What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 201 added, 156 removed, 704 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

June 30, 2025

September 30, 2025

December 31, 2024

23 unchanged sentences

44,183 19,947

Long-term debt, net of discount and including accrued fees

Long-term debt, net of current portion, debt discount and accrued exit fees

27,591 29,811

8 unchanged sentences

50,000,000 shares authorized;

26,817,535 and 26,709,084 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

26,817,535 and 26,709,084 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

11 unchanged sentences

For the three months ended

For the six months ended

For the nine months ended

September 30,

Licensing revenue

9 unchanged sentences

Total operating expenses

Loss from operations

Income (loss) from operations

Other expense:

Interest and other expense, net

Loss before income tax expense

Income tax expense

Net loss per share, basic and diluted

Weighted average number of common shares outstanding, basic and diluted

Income (loss) before income tax expense

Income tax expense (benefit)

Net income (loss)

Net income (loss) per share, basic

Weighted average number of common shares outstanding, basic

Net income (loss) per share, diluted

Weighted average number of common shares outstanding, diluted

The accompanying notes are an integral part of these condensed financial statements.

1 unchanged sentence

Condensed Statements of Stockholders ’ Equity

For the three months ended June 30, 2025 and 2024

For the three months ended September 30, 2025 and 2024

(in thousands, except share amounts)

1 unchanged sentence

Total Stockholders’

Balances at March 31, 2025

Stock-based compensation

Balances at June 30, 2025

Stock-based compensation

Balances at September 30, 2025

Additional Paid-in

Total Stockholders’

Balances at March 31, 2024

Stock-based compensation

Employee stock purchase plan

Balances at June 30, 2024

Stock-based compensation

Stock option exercises and vesting of restricted stock

Relative fair value of warrants issued in connection with debt

Balances at September 30, 2024

The accompanying notes are an integral part of these condensed financial statements.

1 unchanged sentence

Condensed Statements of Stockholders ’ Equity

For the six months ended June 30, 2025 and 2024

For the nine months ended September 30, 2025 and 2024

(in thousands, except share amounts)

3 unchanged sentences

Stock-based compensation

Employee stock purchase plan

Stock option exercises and vesting of restricted stock units

Balances at June 30, 2025

Balances at September 30, 2025

Additional Paid-in

3 unchanged sentences

Employee stock purchase plan

Stock option exercises

Balances at June 30, 2024

Stock option exercises and vesting of restricted stock

Relative fair value of warrants issued in connection with debt

Balances at September 30, 2024

The accompanying notes are an integral part of these condensed financial statements.

2 unchanged sentences

(In thousands)

Six months ended

June 30, 2025

June 30, 2024

Nine months ended

September 30, 2025

September 30, 2024

Cash flows from (used in) operating activities

Adjustments to reconcile net loss to net cash from operating activities:

Adjustments to reconcile net loss to net cash from (used in) operating activities:

Stock-based compensation

37 unchanged sentences

Note 2 — Liquidity Considerations

The Company believes its existing cash and cash equivalents of $ 25,379 as of June 30, 2025 in addition to revenues from products will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from the date of filing of this quarterly report.

The Company believes its existing cash and cash equivalents of $ 37,121 as of September 30, 2025 in addition to revenues from products will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from the date of filing of this quarterly report.

This estimate is based on the Company’s current assumptions, including assumptions relating to estimated sales and its ability to manage spending.

10 unchanged sentences

Unaudited Interim Financial Information

The accompanying interim condensed financial statements are unaudited and have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2025, and the results of its operations and its cash flows for the periods ended June 30, 2025 and 2024.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2025 and 2024 are also unaudited.

The accompanying interim condensed financial statements are unaudited and have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2025, and the results of its operations and its cash flows for the periods ended September 30, 2025 and 2024.

The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2025 and 2024 are also unaudited.

The interim financial statements are condensed and generally do not repeat the disclosures in the annual financial statements.

As such, the interim financial statements herein should be read in conjunction with the Company’s latest annual financial statements filed on Form 10 -K on March 18, 2025.

The results for the three -month and six -month periods ended June 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

The results for the three -month and nine -month periods ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

Use of Estimates

27 unchanged sentences

Segment revenues, expenses and profit or loss is reported on the Condensed Statements of Operations.

Additionally, the measure of segment assets is reported on the Company’s balance sheet as total assets.

Additionally, the measure of segment assets is reported on the Company’s Condensed Balance Sheet as total assets.

The Company's revenues and its accounts receivable balances are highly concentrated and consist of sales to and amounts due from AnovoRx and Optime Care for the Company's INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM, Carglumic Acid, GALZIN® and Betaine Anhydrous products, as well as from Pentec Heath for sales of the Company’s PKU GOLIKE® product.

For the six months ended June 30, 2025 and 2024, AnovoRx product sales represented 92.0 % and 95.9 % of net product revenues, respectively.

As of June 30, 2025 and December 31, 2024 , AnovoRx product sales represented 59.7 % and 96.2 % of net accounts receivable.

As of June 30, 2025 and December 31, 2024 , all long-lived assets were domiciled within the U.S.

For the nine months ended September 30, 2025 and 2024, AnovoRx product sales represented 85.8 % and 98.5 % of net product revenues, respectively.

As of September 30, 2025 and December 31, 2024 , AnovoRx product sales represented 65.8 % and 96.2 % of net accounts receivable, respectively.

As of September 30, 2025 and December 31, 2024 , all long-lived assets were domiciled within the U.S.

Cash and Cash Equivalents

2 unchanged sentences

financial institutions or invested in high-grade money market funds.

As of June 30, 2025 and December 31, 2024, the Company’s cash is in a non-interest-bearing account and a high-grade money market fund.

As of September 30, 2025 and December 31, 2024, the Company’s cash is in a non-interest-bearing account and a high-grade money market fund.

From time to time, amounts deposited with its bank exceed federally insured limits.

6 unchanged sentences

Given the size and creditworthiness of these customers, we have not experienced and do not expect to experience material credit losses.

The total for all accounts receivable reserves was $ 249 and $ 238 as of June 30, 2025 and December 31, 2024 , respectively.

