑ $225,793 | | Vibativ | $1,844,936 | $3,299,507 | ↓ $1,454,571 | | Acetadote | $152,781 | $595,310 | ↓ $442,529 | | Omeclamox-Pak | $(24,109) | $10,948 | ↓ $35,057 | - Cost of products sold decreased by **$0.9 million** to **$1.7 million** (**19.2%** of net revenues) in Q2 2021, down from **27.2%** in Q2 2020, primarily due to changes in product sales mix and lower Vibativ sales[119](index=119&type=chunk) - Selling and marketing expense increased by **$0.3 million** in Q2 2021 due to increased marketing for RediTrex and Vibativ, partially offset by lower royalty costs[119](index=119&type=chunk) - Operating loss improved to **$(1.4) million** in Q2 2021 from **$(1.6) million** in Q2 2020, and net income from continuing operations was **$0.7 million**, significantly impacted by **$2.187 million** in other income from PPP loan forgiveness[117](index=117&type=chunk) [Six months ended June 30, 2021 compared to the six months ended June 30, 2020](index=30&type=section&id=Six%20months%20ended%20June%2030,%202021%20compared%20to%20the%20six%20months%20ended%20June%2030,%202020) This subsection compares the company's financial results for the six months ended June 30, 2021, against the same period in 2020 Net Revenues (YTD Q2 2021 vs. YTD Q2 2020) | Metric | 2021 | 2020 | Change | | :-------------- | :---------- | :---------- | :---------- | | Total Net Revenues | $19,592,642 | $17,928,911 | ↑ $1,663,731 (9.3%) | | Kristalose | $8,269,443 | $6,771,433 | ↑ $1,498,010 | | Vibativ | $6,897,179 | $5,721,708 | ↑ $1,175,471 (20.5%) | | Vaprisol | $1,534,216 | $382,016 | ↑ $1,152,200 | | Acetadote | $269,972 | $1,308,711 | ↓ $1,038,739 | | Omeclamox-Pak | $(474,371) | $124,371 | ↓ $598,742 | - Research and development costs decreased by **$0.5 million** to **$2.6 million** in YTD Q2 2021, primarily due to decreased study activity and salaries, offset by increased consulting fees[124](index=124&type=chunk) - Operating loss significantly improved to **$(1.8) million** in YTD Q2 2021 from **$(3.4) million** in YTD Q2 2020, with net income from continuing operations turning positive at **$0.4 million**, largely due to the **$2.187 million** PPP loan forgiveness[121](index=121&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=32&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This subsection discusses the company's ability to meet its short-term and long-term financial obligations, including cash flow and debt [Working Capital](index=32&type=section&id=Working%20Capital) This subsection analyzes the company's working capital position, cash flow activities, and their impact on liquidity Liquidity and Working Capital | Metric | June 30, 2021 | December 31, 2020 | | :------------------------------------------ | :-------------- | :------------------ | | Cash and cash equivalents | $25,670,462 | $24,753,796 | | Working capital (current assets less current liabilities) | $28,033,715 | $24,302,146 | | Current ratio (multiple of current assets to current liabilities) | 2.5 | 1.9 | | Revolving line of credit availability | $1,000,000 | $0 | - Net cash provided by operating activities for the six months ended June 30, 2021, was **$4.5 million**, positively impacted by decreases in inventory (**$2.3 million**) and accounts receivable (**$3.2 million**), and non-cash expenses (**$2.8 million**)[127](index=127&type=chunk) - Cash used in investing activities was **$(0.4) million**, primarily for additions to intangibles and a note receivable investment funding for the WHC JV[127](index=127&type=chunk) - Cash used in financing activities was **$(3.2) million**, including **$0.8 million** for common stock repurchases and **$1.4 million** for Vibativ royalty payments[127](index=127&type=chunk) [Debt Agreement](index=33&type=section&id=Debt%20Agreement) This subsection details the terms of the company's revolving credit facility and its compliance with financial covenants - The revolving credit loan agreement with Pinnacle Bank was extended to October 1, 2022, providing up to **$15 million** in borrowing capacity, with an option to increase to **$20 million**[130](index=130&type=chunk) - The company was in compliance with the Tangible Capital Ratio financial covenant as of June 30, 2021[130](index=130&type=chunk) [Paycheck Protection Program Loan](index=33&type=section&id=Paycheck%20Protection%20Program%20Loan) This subsection provides an update on the full forgiveness of the PPP loan and its contribution to the company's financial stability - The **$2,187,140** PPP loan received in April 2020 was fully forgiven by the SBA on June 11, 2021, after being used for qualifying expenses like payroll and rent[131](index=131&type=chunk)[132](index=132&type=chunk) - The loan helped the company avoid employee layoffs or furloughs during the COVID-19 pandemic[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, specifically interest rate risk and exchange rate risk. The company believes its exposure to these risks is minimal and does not utilize derivative financial instruments for hedging [Interest Rate Risk](index=34&type=section&id=Interest%20Rate%20Risk) This subsection describes the company's exposure to interest rate fluctuations on its cash equivalents and revolving credit facility - The company is exposed to interest rate risk on its cash equivalents and revolving credit facility but does not use derivative financial instruments to manage this exposure[134](index=134&type=chunk) - The interest rate on the revolving credit facility is based on LIBOR plus a spread of **1.75% to 2.75%** (minimum