Inventories

9 Months Ended

Sep. 30, 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 September 30, 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 purchases the active pharmaceutical ingredient (“API”) for Kristalose and maintains the inventory of that raw material. API for the Company's Vaprisol and Vibativ brands were included in the assets associated with the acquisition of those brands and are also included in the raw materials inventory. As part of the Vibativ acquisition, the Company acquired API and work in process inventories of $15.6 million that were all initially classified as non-current inventories at the date of acquisition.

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

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

At September 30, 2023 and December 31, 2022, total non-current inventory was $8.3 million and $7.5 million, respectively. It included Vibativ finished goods of $1.3 million, Vibativ raw materials of $4.3 million, Kristalose raw materials of $1.5 million, Vaprisol raw materials of $0.9 million and ifetroban raw materials of $0.2 million. At December 31, 2022, the Company's non-current inventory included Vibativ raw materials of $7.1 million and ifetroban raw materials of $0.3 million and finished goods of $0.1 million.

At September 30, 2023 and December 31, 2022, the Company's net inventories consisted of the following:


	September 30, 2023		December 31, 2022

Raw materials and work in process	$	12,052,652	$	12,899,659
Consigned inventory	191,957		168,923
Finished goods	4,727,784		4,322,166
Total inventories	16,972,393		17,390,748
less non-current inventories	(8,301,845)		(7,527,167)
Total inventories classified as current	$	8,670,548	$	9,863,581