The total for all accounts receivable reserves was $ 238 and $ 238 as of September 30, 2025 and December 31, 2024 , respectively.

The Company values its inventories at the lower of cost or net realizable value using the first -in, first -out method of valuation.

The Company reviews its inventories for potential excess or obsolete issues on an ongoing basis and records a write-down if an impairment is identified.

As of June 30, 2025 and December 31, 2024 , inventories consisted of purchased finished goods, semi-finished goods and raw materials.

At June 30, 2025 , inventories are shown net of a reserve for Nitisinone, Betaine Anhydrous, GALZIN®, ALKINDI SPRINKLE®, and PKU GOLIKE® inventory.

As of September 30, 2025 and December 31, 2024 , inventories consisted of purchased finished goods, semi-finished goods and raw materials.

At September 30, 2025 , inventories are shown net of a reserve for Nitisinone, Betaine Anhydrous, GALZIN®, ALKINDI SPRINKLE® and PKU GOLIKE® inventory.

As of December 31, 2024, inventories included $ 5,000 in prepaid raw materials acquired in the INCRELEX® business acquisition as the Company did not take title and possession to the raw materials until June 19, 2025.

At June 30 and December 31, 2024 inventories are shown net of a reserve for Nitisinone, Betaine Anhydrous, ALKINDI SPRINKLE®, and PKU GOLIKE® inventory.

There was an inventory reserve of $ 811 and $ 605 at June 30, 2025 and December 31, 2024 , respectively.

At September 30 and December 31, 2024 inventories are shown net of a reserve for Nitisinone, Betaine Anhydrous, ALKINDI SPRINKLE® and PKU GOLIKE® inventory.

There was an inventory reserve of $ 942 and $ 605 at September 30, 2025 and December 31, 2024 , respectively.

Property and Equipment

6 unchanged sentences

Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized.

Depreciation expense for the six -month periods ended June 30, 2025 and 2024 was $ 16 and $ 23 , respectively.

Depreciation expense for the nine -month periods ended September 30, 2025 and 2024 was $ 24 and $ 12 , respectively.

Intangible Assets

1 unchanged sentence

The cost is amortized on a straight-line basis over the estimated useful life of the product commencing on the approval date or the product acquisition date in accordance with ASC 350 — Intangibles - Goodwill and Other.

If an acquired asset or asset group does not meet the definition of a business, as defined in ASC 805, the transaction is accounted for as an asset acquisition based on the principles described in ASC 805 - 50.

Asset acquisitions are accounted for using a cost accumulation and allocation model under which the cost of the acquisition is allocated to the assets acquired and liabilities assumed and the useful life is based on the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Company

In November 2021, the Company purchased the rights for its Carglumic Acid product for $ 3,250 and that cost is being amortized over ten years.

1 unchanged sentence

In October 2023, the Company purchased the rights for its Nitisinone product for $ 650 and that cost is being amortized over five years.

In March 2024 , the Company purchased the rights for its PKU GOLIKE® product which resulted in a $ 1,868 intangible asset that is being amortized over ten years.

In December 2024, the Company completed a business combination of INCRELEX® (mecasermin injection) that included a marketed product intangible of $ 21,250 and that cost is being amortized over ten years.

In December 2024, the Company acquired GALZIN® (zinc acetate) for $ 8,119 and that cost is being amortized over ten years.

In March 2024 , the Company purchased the rights for its PKU GOLIKE® product for $ 1,868 and that cost is being amortized over ten years.

In December 2024, the Company purchased the rights for its INCRELEX® product for $ 21,250 and that cost is being amortized over ten years.

In December 2024, the Company purchased the rights for its GALZIN® product for $ 8,119 and that cost is being amortized over ten years.

Eton Pharmaceuticals, Inc.

2 unchanged sentences

Note 3 — Summary of Significant Accounting Policies (continued)

The intangible assets, net on the Company’s Condensed Balance Sheet, reflected $ 4,383 and $ 2,381 of accumulated amortization as of June 30, 2025 and December 31, 2024 .The Company recorded $ 2,002 and $ 487 , respectively, of amortization expense for the six months ended June 30, 2025 and 2024 , respectively.

The intangible assets, net on the Company’s Condensed Balance Sheet, reflected $ 5,384 and $ 2,381 of accumulated amortization as of September 30, 2025 and December 31, 2024, respectively.

The Company recorded $ 3,003 and $ 753 , of amortization expense for the nine months ended September 30, 2025 and 2024 , respectively.

The table below shows the estimated remaining amortization for these products for each of the five years from 2025 to 2029 and thereafter.

5 unchanged sentences

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the Company’s Condensed Statements of Operations for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

No impairment was recognized during the six -month periods ended June 30, 2025 or 2024 .

No impairment was recognized during the nine -month periods ended September 30, 2025 or 2024 .

Deferred Financing Costs, Debt Discount and Detachable Debt-Related Warrants

11 unchanged sentences

Operating leases are reflected on the Condensed Balance Sheet as operating lease right-of-use assets, current accrued liabilities and long-term operating lease liabilities.

The Company does not have any finance leases as of June 30, 2025 and December 31, 2024 .

The Company does not have any finance leases as of September 30, 2025 and December 31, 2024 .

The Company commences recognizing operating lease expense when the lessor makes the underlying asset available for use by the Company and the operating lease expense is recognized on a straight-line basis over the term of the lease.

19 unchanged sentences

Additionally, Management monitors its exposure to accounts receivable by periodically evaluating the collectability of the account receivable based on a variety of factors including the length of time the receivables are past due, the financial health of the customer and any prior customer credit loss experience.

Based upon the review of these factors, the Company recorded no allowance for credit losses at June 30, 2025 or December 31, 2024 .

Based upon the review of these factors, the Company recorded no allowance for credit losses at September 30, 2025 or December 31, 2024 .

Revenue Recognition for Contracts with Customers

22 unchanged sentences

Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied.

Principal Versus Agent – Under the terms of the transitional services agreement (“TSA”) between the Company and Ipsen S.A, the Company evaluates whether its performance obligation is a promise to transfer product to a customer as the principal, or to arrange for product to be provided by another party using a control model as an agent.

