CPIX 10-K & 10-Q changes, risk factors and insider trading

Unfavorable globalGlobal and national economic conditions and events, including, but not limited to increased inflation, risingchanges in interest rates, tariffs, supply chain disruptions, labor conditions, pandemics and public health crises and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.

Our business and results of operations could be adversely affected by changes in global or national economic conditions. These conditions include, but are not limited to, increased inflation, highchanges and risingin interest rates, tariffs, supply chain disruptions, labor conditions, significant natural disasters (including as a result of climate change), the negative impacts from pandemics and public health crises (such as the COVID-19 pandemic) and the negative impacts resulting from political and military conflict, trade and other international disputes,disputes (including the ongoingconflict between Russia and Ukraine and conflicts and instability in Eastern Europe and the Middle East.East and Venezuela). These conditions have had a significant adverse impact on economic and market conditions around the world, including the United States. While the economic impact brought by, and the duration of, such global events is difficult to assess or predict, such events could result in additional disruption of global financial markets, reducing our ability to access capital in the future, which could negatively affect our liquidity in the future and in ways that cannot be predicted potentially including a prolonged recessionary environment in the United States. In the longer term, there could be significant new regulatory actions and other events that could limit our activities and investment opportunities or change the functioning of the capital markets, and there is the possibility of a severe worldwide economic downturn. Inflation rates have increased recently to levels not seen in decades. If our costs, in particular costs related to clinical trial expenses and/or employee-related expenses, were to become subject to significant inflationary pressures, it may adversely impact our business, operating results and financial condition. In response to inflationary pressures, the Federal Reserve raised the benchmark federal funds rate in 2022 and 2023, which led to the increases in interest rates in the credit markets. Although the Federal Reserve lowered the benchmark federal funds rate in September 2024 and November 2024, it may raise the federal funds rate in the future, which would likely lead to higher interest rates in the credit markets and the possibility of slowing economic growth. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates continue to rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, ongoing effects of the COVID-19 pandemic, the ongoing conflicts in Eastern Europe and the Middle East and employee availability and wage increases.

Our product portfolio currently includes sixseven brands: Acetadote, Caldolor, Kristalose, Sancuso, VaprisolVaprisol, Vibativ and Vibativ.Talicia. A product contamination or other safety or regulatory issues, such as a failure to meet certain FDA reporting requirements involving our products, could negatively impact us and possibly lead to a product recall. In addition, changes impacting any of our products in areas such as competition, lack of market acceptance or demand, government regulation, intellectual property, reimbursement and manufacturing could have an adverse impact on our future revenues and profitability including:

Kristalose: The active pharmaceutical ingredient for Kristalose is manufactured at a single facility through a complex process. It would be particularly difficult to find a new manufacturer of the Kristalose active pharmaceutical ingredient on an expedited basis. We have a manufacturing relationship with one packager who has provided finished supplies of Kristalose for commercial and sampling purposes since 2022. If the manufacturing or packaging facilities are unable to produce useableusable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Kristalose.

Vaprisol: In 2018, the manufacturer of Vaprisol informed us that they would no longer be able to provide the product following the manufacturing of one final batch which is providing us with a multi-year supply. We are in the process of transitioning to a new manufacturing partner, who was issued a U.S. Food and Drug Administration ("FDA") Form 483 in the second quarter of 2022. Once these FDA Form 483 related issues are satisfactorily resolved, we will then resubmit our application for their facility to the FDA for approval. Meanwhile, we have been working with them to support a special, interim supply of compounded product for critically ill patients, which they introduced to the market in late 2023. If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol.

We have added sixseven products to our portfolio of brands through acquisitions. Our business strategy is to continue to acquire rights to FDA-approved products as well as pharmaceutical product candidates in the late stages of development. We do not plan to conduct basic research or preclinical product development, except to the extent of our investment in CET. As compared to large multi-national pharmaceutical companies, we have limited resources to acquire third-party products, businesses and technologies and integrate them into our current infrastructure. Many acquisition opportunities involve competition among several potential purchasers including large multi-national pharmaceutical companies and other competitors that have access to greater financial resources than we do. With future acquisitions, we may face financial and operational risks and uncertainties. We may not be able to engage in future product acquisitions, and those we do complete may not be beneficial to us in the long term.