LIBOR **0.90%**), with **$14.0 million** outstanding at June 30, 2021[134](index=134&type=chunk) [Exchange Rate Risk](index=34&type=section&id=Exchange%20Rate%20Risk) This subsection addresses the company's minimal exposure to foreign currency exchange rate fluctuations from international transactions - The company has minimal exposure to foreign currency risk, primarily from purchases with short invoice terms (**30-90 days**)[135](index=135&type=chunk) - Foreign currency exchange gains and losses were immaterial for the periods presented, and a **5%** change in exchange rates would not materially affect operating results or financial condition[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021. No material changes to internal control over financial reporting occurred during the quarter - The company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2021[136](index=136&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2021[136](index=136&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report for the period - No legal proceedings were reported for the period[139](index=139&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Investors are directed to review the comprehensive risk factors outlined in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - Investors should consider the risk factors included in the company's Annual Report on Form 10-K for the year ended December 31, 2020[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase program. During the three months ended June 30, 2021, the company repurchased 158,405 shares, with approximately $5.4 million remaining under the program - The company has a **$10 million** share repurchase program, with approximately **$5.4 million** remaining as of June 30, 2021[141](index=141&type=chunk) Shares Purchased (Three months ended June 30, 2021) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----- | :------------------------------- | :--------------------------- | | April | 25,977 | $3.03 | | May | 38,459 | $2.84 | | June | 93,969 | $3.16 | | Total | 158,405 | - | [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including employment agreements, certifications from the CEO and CFO, and various XBRL documents - Exhibits include employment agreements, certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Sarbanes-Oxley Act), and various INLINE XBRL documents[143](index=143&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) The report was officially signed on behalf of Cumberland Pharmaceuticals Inc. by John Hamm, Chief Financial Officer, on August 13, 2021 - The report was signed by John Hamm, Chief Financial Officer and Duly Authorized Officer, on August 13, 2021[148](index=148&type=chunk)

Financial Data and Key Metrics Changes - The combined net revenues from the portfolio of FDA-approved brands totaled $9.1 million during Q2 2021, a slight decline from the prior year period, but net revenues for the first six months of 2021 were $19.6 million, up 9.3% compared to the same period in 2020 [13][44] - The company posted a profit of $1.4 million during the first half of 2021, a significant turnaround from the $2 million loss during the same period last year [16] - Cash flow from operations totaled $4.5 million year-to-date, up from $3.7 million in the first half of last year [16][46] - Total operating expenses for Q2 2021 were $10.5 million, down from $11.2 million during the prior year period [46] Business Line Data and Key Metrics Changes - Kristalose generated $5.3 million in revenue during Q2 2021, with a total of $8.3 million for the first half of the year, reflecting a 22% increase over the same period last year [15][45] - Vibativ sales grew 21% over the same period last year, contributing $1.8 million in Q2 2021 and $6.9 million in the first half of 2021 [26][45] - Caldolor generated $0.9 million in Q2 2021 and $2.5 million in the first half of 2021 [44][45] - Vaprisol contributed $0.4 million in Q2 2021 and $1.5 million in the first half of 2021 [44][45] Market Data and Key Metrics Changes - The company continues to face headwinds due to the pandemic, impacting several brands, but has a diversified product portfolio that has shown strong performance [11][12] - The performance of key promoted brands has continued to show favorable prescription trends, although reported revenues can fluctuate due to wholesaler buying patterns [14] Company Strategy and Development Direction - The company is focused on building a diversified portfolio of innovative products through a multifaceted strategy that includes the development of new candidates and the acquisition of established brands [57] - The company is preparing for the launch of RediTrex, a new line of injectable methotrexate products, with a full national launch scheduled for late September 2021 [40][58] - Cumberland is also sponsoring three key Phase II clinical programs for its ifetroban product candidates, targeting large potential markets [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced during the pandemic but expressed optimism about the company's ability to deliver meaningful revenue growth in 2021 [56][59] - The company remains dedicated to advancing patient care and delivering high-quality medicines, adapting market strategies and promotional activities to support customers and patients [59] Other Important Information - The company reported total assets of $88.9 million, liabilities of $41 million, and shareholders' equity of $48 million as of June 30, 2021 [50] - The company received a paycheck protection loan of $2.2 million, which was fully forgiven, allowing the company to avoid layoffs during the pandemic [51][52] Q&A Session Summary - No specific questions or answers were documented in the provided content, as the call concluded with an invitation for private discussions with management [60][61]

Business Focus and Product Development - Cumberland Pharmaceuticals focuses on acquiring, developing, and commercializing branded prescription products in hospital acute care, gastroenterology, and rheumatology markets[66]. - The company has seven FDA-approved products, including Acetadote and Caldolor, and is expanding its portfolio through clinical trials and acquisitions[69]. - Cumberland's ifetroban product candidates are undergoing Phase II clinical programs for conditions such as Duchenne Muscular Dystrophy and Systemic Sclerosis[93]. - Cumberland is exploring new product development opportunities, including a cholesterol-reducing agent for hospital use, which has completed Phase I and II studies[97][98]. - The company is actively pursuing international partnerships to expand the availability of its products in global markets[75]. Financial Performance - Net revenues for the three months ended March 31, 2021, were $10.5 million, an increase of $2.2 million (26.5%) compared to $8.3 million for the same period in 2020[103]. - Vibativ revenue increased by $2.6 million (108%) to $5.1 million for the three months ended March 31, 2021, driven by increased net pricing and improved sales volumes[103]. - Caldolor revenue rose by $0.4 million (40.4%) to $1.5 million, attributed to increased international shipments and improved net pricing[105]. - Operating income improved by $1.5 million, resulting in a loss of $324,300 for the first quarter of 2021 compared to a loss of $1.8 million in the same period last year[103]. - Cash provided by operating activities was $1.8 million for the three months ended March 31, 2021, compared to $0.9 million in the same period last year[109]. Cost Management and Expenses - Cost of products sold was $2.4 million for Q1 2021, representing 22.9% of net revenues, up from 19.6% in Q1 2020[105]. - General and administrative expenses increased to $2.2 million from $2.0 million, primarily due to higher professional, legal, and insurance costs[105]. Financial Position and Liquidity - The company had approximately $44 million of net operating loss carryforwards as of March 31, 2021, expected to offset future income tax obligations[107]. - Working capital increased to $26.5 million as of March 31, 2021, compared to $24.3 million as of December 31, 2020[109]. - The current ratio improved to 2.2 as of March 31, 2021, compared to 1.9 as of December 31, 2020[109]. - The company entered into a Fourth Amendment to the Revolving Credit Loan Agreement with Pinnacle Bank, extending the maturity date through October 1, 2022, with a principal available for borrowing of up to $15 million, potentially expandable to $20 million[112]. - As of March 31, 2021, the company had $15.0 million in borrowings outstanding under its revolving credit facility, with an applicable interest rate of 3.65%[116]. COVID-19 Response - The company received a Paycheck Protection Program loan of $2,187,140 to maintain payroll and operations during the COVID-19 pandemic[88]. - The company received a Paycheck Protection Program loan of $2,187,140 from Pinnacle Bank, which was used for qualifying expenses, and has not laid off or furloughed any employees due to the COVID-19 pandemic[113][114]. - Cumberland's Vibativ product has been used to treat COVID-19 patients with secondary bacterial pneumonia, demonstrating its effectiveness in critical care settings[84]. Risk Management - The interest rate spread under the Fourth Amendment of the Pinnacle Agreement is between 1.75% to 2.75% above LIBOR, with a minimum LIBOR of 0.90%[116]. - The company believes its interest rate risk related to cash and cash equivalents is not material, and current interest rates do not expose it to significant downside risk[116]. - The company does not utilize financial instruments to hedge foreign currency fluctuations, and its exposure is considered minimal[117]. - Foreign currency exchange gains and losses were immaterial for the three months ended March 31, 2021, and a 5% change in exchange rates would not materially affect operating results[117]. - The company was in compliance with the Tangible Capital Ratio financial covenant as of March 31, 2021, and expects to maintain compliance in future periods[112].

CUMBERLAND® PHARMACE UTICALS Corporate Presentation Nasdaq CPIX Safe Harbor Statement This presentation contains forward-looking statements concerning our approved products and product development, our technology, our competitors, our intellectual property, our financial condition and our plans for research and development programs that involve risks, uncertainties and assumptions. These statements are based on the current estimates and assumptions of the management of Cumberland Pharmaceuticals as of the d ...

Cumberland Pharmaceuticals, Inc. (NASDAQ:CPIX) Q1 2021 Earnings Conference Call May 11, 2021 4:30 PM ET Corporate Participants Erin Gull - Corporate Relations Manager A. J. Kazimi - Chairman and Chief Executive Officer Marty Cearnal - President and Chief Commercial Officer Michael Bonner - Chief Financial Officer Conference Call Participants Operator Thank you for joining Cumberland Pharmaceuticals First Quarter 2021 Financial Report and Company Update. This call is being recorded at the company's request a ...