This evaluation determined that the Company is not in control of establishing the transaction price, managing all aspects of the shipment process and taking the risk of loss for delivery, collection and returns.

Based on the Company's evaluation of the control model, it determined that the Company's responsibilities under the TSA was as an agent and not the principal, and correspondingly, such revenue related to products sold by Ipsen S.A are reported on a net versus a gross basis.

Significant Financing Component – In determining the transaction price, the Company will adjust consideration for the effects of the time value of money if the expected period between payment by the licensees and the transfer of the promised goods or services to the licensees will be more than one year.

11 unchanged sentences

INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone sales are not subject to returns.

Upon recognition of revenue from product sales, the estimated amounts of chargebacks, prompt payment discounts and state Medicaid are included in sales reserves, accrued liabilities and net accounts receivable.

Upon recognition of revenue from product sales, the estimated amounts of chargebacks, prompt payment discounts and state Medicaid rebates are included in sales reserves, accrued liabilities and net accounts receivable.

The Company stores its INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone inventory at its pharmacy distributor customer locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders.

20 unchanged sentences

C ommon stock equivalents are excluded from the computation when their inclusion would be anti-dilutive.

No such adjustments were made for 2025 or 2024 as the Company reported a net loss for the three months and six months ended June 30, 2025 and 2024 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 8 ).

No such adjustments were made for the three and nine months ended September 30, 2025 and for the nine months ended September 30, 2024 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 8 ).

Eton Pharmaceuticals, Inc.

7 unchanged sentences

To the extent the Company establishes a valuation allowance or increase or decrease to this allowance in a period, the impact will be included in income tax expense in the Condensed Statements of Operations.

As of June 30, 2025 and December 31, 2024 , the Company has established a 100 % valuation reserve against its deferred tax assets.

As of September 30, 2025 and December 31, 2024 , the Company has established a 100 % valuation reserve against its deferred tax assets.

See Note 9 for further information.

9 unchanged sentences

The expected term of stock options granted is based on vesting periods and the contractual life of the options.

Expected volatilities are based on the Company's historical volatility subsequent to our IPO, which we believe represents the most accurate basis for estimating expected future volatility under the current conditions.

Expected volatilities are based on the Company's historical volatility subsequent to our initial public offering (“IPO”), which we believe represents the most accurate basis for estimating expected future volatility under the current conditions.

The Company accounts for forfeitures as they occur.

14 unchanged sentences

Based on borrowing rates currently available to the Company, the carrying value of the debt obligation approximates its fair value.

Impact of Recent Accounting Pronouncements

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

30 unchanged sentences

In September 2024, the Company and SWK entered into a subsequent amendment to the SWK Credit Agreement.

Under the terms of the amendment, the Company expanded its existing credit facility by $ 25,700 to $ 30,000 , extended the facility’s maturity to three years from closing with a loan maturity date of December 17, 2027, and reduced the facility’s annual interest rate to Secured Overnight Financing Rate (“ SOFR ”) plus 6.75 %.

In connection with the amendment to the SWK Credit Agreement, the Company issued a warrant to the SWK for the purchase of up to 289,736 shares of common stock at a price of $ 5.32 per share.

Under the terms of the amendment, the Company expanded its existing credit facility to $ 30,000 , extended the facility’s maturity to three years from closing with a loan maturity date of December 17, 2027 and reduced the facility’s annual interest rate to Secured Overnight Financing Rate (“ SOFR ”) plus 6.75 %.

In connection with the amendment to the SWK Credit Agreement, the Company issued a warrant to SWK for the purchase of up to 289,736 shares of common stock at a price of $ 5.32 per share.

The relative fair value of these 289,736 warrants was $ 1,170 and was estimated using the BSM with the following assumptions:

8 unchanged sentences

Borrowing under the amended SWK Credit Agreement is secured by the Company's assets, contains customary default provisions, which include limits on additional indebtedness.

As of June 30, 2025 and December 31, 2024 , the Company was in compliance with all financial covenants.

The Company recorded interest expense of $ 2,361 and $ 460 for the six months ended June 30, 2025 and 2024, respectively, which included $ 342 and $ 48 , respectively of debt discount and non-cash interest expense.

During the six months ended June 30, 2025 and 2024, debt discount amortization and accrued exit fees was $ 112 and $ 48 , respectively, associated with the SWK Credit Agreement and $ 229 was associated with interest expense accretion during the six months ended June 30, 2025 on the $ 5,000 deferred consideration due to Ipsen S.A (See Note 12 for further discussion).

As of June 30, 2025 and December 2024, the Company had accrued interest of $ 454 and $ 182 , respectively, which is included in accrued liabilities in the accompanying Condensed Balance Sheet.

The table below reflects the future payments for the SWK loan principal and interest as of June 30, 2025 .

As of September 30, 2025 and December 31, 2024 , the Company was in compliance with all financial covenants.

The Company recorded interest expense of $ 1,212 and $ 211 for the three months ended September 30, 2025 and 2024, respectively, which included $ 189 and $ 29 , respectively of debt discount amortization and non-cash interest expense.

During the nine months ended September 30, 2025 and 2024, debt discount amortization and accrued exit fees was $ 555 and $ 70 , respectively, associated with the SWK Credit Agreement and $ 350 was associated with interest expense accretion during the nine months ended September 30, 2025 on the $ 5,000 deferred consideration due to Ipsen S.A (See Note 12 for further discussion).

As of September 30, 2025 and December 2024, the Company had accrued interest of $ 454 and $ 182 , respectively, which is included in accrued liabilities in the accompanying Condensed Balance Sheet.

The table below reflects the future payments for the SWK loan principal and interest as of September 30, 2025 .

Total payments

unamortized discount

accrued exit fees at June 30, 2025

accrued exit fees at September 30, 2025

Debt, net of unamortized discount and accrued exit fees

1 unchanged sentence

The Company has 50,000,000 authorized shares of $ 0.001 par value common stock under its Amended and Restated Certificate of Incorporation.

During the six months ended June 30, 2025 , the Company issued 108,451 shares of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan as amended in December 2020.

In June 30, 2024 the Company issued 2,500 shares of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan.