•changing government standards or public expectations regarding safety, efficacy or labeling changes; and

•greater scrutiny in advertising and promotion.promotion; and

In previous years, legislation has been introduced in Congress that, if enacted, would permit more widespread re-importation of drugs from foreign countries into the U.S., which may include re-importation from foreign countries where the drugs are sold at lower prices than in the U.S. Through Executive Order, “ Lowering Drug Pricing By Once Again Putting Americans First,” the Trump Administration instructed the Secretary of Health and Human Services to take steps to streamline and improve the Importation Program under Section 804 of the Federal Food, Drug and Cosmetic Act to ease the State approval process. Such legislation, or similar regulatory changes, if enacted, could increase competition and decrease the price we receive for any approved products which, in turn, could materially and adversely affect our operating results and our overall financial condition.

Our total assets include intangible assets related to our acquisitions. As of December 31, 2024,2025, intangible assets relating to products, which are being amortized, represented approximately 24 percent18% of our total assets. We may never realize the value of these assets. U.S. Generally Accepted Accounting Principles ("GAAP") require that we evaluate on a regular basis whether events and circumstances have occurred that indicate that all or a portion of the carrying amount of the asset may no longer be recoverable, in which case we would write down the value of the asset and take a corresponding charge to earnings. Any determination requiring the write-off of a significant portion of unamortized intangible assets would adversely affect our results of operations.

WeThe development of drug products will require us to spend significant funds on research, development, testing, obtaining regulatory approvals, manufacturing and marketing.We cannot be certain whether or when we will achieve profitability because of the significant uncertainties relating to our ability to generate commercially successful drug products. Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing additional drug products, we may incur losses if our drug products do not generate significant revenues. If we achieve profitability, we may not be able to sustain or increase profitability.

As of December 31, 2024,2025, our officers and directors control approximately 44.41 percent42.1% of our common stock. Acting together, these shareholders could significantly influence any matter requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combinations. The interests of this group may not always coincide with our interests or the interests of other shareholders and may prevent or delay a change in control. This significant concentration of share ownership may adversely affect the trading price of our common stock because many investors perceive disadvantages to owning stock in companies with controlling shareholders.

The price for the shares of our common stock sold in our initial public offering was determined by negotiation between the representatives of the underwriters and us. This price may not have reflected the market price of our common stock following our initial public offering. Moreover, the market price of our common stock mightmay decline below current levels. In addition, the market price of our common stock is likely to be highly volatile and may fluctuate substantially. Sales of a substantial number of shares of our common stock in the public market or the perception that these sales may occur could cause the market price of our common stock to decline.

Our general business strategy may be adversely affected by unpredictable and unstable market conditions. While we believe we have adequate capital resources to meet current working capital and capital expenditure requirements, a radical economic downturn or increase in our expenses could require additional financing on less than attractive rates or on terms that are dilutive to existing shareholders. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical developments plans. There is a risk that one or more of our current service providers, manufacturers and other partners may encounter difficult economic circumstances, which would directly affect our ability to attain our operating goals on schedule and on budget. The equity and lending markets have been and will most likely continue to be negatively impacted for an unknown period of time due to global events such as the COVID-19 pandemic, increased inflation and the U.S. government’s response thereto.events.

Some provisions of our thirdfourth amended and restated charter, bylaws and Tennessee law may inhibit potential acquisition bids that you may consider favorable.

These and other provisions contained in our thirdfourth amended and restated charter and bylaws could delay or discourage transactions involving an actual or potential change in control of us or our management, including transactions in which our shareholders might otherwise receive a premium for their shares over then current prices, and may limit the ability of shareholders to remove our current management or approve transactions that our shareholders may deem to be in their best interests and, therefore, could adversely affect the price of our common stock.

Our Revolving Credit Agreement imposeimposes restrictive and financial covenants on us. Our failure to comply with these covenants could trigger events that would have a material adverse effect on our business.

Our Revolving Credit Agreement contains specified quarterly financial maintenance covenants. As of December 31, 2024,2025, we were in compliance with Minimum Fixed Charge Coverage Ratio financial covenant, along with the Borrowing Base financial covenantRequirements of the Revolving Credit Agreement and associated amendments. However, we can make no assurance that we will be able to comply with the restrictive and financial covenants contained in the Revolving Credit Agreement in the future.

Our commercial portfolio includes sixseven branded products approved for marketing by the FDA. In addition to these commercial brands, we have Phase II clinical programs underway evaluating our ifetroban product candidate for patients with 1) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by fibrosis of the skin and internal organs and 2) Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease. Additionally, we recently completed a Phase II study in patients with cardiomyopathy associated with Duchenne muscular dystrophy, a rare, fatal, genetic neuromuscular disease that results in deterioration of the skeletal, heart and lung muscles. Next steps include further data analysis and completion of a full study report in preparation for an end-of-Phase-II meeting with the FDA to determine next steps associated with the product’s development and commercialization.

