Inventories

3 Months Ended

Mar. 31, 2023

The Company works closely with third parties to manufacture and package finished goods for sale. Based on the arrangements with the manufacturer or packager, the Company will either take title to the finished goods at the time of shipment or at the time of arrival at the Company’s warehouses. The Company then holds such goods in inventory until distribution and sale. These finished goods inventories are stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method.

The Company continually evaluates inventory for potential losses due to excess, obsolete or slow-moving goods by comparing sales history and projections to the inventory on hand. When evidence indicates that the carrying value may not be recoverable, a charge is taken to reduce the inventory to its current net realizable value. At March 31, 2023, there were no cumulative obsolescence and discontinuance losses necessary. At December 31, 2022, the Company had recognized and maintained cumulative net realizable value charges for potential obsolescence and discontinuance losses of approximately $0.5 million.

The Company is responsible for the purchase of the active pharmaceutical ingredient (“API”) for Kristalose and maintains the inventory at third-party packagers. As that API is consumed in production, the value of the API is transferred from raw materials to finished goods. API for the Company's Vaprisol brand is also included in the raw materials inventory at March 31, 2023 and December 31, 2022. Consigned inventory represents Authorized Generic inventory stored with our partner until shipment.

As part of the Vibativ acquisition, the Company acquired API and work in process inventories of $15.6 million that were all initially classified as non-current inventories at the date of acquisition. At March 31, 2023 and December 31, 2022, total non-current inventory, including Vibativ and our clinical trial drug ifetroban, was $7.5 million for each period. The Company had Vibativ finished goods of $0.9 million included in non-current inventory at March 31, 2023, and no non-current inventory at December 31, 2022. The Company also had $0.3 million in non-current inventory for API related to its ifetroban clinical initiatives at March 31, 2023 and December 31, 2022, and $0.2 million and $0.1 million of finished goods, respectively.

At March 31, 2023 and December 31, 2022, the Company's net inventories consisted of the following:


	March 31, 2023		December 31, 2022

Raw materials and work in process	$	12,548,636	$	12,899,659
Consigned inventory	179,786		168,923
Finished goods	4,985,883		4,322,167
Total inventories	17,714,305		17,390,748
less non-current inventories	(7,534,303)		(7,527,167)
Total inventories classified as current	$	10,180,002	$	9,863,581