During the nine months ended September 30, 2025 , the Company issued 108,451 shares of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan as amended in December 2020.

In September 30, 2024 the Company issued 2,500 shares of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan.

Eton Pharmaceuticals, Inc.

2 unchanged sentences

Note 6 — Common Stock Warrants

The Company’s outstanding warrants to purchase shares of its common stock at June 30, 2025 are summarized in the table below.

The Company’s outstanding warrants to purchase shares of its common stock at September 30, 2025 are summarized in the table below.

Description of Warrants

2 unchanged sentences

SWK Warrants – Debt – Tranche #1

51,239 $ 5.86

SWK Warrants – Debt – Tranche #2

18,141 $ 6.62

SWK Warrants – Debt – Tranche #3

289,736 $ 5.32

Total shares and weighted average exercise price

359,116 $ 5.46

The holders of these warrants or their permitted transferees, are entitled to rights with respect to the registration under the Securities Act of their shares that are converted to common stock, including demand registration rights and piggyback registration rights.

3 unchanged sentences

In November 2018 , the Company’s stockholders and board of directors approved the 2018 Equity Incentive Plan, as amended (the “2018 Plan”) which succeeded the 2017 Plan.

The 2018 Plan was amended by the board of directors in December 2020.

The Company has granted RSAs, stock options and RSUs for its common stock under the 2017 Plan and 2018 Plan as detailed in the tables below.

There were 982,556 shares available for future issuance under the 2018 Plan as of June 30, 2025.

There were 1,076,595 shares available for future issuance under the 2018 Plan as of September 30, 2025.

All stock options issued have been non-qualified stock options and the exercise price is the closing stock price of the Company's common stock on the date of grant.

6 unchanged sentences

The Company uses the closing stock price on the date of grant as the exercise price.

For the six -month periods ended June 30, 2025 and 2024 , the Company’s total stock-based compensation expense was $ 3,296 and $ 1,661 , respectively.

Of these amounts, $ 3,214 and $ 1,459 were recorded in general and administrative (“G&A”) expenses during the six months ended June 30, 2025 and 2024, respectively, and $ 82 and $ 202 were recorded in research and development expenses for the six months ended June 30, 2025 and 2024, respectively.

For the nine months ended September 30, 2025 and 2024 , the Company’s total stock-based compensation expense was $ 4,388 and $ 2,383 , respectively.

Of these amounts, $ 4,268 and $ 2,138 were recorded in general and administrative (“G&A”) expenses during the nine months ended September 30, 2025 and 2024, respectively, and $ 120 and $ 245 were recorded in research and development expenses for the nine months ended September 30, 2025 and 2024, respectively.

Stock Options

The following table summarizes stock option activity during the six months ended June 30, 2025 :

The following table summarizes stock option activity during the nine months ended September 30, 2025 :

Outstanding as of December 31, 2024

4 unchanged sentences

( 316,220 ) $ 4.99

Outstanding as of June 30, 2025

Outstanding as of September 30, 2025

5,965,004 $ 5.34 6.6 $ 97,765

Options exercisable as of June 30, 2025

Options exercisable as of September 30, 2025

4,376,667 $ 4.83 5.9 $ 73,978

Options vested and expected to vest at June 30, 2025

Options vested and expected to vest at September 30, 2025

5,965,004 $ 5.34 6.6 $ 97,765

The following table summarizes stock option activity during the six months ended June 30, 2024:

The following table summarizes stock option activity during the nine months ended September 30, 2024:

Outstanding as of December 31, 2023

4 unchanged sentences

( 264,717 ) $ 4.61

Outstanding as of June 30, 2024

Outstanding as of September 30, 2024

6,083,127 $ 4.53 7.2 $ 11,194

Options exercisable as of June 30, 2024

Options exercisable as of September 30, 2024

4,060,340 $ 4.70 6.4 $ 7,448

Options vested and expected to vest at June 30, 2024

Options vested and expected to vest at September 30, 2024

6,083,127 $ 4.53 7.2 $ 11,194

3 unchanged sentences

Note 7 — Share-Based Payment Awards (continued)

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock at June 30, 2025 for those stock options that had strike prices lower than the fair value of the Company’s common stock.

Stock based compensation related to stock options was $ 1,756 and $ 1,432 for the six -month periods ended June 30, 2025 and 2024 , respectively.

As of June 30, 2025 , there was a total of $ 8,508 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 2.6 years.

The weighted average grant date fair value of stock option awards for the six months ended June 30, 2025 was $ 13.37 per share.

During the three months ended March 31, 2025, the Company issued 108,451 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $ 3.63 per share with an intrinsic value of $ 1,167 .

During the six months ended June 30, 2024, the Company issued 2,500 shares of its stock resulting from stock option exercises at a weighted average exercise price of $ 2.97 per share with an intrinsic value of $ 2 .

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock at September 30, 2025 for those stock options that had strike prices lower than the fair value of the Company’s common stock.

Stock based compensation related to stock options was $ 3,747 and $ 1,991 for the nine -month periods ended September 30, 2025 and 2024 , respectively.

As of September 30, 2025 , there was a total of $ 5,792 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 2.6 years.

During the nine months ended September 30, 2025, the Company issued 108,451 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $ 3.63 per share with an intrinsic value of $ 1,167 .

During the nine months ended September 30, 2024, the Company issued 2,500 shares of its stock resulting from stock option exercises at a weighted average exercise price of $ 2.97 per share with an intrinsic value of $ 2 .

Restricted Stock Units (RSUs)

The following table summarizes restricted stock unit activity during the six months ended June 30, 2025 :

The following table summarizes restricted stock unit activity during the nine months ended September 30, 2025 :

Number of Units

5 unchanged sentences

( 44,373 ) $ 6.92

Outstanding and unvested as of June 30, 2025

Outstanding and unvested as of September 30, 2025

294,817 $ 12.95

The following table summarizes restricted stock unit activity during the six months ended June 30, 2024:

The following table summarizes restricted stock unit activity during the nine months ended September 30, 2024:

Number of Units

3 unchanged sentences

( 90,402 ) $ 2.63

Outstanding and unvested as of June 30, 2024

( 23,000 ) $ 2.63

Stock-based compensation related to RSUs was $ 1,582 and $ 117 for the six -month periods ended June 30, 2025 and 2024 , respectively.