BelowListed isbelow a list ofare our Company’s highlights2025 from 2024.highlights. For more information, please see Part I, Item I,1, Business of this Form 10-K.

•Progressed our clinical trialsdevelopment evaluatingprograms for ifetroban forannouncing patientsbreakthrough withtop-line Systemicstudy Sclerosis,results from our Duchenne muscular dystrophy (DMD) study and Idiopathicpresented Pulmonarythem Fibrosis.at two national DMD conferences.

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. We base our estimates on past experience and on other factors we deem reasonable given the circumstances. Past results help form the basis of our judgments about the carrying value of assets and liabilities that cannot be determined from other sources. Actual results could differ from these estimates. The Company’s most significant estimates include: (1) its allowances for chargebacks and accruals for rebates and product returns, (2) the allowances for obsolescent or unmarketable inventory, (3) valuation of contingent consideration liabilities associated with business combinations and (4) valuation of continuing utility of intangible assets.

Our revenue is derived primarily from the product sales of our FDA approved pharmaceutical brands. Revenue from sales of products is recognized at the point where the customer obtains control of the goods and we satisfy our performance obligation, which occurs upon either shipment of the product or arrival at its destination, depending upon the shipping terms of the transaction. Payment terms typically range from 30 to 60 days from date of shipment. Our net product revenue reflects the reduction from gross product revenue for estimated allowances for chargebacks, and discounts and reflects sales related accruals for rebates, coupons, product returns, and certain administrative and service fees. Significant judgments must be made in determining the transaction price for our sales of products related to these adjustments. Other revenue, which is a component of net revenues, includes non-refundable upfront payments and milestone payments under licensing agreementsagreements, alongcontract withservices, grant funding programs and rental income. Other revenue was approximately 3.5%9.3% of net revenues in 20242025 and 5.2%3.5% in 2023.2024.

The allowances for chargebacks and accruals for rebates and product returns are the most significant estimates used in the recognition of our revenue from product sales. Of the accounts receivable allowances and our sales related accruals, our accrual for product returns and rebates represents the majority of the balance. Sales related accrued liabilities for rebates, product returns, service fees, and administrative fees totaled $7.8 million and $7.6 millioneach as of December 31, 20242025 and 2023, respectively.2024. Of these amounts, our estimated liability for fee for services represented $1.5$1.8 million and $1.4$1.5 million, respectively, while our accrual for product returns totaled $2.7$3.0 million and $2.6$2.7 million, respectively. If the actual amount of cash discounts, chargebacks, rebates, and product returns differs from the amounts estimated by management, material differences may result from the amount of our revenue recognized from product sales. A change in our rebate estimate of one percentage point would have impacted net sales by approximately $0.6 million for the years ended December 31, 20242025 and 2023.2024. A change in our product return estimate of one percentage point would have impacted net sales by $0.4 million for the years ended December 31, 20242025 and 2023.2024.

We provide for deferred taxes using the asset and liability approach. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss and tax credit carry-forwards and differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Our principal differences are related to the timing of deductibility of certain items such as depreciation, amortization and expense for options issued to nonemployees.non-employees. Deferred tax assets and liabilities are measured using management’s estimate of tax rates expected to apply to taxable income in the years in which management believes those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our results of operations in the period that includes the enactment date.

Net revenues. Net revenues for the year ended December 31, 2024,2025, were approximately $37.9$44.5 million compared to $39.6$37.9 million for the year ended December 31, 2023.2024. As detailed in the table above, the increase in net revenuerevenues increasedwas due to the growth in sales during 20242025 for two of ourfour marketed products: SancusoSancuso, Vibativ, Talicia and Caldolor. These increases were mainly offset by decreases in net product sales of Kristalose and Vibativ.Acetadote.

Sancuso revenue was $9.0$11.9 million compared to $8.1$9.0 million in the prior year, an increase of $0.9$2.9 million or 11.2%32.2% for the year ended December 31, 2024.2025. This increase in net revenue was primarily impacted by anincreased shipments, as well as improvement in product returns in 2024.2025.