As of June 30, 2025 , there was $ 2,981 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 2.6 years.

Outstanding and unvested as of September 30, 2024

160,802 $ 2.63

Stock-based compensation related to RSUs was $ 611 and $ 171 for the nine -month periods ended September 30, 2025 and 2024 , respectively.

As of September 30, 2025 , there was $ 2,239 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 2.7 years.

Employee Stock Purchase Plan

The Company’s 2018 Employee Stock Purchase Plan (“ESPP”) provides for an initial reserve of 150,000 shares, and this reserve is automatically increased on January 1 of each year by the lesser of 1 % of the outstanding common shares at December 31 of the preceding year or 150,000 shares, subject to reduction at the discretion of the Company’s board of directors.

As of June 30, 2025 , there were 842,581 shares available for issuance under the ESPP.

The Company’s 2018 Employee Stock Purchase Plan (“ESPP”) provides for an initial reserve of 150,000 shares, and this reserve is automatically increased on January 1 of each year by the lesser of 1 % of the outstanding shares of common stock at December 31 of the preceding year or 150,000 shares of the Company's common stock, subject to reduction at the discretion of the Company’s board of directors.

As of September 30, 2025 , there were 842,581 shares available for issuance under the ESPP.

The annual offerings consist of two stock purchase periods, with the first purchase period ending in June and the second ending in December.

2 unchanged sentences

The terms of the ESPP provide a restart feature if the Company's stock price is lower at the end of a six -month period within the twelve -month offering period than it was at the beginning of the twelve -month offering period.

The Company recorded a credit to expense of ( $ 42 ) and expense of $ 112 related to the ESPP during the six -month periods ended June 30, 2025 and 2024 , respectively.

For the six -month periods ended June 30, 2025 , there were no shares issued under the ESPP due to the Company being unable to issue shares associated with ESPP purchases as a result of the previously disclosed requirement to file audited financial statements of INCRELEX® for the years ended December 31, 2023 and 2022 and the nine months ended September 30, 2024 and 2023, as well as unaudited proforma financial information for the years ended December 31, 2024 and 2023, related to the purchase of INCRELEX® from Ipsen S.

As of June 30, 2025 and December 31, 2024 , the accompanying Condensed Balance Sheet include $ 35 and $ 42 , respectively, in accrued liabilities for employee ESPP contributions.

The Company recorded an expense of $ 30 and $ 145 related to the ESPP during the nine -month periods ended September 30, 2025 and 2024 , respectively.

During the nine- month periods ended September 30, 2025 , there were no shares issued under the ESPP due to the Company being unable to issue shares associated with ESPP purchases as a result of the previously disclosed requirement to file audited financial statements of INCRELEX® for the years ended December 31, 2023 and 2022 and for the nine months ended September 30, 2024 and 2023, as well as unaudited proforma financial information for the years ended December 31, 2024 and 2023, related to the purchase of INCRELEX® from Ipsen S.

As of September 30, 2025 and December 31, 2024 , the accompanying Condensed Balance Sheet include $ 145 and $ 42 , respectively, in accrued liabilities for employee ESPP contributions.

Eton Pharmaceuticals, Inc.

2 unchanged sentences

Note 8 — Basic and Diluted Net Loss per Common Share

For the three and six months ended June 30, 2025 and 2024, basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period and includes common stock equivalents (using the treasury stock and “if converted” method) from stock options, RSUs, and warrants.

For the three months ended June 30, 2025 and 2024, 7,425,645 and 6,636,723 , respectively, in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive.

For the six months ended June 30, 2025 and 2024, 7,183,998 and 6,284,721 , respectively, in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive.

During the three and six months ended June 30, 2025 and 2024, included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director retires from service as a director.

For the three and nine months ended September 30, 2025 and 2024, basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period and includes common stock equivalents (using the treasury stock and “if converted” method) from stock options, RSUs, and warrants.

For the three months ended September 30, 2025 and 2024, 7,087,170 and 4,896,038 , respectively, in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive.

For the nine months ended September 30, 2025 and 2024, 7,633,966 and 6,319,907 , respectively, in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive.

During the three and nine months ended September 30, 2025 and 2024, included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director retires from service as a director.

The following table shows the computation of basic and diluted net loss per common share:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

$ ( 1,927 ) $ 627 $ ( 6,084 ) $ ( 3,225 )

Weighted average common shares outstanding (basic and diluted)

Weighted average common shares outstanding, basic

26,893,000 25,900,000 26,891,000 25,814,000

Net loss per share, basic and diluted

Net income (loss) per share, basic

$ ( 0.07 ) $ 0.02 $ ( 0.23 ) $ ( 0.12 )

Weighted average common shares outstanding, diluted

26,893,000 26,550,000 26,891,000 25,814,000

Net income (loss) per share, diluted

$ ( 0.07 ) $ 0.02 $ ( 0.23 ) $ ( 0.12 )

Note 9 — Income Taxes

The following table summarizes the Company's income tax expense and effective tax rates for the three and six months ended June 30, 2025 and 2024 :

The following table summarizes the Company's income tax expense and effective tax rates for the three and nine months ended September 30, 2025 and 2024 :

Three Months Ended

Six Months Ended

Loss before income taxes

Income tax expense

Nine Months Ended

September 30,

Income (loss) before income taxes

$ ( 1,955 ) $ 501 $ ( 5,972 ) $ ( 3,297 )

Income tax expense (benefit)

( 28 ) ( 126 ) 112 ( 72 )

Effective tax rate

1.4 % ( 25.1 %) ( 1.9 %) 2.2 %.

The Company’s quarterly income tax provision is calculated under the discrete method, which treats the interim period as if it were the annual period and determines the income tax expense or benefit on that basis.

The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate.

The Company believes, at this time, the use of the discrete method is more appropriate as the annual effective tax rate cannot be reliably estimated given the Company's full valuation allowance recorded on its deferred tax assets and annual utilization limitations that prevent the Company from fully offsetting its expected current income tax liabilities with its available net operating loss and income tax credits.

Subsequent to the end of the fiscal second quarter, on July 4, 2025, the United States enacted into law new tax legislation, the One Big Beautiful Bill Act, (OBBBA).

The OBBBA includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes and changes to the Medicaid program.

For Medicaid, the law requires states to establish work requirements and more frequent redeterminations, and cost sharing for the Expansion program over the period from 2027 to 2029, among other modifications.

These changes are expected to reduce enrollment in state Medicaid programs, but the timing and magnitude of the reductions may vary by state depending on how quickly states implement the changes, as well as macroeconomic factors since some changes are subject to suspension in case of increases in local unemployment rates.

The law also reduces revenues that states can raise through provider taxes to finance their share of Medicaid spending and limits payments to Medicaid providers to 100 percent of the mandated Medicare rate for Expansion states and 110 percent of the Medicare rate for non-Expansion states.

These particular changes are scheduled to begin in 2028, and we expect may take 5 to 15 years to be fully implemented.

Their impact is uncertain at this time and will depend on how states may adapt their future tax and Medicaid funding policies in response.

The Company is currently evaluating the impacts of the bill, but does not anticipate the impact in 2025 to be material.

The discrete method is applied when application of the estimated annual effective income tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate.

The Company believes, at this time, the use of this discrete method is more appropriate as the annual effective income tax rate cannot be reliably estimated given the Company's full valuation allowance recorded on its net deferred tax assets and annual utilization limitations that prevent the Company from fully offsetting its expected current income tax liabilities with its available net operating losses and income tax credits.

The Company's quarterly income tax provision calculated under the discrete method for the period ended September 30, 2025 captures the income tax effects of the One Big Beautiful Bill Act (“OBBBA”), which was enacted on July 4, 2025.

The Company's current income tax expense for the period ended September 30, 2025 includes the benefit of the OBBBA restoring the ability to immediately deduct domestic research & experimental expenditures under Internal Revenue Code Section 174.

The Company did not record any deferred income tax expense or benefit related to the OBBBA tax law changes during the period ended September 30, 2025 as the Company continues to record a full valuation allowance against its net deferred tax assets.

The effective tax rate for the three months and nine months ended September 30, 2025 varies from the three months and nine months ended September 30, 2024 primarily as a result of the Company's valuation allowance recorded against its net deferred tax assets and annual tax attribute limitations that result in current income tax expense.

Income taxes paid during the nine months ended September 30, 2025 and 2024 were $ 117 and $ 181 , respectively.

Note 10 — Related-Party Transactions

15 unchanged sentences

The Company removed its existing ROU asset and liability and recorded $ 330 in ROU assets, $ 189 in tenant improvement allowances and $ 519 in operating lease liabilities in association with the lease extension.

The Company’s operating lease cost for the six months ended June 2025 and 2024 as presented as G&A in the Condensed Statements of Operations was $ 43 and $ 39 , respectively.

For the six months ended June 30, 2025 and 2024 , cash paid for amounts included in the measurement of operating lease liabilities was $ 45 and $ 13 , respectively.

The ROU asset non-cash lease expense for the six months ended June 30, 2025 and 2024 was $ 30 and $ 36 , respectively, and is reflected within non-cash lease expense on the Company’s Condensed Statements of Cash Flows.

The table below presents the lease-related assets and liabilities recorded on the balance sheet as of June 30, 2025 and December 31, 2024 (in thousands).

The Company’s operating lease cost for the nine months ended September 2025 and 2024 as presented as G&A in the Condensed Statements of Operations was $ 36 and $ 61 , respectively.

For the nine months ended September 30, 2025 and 2024 , cash paid for amounts included in the measurement of operating lease liabilities was $ 68 and $ 35 , respectively.

The ROU asset non-cash lease expense for the nine months ended September 30, 2025 and 2024 was $ 35 and $ 53 , respectively, and is reflected within non-cash lease expense on the Company’s Condensed Statements of Cash Flows.

The table below presents the lease-related assets and liabilities recorded on the balance sheet as of September 30, 2025 and December 31, 2024 (in thousands).

September 30,

Classification

7 unchanged sentences

Total operating lease liabilities

The Company’s future lease commitments as of June 30, 2025 , are as indicated below:

The Company’s future lease commitments as of September 30, 2025 , are as indicated below:

2025 (Remainder)

55 unchanged sentences

In addition, the Company will also make payments to seller of $ 2,500 on each of the first and second anniversaries of closing.

As of June 30, 2025, the present value of the deferred consideration was $ 4,522 , with $ 478 to be accreted to interest expense over the remainder of the deferred consideration term using the effective interest rate method.

As of June 30, 2025, $ 2,500 was classified as accrued liabilities and $ 2,022 was classified as other long-term liabilities in the accompanying Condensed Balance Sheet.

In June 2025, in connection with the asset purchase agreement with Ipsen S.A, the Company purchased $ 11,540 in inventory.

Under the terms of the inventory purchase agreement, the Company will be required to make eight equal quarterly installment payments to Ipsen S.A, beginning in the third quarter of 2025.

Accordingly, the Company has classified $ 6,949 in accounts payable and $ 6,949 as a long-term inventory payable in in the accompanying Condensed Balance Sheet.

As of September 30, 2025, the present value of the deferred consideration was $ 4,643 , with $ 357 to be accreted to interest expense over the remainder of the deferred consideration term using the effective interest rate method.

As of September 30, 2025, $ 2,500 was classified as accrued liabilities and $ 2,143 was classified as other long-term liabilities in the accompanying Condensed Balance Sheet.

In March 2025, the Company out-licensed the commercial rights to INCRELEX® in territories outside of the U.S.

to Esteve Pharmaceuticals, S.A.

Under the terms of the licensing agreement, Esteve will pay the Company €4,000 up front to license the rights to INCRELEX® for up to ten years, and Esteve is also receiving an option to acquire the international rights in the future for a purchase price of up to €6,000.

In addition, the Company also entered into a supply agreement and will supply product to Esteve at a fixed transfer price.