Vibativ revenue decreasedincreased to $7.2$9.5 million for the year ended December 31, 2024,2025, compared to $8.8$7.2 million in the same prior year period. The decreaseincrease was the result of decreasedincreased shipments of the productproduct, andincluding higherthe productproduct’s returns.new 4-Pak presentation.

Caldolor revenue was $5.0$4.7 million during the year ended December 31, 2024,2025, compared to $4.3$5.0 million in the same period last year. This 14.4% increasedecrease in Caldolor revenue for the year ended December 31, 2024,2025, was impacted by ana increasedelay in fulfilling an international shipments.order.

Acetadote revenue included net sales of our branded product and our share of net sales from our Authorized Generic. For the year ended December 31, 2024,2025, the Acetadote net revenue was $0.2$0.5 million, as compared to $0.5$0.2 million from the prior year period. This decreaseincrease resultsresulted fromprimarily lowerhigher sales for our Authorized Generic.

We discontinued the product RediTrexOmeclamox-Pak in 2023.2025. Net revenue was positively impacted by various sales deduction adjustments.

Other Revenue. Other revenue decreasedwas from$4.1 2023million whenfor the year ended December 31, 2025, an increase of $2.8 million compared to the year ended December 31, 2024, primarily due to milestone payments recorded of $1$3.1 million associatedin withpayments from our Vibativinternational product were recorded.partners.

Cost of products sold. Cost of products sold for the year ended December 31, 2025 and 2024, werewas $6.7 million and $6.6 million comparedremaining toconsistent $6.1year millionover in the prior year, an increase of $0.5 million.year. The gross margin for the years ended December 31, 20242025 and 2023,2024, were 82.6%85.0% and 84.7%,82.6%, respectively.

Selling and marketing. Selling and marketing expense for the year ended December 31, 2024,2025, werewas $17.0$19.1 million compared to $18.5$17.0 million in the prior year, which was aan decreaseincrease of $1.4$2.1 million. This decreaseincrease was primarily a result of aan decreaseincrease in marketingroyalty expenses and other costs associated with royaltythe costsincrease andin promotionalproduct spending.sales.

Research and development. Research and development costs for the year ended December 31, 2024,2025, were $4.8$5.6 million, compared to $5.8$4.8 million in the prior year, representing aan decreaseincrease of $1.0$0.8 million due primarily to reducedincreased FDA fees, salariesfees and consultingmanufacturing expenses.costs. A portion of our research and development costs is variable based on the number of trials, study sites, number of patients and the cost per patient in each of our clinical programs. We continue to fund our ongoing clinical initiatives associated with our pipeline products.

General and administrative. General and administrative expenses for the year ended December 31, 2024,2025, were $11.1$11.9 million compared to $10.7$11.1 million in the prior year. The primary driver of the increase was due to higher salarycompensation costs.expenses.

(1) The Sancuso inventory included in the costs of product sold during the period was acquired and paid for by Cumberland as part of the acquisition of the brand during 2022.

Our primary sources of liquidity are cash flows provided by our operations, the amounts borrowed and available under our line of credit and the cash proceeds from our initial public offering of common stock that was completed in August 2009.2009 and the cash proceeds from utilizing our ATM program in February 2025. We believe that our internally generated cash flows, existing working capital and our line of credit will be adequate to finance internal growth, finance business development initiatives, and fund capital expenditures for the foreseeable future.

Cash providedused byin financing activities of $0.2$6.7 million was primarily due to a $2.5$10.0 million netpayments borrowing,on partiallyour offsetline byof credit, payments of $1.7 million of contingent consideration for Vibativ and Sancuso, and $0.6$0.3 million in cash used to repurchase shares of our common stock.stock, partially offset by $5.3 million proceeds from the ATM offering.

As noted above, we continue to repurchase shares of our common stock, as discussed in Part II, Item 5, "Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities", of this Form 10-K. With the ATM offering in February 2025, the repurchase of our common stock ceased in January 2025.

The net $1.4$0.4 million decrease in cash and cash equivalents for the year ended December 31, 2023,2024, was attributable to cash providedused byin operating activities offset by cash usedprovided inby investingfinancing and financinginvesting activities. Cash providedused byin operating activities of $6.1$0.6 million is primarily due to an increase in accounts payable and other accrued liabilitiesreceivable of $3.7$1.9 million, and a $3.4 million decrease in accounts receivable, partially offset by a decrease in non-cash contingent consideration of $1.3$1.5 million.million, an increase in CSV of life insurance policies over premiums paid of $0.1 million, the gain on insurance proceeds of $0.2 million and a $1.0 million decrease in operating lease liabilities, partially offset by an increase in inventory of $2.4 million and an increase in accounts payable and other accrued liabilities. Cash usedprovided inby investing activities ofless than $0.1 million was the result of more life insurance proceeds received offset by additions of intangibles and propertyproperty. andCash equipmentprovided by financing activities of $0.2 million was primarily due to a $2.5 million net borrowing, partially offset by life insurance proceeds received. Our financing activities included payments of $3.3$1.7 million of contingent consideration for Vibativ and Sancuso, a pay down on our line of credit of $3.4 and $0.7$0.6 million in cash used to repurchase shares of our common stock.

On December 14, 2023, the Company filed a Shelf Registration on Form S-3 with the SEC associated with the sale of up to $100 million in corporate securities which also was declared effective on December 26, 2023. The Company entered into a Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) on March 20, 2024, in order to allow the Company to sell shares at market prices. The Company did not issue any shares under its ATM program during the year ended December 31, 2024.

On February 5, 2025, the Company utilized the Sales Agreement with H. C. Wainwright and sold 1,000,000 shares of Cumberland’s common shares.shares under the ATM program. These shares sold at a volume weighted average price of $5.4688 per share for aggregate gross proceeds of $5,468,800.

On February 14, 2025, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock issuable in the ATM program under the Sales Agreement with H.C. Wainwright for to up to $10 million and filed a prospectus supplement under the Sales Agreement for that aggregate offering amount.

On September 5, 2023, the Company entered into a new Revolving Credit Loan Agreement with Pinnacle Bank. This facility provides for an aggregate principal funding amount of up to $25 million. The initial revolving line of credit iswas up to $20 million, with the ability for Cumberland to increase the amount to $25 million, under certain conditions. It hashad a three year term expiring on October 1, 2026. The interest rate is based on Benchmark (Term SOFR) plus a spread of 2.75%. Cumberland iswas initially subject to one financial covenant, the maintenance of a Funded Debt Ratio, determined on a quarterly basis. Borrowings under the line of credit are collateralized by substantially all of our assets.

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

•In additionFebruary to these commercial brands,2025 we have announced breakthrough results infrom athe Phase 2 FIGHT DMD clinical study of our ifetroban product candidate in patients with cardiomyopathy associated with Duchenne muscular dystrophy (“DMD”). This rare, fatal genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles. We then completed andhave submitted a clinical study report to the FDA and beganhave begun interactions to determine theirthe remaining developmentregulatory requirements. The program has received FDA Orphan Drug and Rare Pediatric Disease and Fast Track designations. In February 2026, the program also received FDA Fast Track designation.

•We also have a Phase II2 clinical programs underwayprogram evaluating our ifetroban product candidate in patients with 1) Systemic Sclerosis (“SSc”), or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organsorgans. Enrollment in the study is complete and 2)evaluation Idiopathic Pulmonary Fibrosis (“IPF”),of the mostresulting commondata formis ofunderway, progressivewith fibrosingtop-line interstitialresults lunganticipated disease. Investigational new study applications have been cleared byas the FDAnext enabling us to launch clinical studies in each of these areas.milestone.

•Progressing our clinical pipeline and incubatingIncubating future product opportunities at CET. We believe it is important to build a pipeline of innovative new product opportunities, as we are doing through our ifetroban Phase II development programs. We are also supplementing our acquisitions and late-stageclinical development activities with the early-stage product development activities at CET.

Completion of Strategic Transaction with Apotex

We recently announced athe Strategicclosing of our Transaction with Apotex, the largest Canadian-based pharmaceutical companyApotex to integrate our branded U.S. commercial businesses. Under the terms of the agreement, Apotex will acquireacquired our portfolio of FDA-approved brands for $100 million in cash consideration, subjectfollowing approval by our shareholders. This transaction was designed to ourunlock shareholders’ approvalvalue and certainsharpen otherour customaryfocus closingon conditions.advancing our pipeline of differentiated product candidates designed to address unmet medical needs.

This Transaction is designed to unlock value and sharpen our focus on advancing our pipeline of differentiated product candidates designed to address unmet medical needs. Following the closing of the Transaction,transaction, we willhave retainretained our development programs, as well as our majority ownership in Cumberland Emerging Technologies. A number of our employees received and accepted offers of employment from Apotex and began employment with Apotex on July 31, 2026. This transactions positions Cumberland to then operate with the profile of a development-stage biopharmaceutical organization.