Under the terms of the licensing agreement, Esteve paid the Company in July 2025 €4,000 to license the rights to INCRELEX® for up to ten years, and Esteve also received an option to acquire the international rights in the future for a purchase price of up to €6,000.

In accordance with the accounting pronouncement guidance in ASC 606 with respect to the license and supply agreements between the Company and Esteve, the Company recognized in March 2025, $ 4,327 in accounts receivable, licensing revenues of $ 1,786 and deferred revenues of $ 2,541 .

With respect to the $ 2,541 in deferred revenues, $ 330 and $ 2,211 are reflected in accrued liabilities and other long-term liabilities, respectively in the Company's Condensed Balance Sheet as of June 30, 2025.

With respect to deferred revenues, $ 457 and $ 1,762 are reflected in accrued liabilities and other long-term liabilities, respectively in the Company's Condensed Balance Sheet as of September 30, 2025.

Deferred revenues will be amortized to licensing revenues over the course of the agreements based on quarterly INCRELEX® product sales, and at the end of the license agreement, a deferred revenue residual will be recognized at the end of the initial term of the license agreement.

During the six months ended June 30, 2025, the Company recognized $ 2,330 in inventory step-up expense associated with the inventory purchase from Ipsen S.A.

In addition, the Company also entered into a supply agreement with Esteve, and beginning in the third quarter of 2025, the Company began supplying product to Esteve at a fixed transfer price.

During the three months ended September 30, 2025, the Company recognized $ 322 in deferred revenues associated with the supply agreement.

In June 2025, in connection with the asset purchase agreement with Ipsen S.A, the Company purchased $ 11,540 in inventory.

Under the terms of the inventory purchase agreement, the Company will be required to make eight equal quarterly installment payments to Ipsen S.A, beginning in the third quarter of 2025.

Accordingly, the Company has classified $ 6,949 in accounts payable and $ 5,188 as a long-term inventory payable in in the accompanying Condensed Balance Sheet.

During the nine months ended September 30, 2025, the Company recognized $ 3,673 in inventory step-up expense associated with the inventory purchase from Ipsen S.A.

Indemnification

2 unchanged sentences

The Company believes the fair value of the indemnification rights and agreements is minimal.

Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of June 30, 2025 or December 31, 2024 .

Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of September 30, 2025 or December 31, 2024 .

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

12 unchanged sentences

Results of Operations (dollars in thousands)

During the three months ended June 30, 2025, we had $18,928 in total revenues that generated a gross profit of $11,924 compared to total revenues of $9,074 during the three-month period ended June 30, 2024 that generated a gross profit of $5,626 for the period.

During the three months ended September 30, 2025, we had $22,459 in total revenues that generated a gross profit of $7,855 compared to total revenues of $10,324 during the three-month period ended September 30, 2024 that generated a gross profit of $6,302 for the period.

The increase in product sales and royalties, net was the result of increased sales of ALKINDI SPRINKLE® and the addition of revenues from INCRELEX® and GALZIN® products in the current period.

During the six months ended June 30, 2025, we had $36,210 in total revenues that generated a gross profit of $21,785 compared to total revenues of $17,040 during the six-month period ended June 30, 2024 that generated a gross profit of $10,633 for the period.

During the six months ended June 30, 2025, we had product sales and royalties, net of $32,924, compared to product sales and royalties, net of $17,040 during the six months ended June 30, 2024, an increase of $15,884.

The increase in product sales and royalties, net was the result of increased sales of our INCRELEX®, ALKINDI SPRINKLE® and GALZIN® products in the current period.

Licensing revenue during the six months ended June 30, 2025 was $3,286, compared to $0 licensing revenue during the six months ended June 30, 2024.

The increase in licensing revenue during the six months ended June 30, 2025 was due to $1,786 from our out-licensing of INCRELEX® rights outside of the U.S.

During the nine months ended September 30, 2025, we had $58,669 in total revenues that generated a gross profit of $29,640 compared to total revenues of $27,364 during the nine-month period ended September 30, 2024 that generated a gross profit of $16,935 for the period.

During the nine months ended September 30, 2025, we had product sales and royalties, net of $55,383, compared to product sales and royalties, net of $26,864 during the nine months ended September 30, 2024, an increase of $28,519.

The increase in product sales and royalties, net was the result of increased sales of our INCRELEX® and incremental revenues from ALKINDI SPRINKLE® and GALZIN® products in the current period.

Licensing revenue during the nine months ended September 30, 2025 was $3,286 compared to $500 in licensing revenue during the nine months ended September 30, 2024.

The increase in licensing revenue during the nine months ended September 30, 2025 was due to $1,786 from our out-licensing of INCRELEX® rights outside of the U.S.

and $1,500 from the recognition of a development milestone event associated with our divestiture of DS-200.

Research and Development Expenses

During the three months ended June 30, 2025, we incurred $3,712 of research and development (“R&D”) expenses as compared to $2,970 for the same period in 2024.

During the six months ended June 30, 2025, we incurred $4,873 of R&D expenses as compared to $3,621 for the same period in 2024.

During the three months ended September 30, 2025, we incurred $1,112 of research and development (“R&D”) expenses as compared to $505 for the same period in 2024.

During the nine months ended September 30, 2025, we incurred $5,985 of R&D expenses as compared to $4,126 for the same period in 2024.

The increase was primarily due to a $2,155 NDA filing fee for ET-600 and increased expenses associated with our ET-700 and ET-800 project development activities.

1 unchanged sentence

G&A expenses consist primarily of employee compensation expenses, legal and professional fees, product marketing expenses, distribution expenses, business insurance, travel expenses, and general office expenses.

During the three-month periods ended June 30, 2025 and 2024, we incurred $9,687 and $5,591, respectively, of G&A expenses.

During the six-month periods ended June 30, 2025 and 2024, we incurred $18,857 and $10,747, respectively, of G&A expenses.

The increase in G&A expenses during the six months ended June 30, 2025 was primarily attributable to an increase in product advertising and promotional expenses, an increase in stock-based compensation expense and an increase in compensation and benefit expenses due to an increase in general and administrative headcount.

During the three-month periods ended September 30, 2025 and 2024, we incurred $8,106 and $5,288, respectively, of G&A expenses.

During the nine-month periods ended September 30, 2025 and 2024, we incurred $26,963 and $16,035, respectively, of G&A expenses.

The increase in G&A expenses during the nine months ended September 30, 2025 was primarily attributable to an increase in product advertising and promotional expenses, higher stock-based compensation expense and an increase in compensation and benefit expenses due to an increase in general and administrative headcount during the current year.

Liquidity and Capital Resources

As of June 30, 2025, we had total assets of $101.7 million, cash and cash equivalents of $25.4 million and working capital of $29.8 million.

As of September 30, 2025, we had total assets of $104.5 million, cash and cash equivalents of $37.1 million and working capital of $27.8 million.

We believe that our cash and cash equivalents on hand, along with continued product revenues, will be sufficient for at least the next twelve months of our operations.

However, our projected estimates for our product development spending, administrative expenses, and our working capital requirements could be inaccurate, or we may experience growth more quickly or on a larger scale than we expect, any of which could result in the depletion of capital resources more rapidly than anticipated and could require us to seek additional financing earlier than we expect to support our operations.

The following table sets forth a summary of our cash flows for the six-month periods ended June 30, 2025 and 2024 (dollars in thousands):

Six months ended

June 30, 2025

June 30, 2024

The following table sets forth a summary of our cash flows for the nine-month periods ended September 30, 2025 and 2024 (dollars in thousands):

Nine months ended

September 30, 2025

September 30, 2024

Net cash from (used in) operating activities

2 unchanged sentences

Change in cash and cash equivalents

The increase in cash from operating activities during the six months ended June 30, 2025 was primarily due to higher cash collections from product sales, a filing fee refund from the FDA related to ET-400 and the collection of a licensing milestone payment.

During the six months ended June 30, 2024, net cash from investing activities was $1,882, which reflected $1,868 payment associated with the acquisition of the PKU GOLIKE® product license in March 2024.

During the six months ended June 30, 2025, net cash provided by financing activities was $394 and was associated with proceeds from stock option exercises, compared to net cash used by financing activities during the six months ended June 30, 2024 of $594, which reflected $770 repayment of debt and proceeds of $176 from stock option exercises during the six months ended June 30, 2024.

During the nine months ended September 30, 2025, net cash from operating activities was $22,075 compared to net cash from operating activities of $1,734 during the nine months ended September 30, 2024.

The increase in cash from operating activities during the nine months ended September 30, 2025 was primarily due to higher cash collections from product sales, an increase in accrued Medicaid rebates, a filing fee refund from the FDA related to ET-400 and the collection of a licensing milestone payment.

During the nine months ended September 30, 2025, net cash used in investing activities was $284 compared to net cash used in investing activities of $1,882 during the nine months ended September 30, 2024.

The decrease in net cash used in investing activities was primarily attributable to a $1,868 payment associated with the acquisition of the PKU GOLIKE® product license in March 2024.

During the nine months ended September 30, 2025, net cash provided by financing activities was $394 compared to net cash used in financing activities of $979 during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, proceeds from stock option exercises was $394 compared to $176 during the nine months ended September 30, 2024.

Additionally, during the nine months ended September 20, 2024, there was $770 in debt repayments compared with zero during the nine months ended September 30, 2025.

Non-GAAP Financial Measures

11 unchanged sentences

For the three months ended

For the six months ended

GAAP net loss

For the nine months ended

September 30,

GAAP net income (loss)

Depreciation (1)

1 unchanged sentence

Interest expense (including debt discount amortization and non-cash interest expenses)

Income tax expense

Income tax expense (benefit)

Other non-GAAP adjustments:

5 unchanged sentences

Adjusted EBITDA

GAAP loss before income tax

GAAP income (loss) before income tax

Non-GAAP adjustments:

8 unchanged sentences

Total non-GAAP adjustments

Non-GAAP Net Income (Loss)

Non-GAAP Net Income

Weighted average number of common shares outstanding, basic

Weighted average number of common shares outstanding, diluted

GAAP loss per share - Basic

GAAP (loss) income per share - Basic

Non-GAAP adjustments

Non-GAAP earnings per share - Basic

GAAP loss per share - Basic

GAAP (loss) income per share - Basic

Non-GAAP adjustments

2 unchanged sentences

Intangible amortization expenses are associated with our intellectual property rights related to INCRELEX®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone.

During the three and six months ended June 30, 2025, we recognized in cost of sales $1,207 and $2,349, respectively, for inventory step-up expense primarily attributable to INCRELEX® inventory revalued in connection with this product acquisition.

During the three and nine months ended September 30, 2025, we recognized in cost of sales $1,324 and $3,673, respectively, for inventory step-up expense primarily attributable to INCRELEX® inventory revalued in connection with this product acquisition.

Represents share-based compensation expense associated with our stock option and restricted stock unit stock unit grants to our employees and non-employee directors and our employee share purchase plan.

26 unchanged sentences

We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time.

For the six months ended June 30, 2025 and 2024, all revenues recognized in the Condensed Statements of Operations were point in time sales to our customers.

For the nine months ended September 30, 2025 and 2024, all revenues recognized in the Condensed Statements of Operations were point in time sales to our customers.

Milestone Payments – If a commercial contract arrangement includes development milestone payments, we will evaluate whether the milestone conditions have been achieved and if it is probable that a significant revenue reversal would not occur before recognizing the associated revenue.

6 unchanged sentences

Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied.

Principal Versus Agent – Under the terms of the transitional services agreement (“TSA”) between us and Ipsen S.A, we evaluate whether our performance obligation is a promise to transfer product to a customer as the principal, or to arrange for product to be provided by another party using a control model as the agent.

This evaluation determined that we are not in control of establishing the transaction price, managing all aspects of the shipment process and taking the risk of loss for delivery, collection and returns.

Based on the our evaluation of the control model, we determined that our responsibilities under the TSA was as an agent and not the principal, and correspondingly, such revenue related to products sold by Ipsen S.A are reported on a net versus a gross basis.

Significant Financing Component – In determining the transaction price, we will adjust consideration for the effects of the time value of money if the expected period between payment by the licensees and the transfer of the promised goods or services to the licensees will be more than one year.

34 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements