What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-14 · 304 added, 172 removed, 655 unchanged (42% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2026

June 30, 2026

December 31, 2025

24 unchanged sentences

45,124 38,490

Long-term debt, net of current portion and debt discount

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

19,078 21,769

7 unchanged sentences

50,000,000 shares authorized;

27,359,791 and 27,047,061 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

28,289,941 and 27,047,061 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

11 unchanged sentences

For the three months ended

For the six months ended

Product sales, net

$ 37,589 $ 18,928 $ 61,855 $ 32,924

Licensing revenue

Product sales and royalties, net

Total net revenues

37,589 18,928 61,855 36,210

Cost of sales:

Product sales and royalties, net

12,176 7,004 21,707 13,600

Licensing revenue

Product sales and royalties

Total cost of sales

12,176 7,004 21,707 14,425

25,413 11,924 40,148 21,785

Operating expenses:

Research and development

993 3,712 2,868 4,873

General and administrative

11,626 9,687 22,072 18,857

Total operating expenses

12,619 13,399 24,940 23,730

Income (loss) from operations

12,794 ( 1,475 ) 15,208 ( 1,945 )

Other expense:

Interest and other expense, net

( 1,076 ) ( 1,044 ) ( 1,916 ) ( 2,072 )

Income (loss) before income tax expense

11,718 ( 2,519 ) 13,292 ( 4,017 )

Income tax expense

140 66 160 140

Net income (loss)

$ 11,578 $ ( 2,585 ) $ 13,132 $ ( 4,157 )

Net income (loss) per share, basic

$ 0.42 $ ( 0.10 ) $ 0.48 $ ( 0.15 )

Weighted average number of common shares outstanding, basic

27,642 26,893 27,444 26,889

Net income (loss) per share, diluted

$ 0.35 $ ( 0.10 ) $ 0.41 $ ( 0.15 )

Weighted average number of common shares outstanding, diluted

32,787 26,893 32,298 26,889

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 March 31, 2026 and 2025

For the three months ended June 30, 2026 and 2025

(in thousands, except share amounts)

1 unchanged sentence

Total Stockholders’

Balances at December 31, 2025

Balances at March 31, 2026

27,359,791 $ 27 $ 141,528 $ ( 110,940 ) $ 30,615

Stock-based compensation

— — 1,468 — 1,468

Stock option exercises and vesting of restricted stock

612,903 1 2,653 — 2,654

Exercise of warrants, net of shares withheld

296,215 — — — —

Shares issued under employee stock purchase plan (ESPP)

21,032 — 270 — 270

— — — 11,578 11,578

Balances at June 30, 2026

28,289,941 $ 28 $ 145,919 $ ( 99,362 ) $ 46,585

Additional Paid-in

Total Stockholders’

Balances at March 31, 2025

26,817,535 $ 27 $ 133,888 $ ( 109,465 ) $ 24,450

Stock-based compensation

— — 2,096 — 2,096

— — — ( 2,585 ) ( 2,585 )

Balances at June 30, 2025

26,817,535 $ 27 $ 135,984 $ ( 112,050 ) $ 23,961

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

Eton Pharmaceuticals, Inc.

Condensed Statements of Stockholders ’ Equity

For the six months ended June 30, 2026 and 2025

(in thousands, except share amounts)

Additional Paid-in

1 unchanged sentence

Balances at December 31, 2025

27,047,061 $ 27 $ 138,621 $ ( 112,494 ) $ 26,154

Stock-based compensation

— — 2,986 — 2,986

Stock option exercises and vesting of restricted stock

Balances at March 31, 2025

925,633 1 4,042 — 4,043

Exercise of warrants, net of shares withheld

296,215 — — — —

Shares issued under employee stock purchase plan (ESPP)

21,032 — 270 — 270

— — — 13,132 13,132

Balances at June 30, 2026

28,289,941 $ 28 $ 145,919 $ ( 99,362 ) $ 46,585

Additional Paid-in

Total Stockholders’

Balances at December 31, 2024

26,709,084 $ 27 $ 132,294 $ ( 107,893 ) $ 24,428

Stock-based compensation

— — 3,296 — 3,296

Stock option exercises and vesting of restricted stock

108,451 — 394 — 394

— — — ( 4,157 ) ( 4,157 )

Balances at June 30, 2025

26,817,535 $ 27 $ 135,984 $ ( 112,050 ) $ 23,961

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

2 unchanged sentences

(In thousands)

Three months ended

March 31, 2026

March 31, 2025

Cash flows from (used in) operating activities

Six months ended

June 30, 2026

June 30, 2025

Cash flows from operating activities

Net income (loss)

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

$ 13,132 $ ( 4,157 )

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

Stock-based compensation

4 unchanged sentences

Non-cash lease expense

Other operating activity

Changes in operating assets and liabilities:

Accounts receivable

( 13,129 ) ( 9,092 )

4,725 ( 11,019 )

Prepaid expenses and other assets

2 unchanged sentences

Accrued liabilities

704 ( 1,201 )

Other non-current assets and liabilities

( 3,999 ) 9,372

Net cash from operating activities

14,660 10,049

Cash flows used in investing activities

4 unchanged sentences

Proceeds from stock option exercises

Proceeds from shares issued under the ESPP

Repayment of long-term debt

Net cash from financing activities

1 unchanged sentence

Cash and cash equivalents at beginning of period

25,942 14,936

Cash and cash equivalents at end of period

$ 26,845 $ 25,379

Supplemental disclosures of cash flow information

Cash paid for interest

$ 1,697 $ 852

Cash paid for income taxes

5 unchanged sentences

The Company is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases.

The Company currently has ten commercial rare disease products:

INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone.

The Company currently has eleven commercial rare disease products:

INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, IMPAVIDO®, Carglumic Acid, Betaine Anhydrous and Nitisinone, with IMPAVIDO® scheduled for commercialization in September 2026.

The Company has four additional product candidates in late-stage development:

3 unchanged sentences

The Company has prepared the accompanying condensed financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).

Certain prior period amount have been reclassified to conform to current year presentation in the condensed financial statements and notes to financial statements.

Certain prior period amounts have been reclassified to conform to current year presentation in the condensed financial statements and notes to financial statements.

Unaudited Interim Financial Information

The accompanying interim condensed financial statements are unaudited and have been prepared on the same basis as the audited annual financial statements of the Company and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2026, and the results of its operations and its cash flows for the periods ended March 31, 2026 and 2025.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are also unaudited.

The accompanying interim condensed financial statements are unaudited and have been prepared on the same basis as the audited annual financial statements of the Company and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2026, and the results of its operations and its cash flows for the periods ended June 30, 2026 and 2025.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2026 and 2025 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 19, 2026.

The results for the three months ended March 31, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.

As such, the interim financial statements herein should be read in conjunction with the Company’s latest annual financial statements filed with the U.S.

Securities and Exchange Commission (“SEC”) on Form 10 -K on March 19, 2026.

The results for the three and six months ended June 30, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.

Use of Estimates

10 unchanged sentences

The Company accounts for acquisitions that do not meet the definition of a business as an asset acquisition.

The determination of whether a transaction represents a business combination or an asset acquisition requires significant judgment, including an evaluation of whether the acquired set includes a substantive process and whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets.

The determination of whether a transaction represents a business combination or an asset acquisition requires significant judgment, including an evaluation of whether the acquired asset includes a substantive process and whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets.

For transactions accounted for as asset acquisition, the Company allocates the purchase price, including transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.

3 unchanged sentences

The Company amortizes finite-lived intangible assets over their estimated useful lives and evaluates indefinite-lived assets for impairment.

The determination of useful lives and the timing of impairment assessments require significant judgment and may materially affect the Company’s results of operations.

The determination of useful lives and the timing of impairment assessments requires significant judgment and may materially affect the Company’s results of operations.

Critical estimates in valuing certain of the intangible assets acquired include:

7 unchanged sentences

Segment Information

The Company operates the business on the basis of a single reportable segment, which includes ten commercial rare disease products:

INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone.

The Company operates the business on the basis of a single reportable segment, which includes eleven commercial rare disease products:

INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, IMPAVIDO®, Carglumic Acid, Betaine Anhydrous and Nitisinone.

The Company primarily derives revenues from product sales to a specialty pharmacy customer, AnovoRx , who then provides order fulfillment, inventory storage and distribution services.

In September 2025, the Company terminated its agreement with specialty pharmacy, Optime Care, and transitioned o rder fulfillment, inventory storage and distribution services to AnovoRx.

The Company’s chief operating decision-maker (“CODM”) is the Chief Executive Officer, who evaluates the Company’s financial performance and results of operations as a single operating segment.

3 unchanged sentences

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

For the three months ended March 31, 2026 and 2025, AnovoRx product sales represented 88.9 % and 90.8 % of net revenues, respectively.

As of March 31, 2026 and December 31, 2025, AnovoRx product sales represented 80.7 % and 88.4 % of net accounts receivable.

During the three months ended March 31, 2026 and 2025, the Company's revenues from external customers were entirely derived from U.S operations.

As of March 31, 2026 and December 31, 2025, all long-lived assets were domiciled within the U.S.

For the six months ended June 30, 2026 and 2025, AnovoRx product sales represented 90.4 % and 92.0 % of net product revenues, respectively.

As of June 30, 2026 and December 31, 2025, AnovoRx product sales represented 88.1 % and 88.4 % of net accounts receivable.

During the three and six months ended June 30, 2026 and 2025, the Company's revenues from external customers were entirely derived from U.S.

As of June 30, 2026 and December 31, 2025, all long-lived assets were domiciled within the U.S.

Cash and Cash Equivalents

2 unchanged sentences

financial institutions or invested in short-term U.S.

treasury bills or high-grade money market funds.

treasury bills or high-grade, government money market funds.

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

8 unchanged sentences

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 March 31, 2026 and December 31, 2025, inventories consisted of purchased finished goods, semi-finished goods and raw materials.

As of June 30, 2026 and December 31, 2025 , inventories consisted of purchased finished goods, semi-finished goods and raw materials.

Property and Equipment

5 unchanged sentences

Construction in progress is capitalized but not depreciated until it is placed into service.

Eton Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(in thousands, except share and per share amounts)

Note 2 — Summary of Significant Accounting Policies (continued)

Intangible Assets

The Company has historically capitalized payments it makes for licensed products when the payment is based on Food and Drug Administration (“FDA”) approval or near-term approval for the product and the cost is recoverable based on expected future cash flows from the product.

In January 2026, the Company purchased the licensing rights to a product that has not received FDA approval and accordingly, is classified as In-Process Research and Development (“IPR&D”) within Intangible assets, net on the Company's Condensed Balance Sheets as of March 31, 2026.

In February 2026, the Company entered into a licensing agreement to acquire the U.S.

1 unchanged sentence

The Company accounted for this transaction as an asset acquisition, and after purchase accounting adjustments for inventory step-up costs of $ 1,131 , and including acquisition related expenses of $ 100 , the Company recorded $ 12,969 for the HEMANGEOL® intangible asset which is being amortized over its useful life of ten years.

In May 2026, the Company entered into a licensing agreement to acquire the U.S right to IMPAVIDO® (miltefosine) oral capsules from Knight Therapeutics, Inc., in which the Company will pay $ 4,250 in fixed fees.

The Company capitalized $ 3,304 in intangible assets associated with IMPAVIDO®, which is being amortized over its useful life of ten years.

The Company accounted for this transaction as an asset acquisition

Eton Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(in thousands, except share and per share amounts)

Note 2 — Summary of Significant Accounting Policies (continued)

Intangible assets are 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.

The following table presents the Company's intangible assets as of March 31, 2026 and December 31, 2025:

Intangible assets as of March 31, 2026

The following table presents the Company's intangible assets as of June 30, 2026 and December 31, 2025:

Intangible assets as of June 30, 2026

Carglumic Acid

14 unchanged sentences

3,304 39 3,265

$ 54,535 $ 8,857 $ 45,678

Intangible assets as of December 31, 2025

12 unchanged sentences

$ 37,262 $ 6,384 $ 30,878

The Company recorded $ 1,109 and $ 1,001 of amortization expense for the three months ended March 31, 2026 and March 31, 2025, respectively.

The Company recorded $ 2,473 and $ 2,002 of amortization expense for the six months ended June 30, 2026 and 2025, respectively.

The table below shows the estimated remaining amortization for these products for each of the five years from 2026 to 2030 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 three -month periods ended March 31, 2026 or 2025 .

No impairment was recognized during the six -month periods ended June 30, 2026 or 2025 .

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

15 unchanged sentences

Operating leases are reflected on the Condensed Balance Sheets 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 March 31, 2026 and December 31, 2025 .

The Company does not have any finance leases as of June 30, 2026 and December 31, 2025 .

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.

15 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 March 31, 2026 or December 31, 2025 .

Based upon the review of these factors, the Company recorded no allowance for credit losses at June 30, 2026 or December 31, 2025 .

Revenue Recognition for Contracts with Customers

8 unchanged sentences

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASC 606 , the Company assesses the goods or services promised within each contract and determine those that are performance obligations and assesses whether each promised good or service is distinct.

At contract inception, once the contract is determined to be within the scope of ASC 606 , the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

7 unchanged sentences

The Company recognizes 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 three months ended March 31, 2026 and 2025, all revenues recognized in the Condensed Statements of Operations were point in time sales to the Company's customers.

For the three and six months ended June 30, 2026 and 2025, all revenues recognized in the Condensed Statements of Operations were point in time sales to the Company's customers.

Milestone Payments – If a commercial contract arrangement includes development and regulatory milestone payments, the Company 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.

1 unchanged sentence

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.

The Company sells its INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products to pharmacy distributor customers which provide order fulfilment and inventory storage/distribution services.

The Company sells its products to pharmacy distributor customers which provide order fulfillment and inventory storage/distribution services.

The Company uses a third -party logistics ( “3PL” ) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities.

For the Company's INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment.

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

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

The Company bills for its products at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid and other government program rebates which are recorded as a reduction of net revenues at the date of sale/shipment.

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

The Company estimates the transaction price when it receives each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler/distributor arising from all of the above factors.

The Company has developed estimates for future returns and chargebacks and the impact of other discounts and fees it pays, although INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone sales are not subject to returns.

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

The state Medicaid rebate and related liability are estimated based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rebate rates and estimated lag time of the rebate invoices.

The Company has developed estimates for future returns and chargebacks and the impact of other discounts and fees it pays, The Company's product sales are not subject to returns.

The Company stores its products inventory at its pharmacy distributor customer locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders.

The state Medicaid and other government program rebates and related liabilities are estimated based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rebate rates and estimated lag time of the rebate invoices.

Cost of Sales

21 unchanged sentences

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

No such adjustments were made for the three months ended March 31, 2025 as including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive.

No such adjustments were made for the three and six months ended June 30, 2025 as including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive.

See Note 8 for further information.

4 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 March 31, 2026 and December 31, 2025 , the Company has established a 100 % valuation reserve against its deferred tax assets.

As of June 30, 2026 and December 31, 2025 , the Company has established a 100 % valuation reserve against its deferred tax assets.

See Note 9 for further information.

40 unchanged sentences

Note 3 — Long-Term Debt

In November 2019 , the Company entered into a credit agreement (the “SWK Credit Agreement”) with SWK Funding LLC (“SWK”), which provided for up to $ 10,000 in debt financing.

In November 2019 , the Company entered into a credit agreement (the “SWK Credit Agreement”) with SWK Funding LLC (“SWK”), which was subsequently acquired in 2026 by Runway Growth Finance Corp (“Runway Growth Finance”).

The SWK Credit Agreement provided for up to $ 10,000 in debt financing.

As a result of subsequent amendments to the SWK Credit Agreement, the Company expanded its 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 %.

Interest payments are payable quarterly, with quarterly principal payments of $ 3,000 beginning in May 2026 with a final principal payment of $ 9,000 due at maturity in December 2027 .

The SWK Credit Agreement includes a 5.0 % exit fee payable at maturity and this exit fee payable will be accreted to interest expense in the Company's Statement of Operations using the effective interest expense method.

In April 2026, the Company entered into a sixth amendment to its credit agreement with SWK.

Under the amended terms of the SWK credit agreement, the credit facility was increased to $ 40,000 , the interest rate was reduced from SOFR plus 6.75 % to SOFR plus 6.55 % with the SOFR floor reduced to 2.75 % from the previous 5.0 %.

Further, the interest only period was extended to November 2026.

There were no fees paid to SWK associated with the credit amendment and the amended credit agreement maturity date remained in December 2027.

Interest payments are payable quarterly, with quarterly principal payments of $ 3,000 due beginning in November 2026 with a final principal payment of $ 12,000 due at maturity in December 2027 .

The SWK Credit Agreement includes a 5.0 % exit fee payable at maturity and this exit fee payable is being accreted to interest expense in the Company's Condensed Statement of Operations using the effective interest expense method.

The SWK Credit Agreement contains a mandatory prepayment clause that can compel the Company to partially prepay the loan upon certain triggering events, which the Company has deemed to be remote.

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

As of March 31, 2026 and December 31, 2025, the Company was in compliance with all financial covenants.

During the three months ended March 31, 2026 and 2025, the Company recorded interest expense of $ 1,136 and $ 1,163 , respectively, which included $ 118 and $ 294 , respectively, of debt discount amortization and non-cash interest expense.

The Company had accrued interest of $ 431 and $ 425 as of March 31, 2026 and December 31, 2025, respectively, which is included in accrued liabilities in the accompanying Condensed Balance Sheets.

The table below reflects the future payments for the SWK loan principal as of March 31, 2026 .

As of June 30, 2026 and December 31, 2025, the Company was in compliance with all financial covenants.

In June 2026, Runway Growth Finance exercised 51,239 common stock warrants at an exercise price of $ 5.86 , exercised 18,141 common stock warrants at an exercise price of $ 6.62 and exercised 289,736 common stock warrants at an exercise price of $ 5.32 .

The weighted average fair market value of $ 31.19 was based on a ten -day weighted average closing price of the Company's closing common stock price, which resulted in a net cashless settlement of 296,215 shares issued of the Company's common stock.

As of June 30, 2026, there are no outstanding common stock warrants.

During the six months ended June 30, 2026 and 2025, the Company recorded interest expense of $ 2,149 and $ 2,361 , respectively, which included $ 278 and $ 342 , respectively, of debt discount amortization and non-cash interest expense.

The Company had accrued interest of $ 356 and $ 425 as of June 30, 2026 and December 31, 2025, respectively, which is included in accrued liabilities in the accompanying Condensed Balance Sheets.

The table below reflects the future payments for the SWK loan principal as of June 30, 2026 .

Total payments

unamortized discount

accrued exit fees at March 31, 2026

accrued exit fees at June 30, 2026

Eton Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(in thousands, except share and per share amounts)

Note 4 — Property and Equipment

5 unchanged sentences

accumulated depreciation and amortization

( 114 ) ( 486 )

Property and equipment, net

Depreciation expense for the three months ended March 31, 2026 and 2025 was $ 22 and $ 12 , respectively.

Eton Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(in thousands, except share and per share amounts)

Depreciation expense for the six months ended June 30, 2026 and 2025 was $ 44 and $ 16 , respectively.

During the second quarter of 2026, the Company removed from property and equipment fully depreciated assets that are no longer in service.

Note 5 — Inventory

As of March 31, 2026 and December 31, 2025, inventory consisted of the following

As of June 30, 2026 and December 31, 2025, inventory consisted of the following

Raw materials

2 unchanged sentences

excess and obsolete inventory reserve

( 890 ) ( 1,199 )

Inventory, net

Inventory reserves were $ 649 and $ 1,199 at March 31, 2026 and December 31, 2025 , respectively.

$ 10,143 $ 15,419

Inventory reserves were $ 890 and $ 1,199 at June 30, 2026 and December 31, 2025 , respectively.

Note 6 — Common Stock

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 three months ended March 31, 2026 , the Company issued 312,730 shares of its common stock resulting from stock option exercises and vesting of restricted stock units under its 2018 Equity Incentive Plan as amended in December 2020 (the “2018 Plan”) .

During the three months ended March 31, 2025 the Company issued 108,451 shares of its common stock resulting from stock option exercises under its 2018 Plan.

Note 7 — Common Stock Warrants

The Company’s outstanding warrants to purchase shares of its common stock at March 31, 2026 are summarized in the table below.

Description of Warrants

Warrant Issuance Date

Exercise Price

SWK Warrants – Debt – Tranche #1

SWK Warrants – Debt – Tranche #2

SWK Warrants – Debt – Tranche #3

Total shares and weighted average exercise price

The holders of these warrants or their permitted transferees, are entitled to rights with respect to the registration under the Securities Act of 1933, as amended (the “Securities Act”) of their shares that are converted to common stock, including demand registration rights and piggyback registration rights.

These rights are provided under the terms of a registration rights agreement between the Company and the investors.

The issuance of these warrants was accounted for as equity and the fair value of the warrants issued were classified to additional paid-in capital in the Company's Condensed Balance Sheets.

During the six months ended June 30, 2026 , the Company issued 925,633 shares of its common stock resulting from stock option exercises and vesting of restricted stock units under its 2018 Equity Incentive Plan as amended in December 2020 (the “2018 Plan”), 296,215 shares of its common stock resulting from the exercise of warrants and 21,032 shares of its common stock under the Company’s 2018 Employee Stock Purchase Plan (“ESPP”).

During the six months ended June 30, 2025, the Company issued 108,451 shares of its common stock resulting from stock option exercises under the 2018 Plan.

Note 7 — Share-Based Payment Awards

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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 1,301,548 shares available for future issuance under the 2018 Plan as of March 31, 2026.

There were 1,457,446 shares av ailable for future issuance under the 2018 Plan as of June 30, 2026.

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

Non-qualified stock options typically have a ten -year life and non-qualified stock options that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan.

In addition, the 2018 Plan provides that commencing January 1, 2019 and through January 1, 2028, the share reserve will be increased by 4 % of the total number of shares outstanding as of the preceding December 31, subject to a reduction at the discretion of the Company’s board of directors.

In addition, the 2018 Plan provides that commencing January 1, 2019 through January 1, 2028, the share reserve will be increased by 4 % of the total number of shares outstanding as of the preceding December 31, subject to a reduction at the discretion of the Company’s board of directors.

On January 1, 2025, the share reserve was increased by 1,068,323 shares based on the 26,709,084 shares of common stock outstanding at December 31, 2024.

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

For the three months ended March 31, 2026 and 2025 , the Company’s total stock-based compensation expense was $ 1,518 and $ 1,200 , respectively.

Of these amounts, $ 1,469 and $ 1,161 were recorded in general and administrative (“G&A”) expenses during the three months ended March 31, 2026 and 2025, respectively, and $ 49 and $ 39 were recorded in research and development expenses for the three months ended March 31, 2026 and 2025, respectively.

For the six months ended June 30, 2026 and 2025, the Company’s total stock-based compensation expense was $ 2,986 and $ 3,296 , respectively.

Of these amounts, $ 2,887 and $ 3,214 were recorded in general and administrative (“G&A”) expenses during the six months ended June 30, 2026 and 2025, respectively, and $ 99 and $ 82 were recorded in research and development expenses during the six months ended June 30, 2026 and 2025, respectively.

Eton Pharmaceuticals, Inc.

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Stock Options

The following table summarizes stock option activity during the three months ended March 31, 2026 :

The following table summarizes stock option activity during the six months ended June 30, 2026 :

Outstanding as of December 31, 2025

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Forfeited/Cancelled

Outstanding as of March 31, 2026

( 172,094 ) $ 9.64

Options exercisable as of March 31, 2026

Outstanding as of June 30, 2026

5,405,711 $ 6.51 6.0 $ 160,499

Options vested and expected to vest at March 31, 2026

Options exercisable as of June 30, 2026

4,182,594 $ 5.22 5.2 $ 129,563

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 March 31, 2026 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 $ 888 and $ 929 for the three -month periods ended March 31, 2026 and 2025 , respectively.

As of March 31, 2026 , there was a total of $ 9,166 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 3.0 years.

During the three months ended March 31, 2026, the Company issued 272,597 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $ 5.13 per share with an intrinsic value of $ 3,473 .

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

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, 2026 for those stock options that had strike prices lower than the fair value of the Company’s common stock.

The assumptions used to calculate the estimated fair value of options granted during the six months ended June 30, 2026 and 2025 under the BSM were as follows:

June 30, 2026

June 30, 2025

Expected dividends

Expected volatility

Risk-free interest rate

3.7 - 4.2 % 3.9 - 4.7 %

Expected term (in years)

Weighted average grant date fair value

$ 10.62 $ 8.43

Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options granted to employees and directors, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years).

The expected term of options granted to non-employees equals the contractual life of the options.

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

Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S.

Treasury instruments with maturities similar to the expected term of the Company’s stock options.

Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Fair value of Common Stock —The Company uses the closing stock price on the date of grant for the fair value of the common stock.

Stock based compensation related to stock options was $ 1,864 and $ 1,756 for the six -month periods ended June 30, 2026 and 2025 , respectively.

As of June 30, 2026 , there was a total of $ 7,983 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 2.9 years.

During the six months ended June 30, 2026, the Company issued 884,190 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $ 4.68 per share with an intrinsic value of $ 21,254 .

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

Restricted Stock Units (RSUs)

The following table summarizes restricted stock unit activity during the three months ended March 31, 2026 :

The following table summarizes restricted stock unit activity during the six months ended June 30, 2026 :

Number of Units

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( 51,277 ) $ 11.07

Outstanding and unvested as of March 31, 2026

( 52,515 ) $ 14.57

Stock-based compensation related to RSUs was $ 521 and $ 190 for the three -month periods ended March 31, 2026 and 2025 , respectively.

As of March 31, 2026 , there was $ 6,054 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 3.0 years.

Outstanding and unvested as of June 30, 2026

478,334 $ 13.03

Eton Pharmaceuticals, Inc.

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Note 7 — Share-Based Payment Awards (continued)

Stock-based compensation expense related to RSUs was $ 1,002 and $ 1,582 for the six -month periods ended June 30, 2026 and 2025 , respectively.

As of June 30, 2026 , there was $ 5,163 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 3.1 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 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 March 31, 2026 , there were 975,687 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.

The 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 common stock, subject to reduction at the discretion of the Company’s board of directors.

As of June 30, 2026 , there were 954,655 shares available for issuance under the ESPP.

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

The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of ( 1 ) 85 % of the fair market value of a share of common stock on the first date of an offering or ( 2 ) 85 % of the fair market value of a share of common stock on the date of purchase.

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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 an expense of $ 109 and $ 81 related to the ESPP during the three -month periods ended March 31, 2026 and 2025 , respectively.

As of March 31, 2026 and December 31, 2025 , the accompanying Condensed Balance Sheets include $ 258 and $ 45 , respectively, in accrued liabilities for employee ESPP contributions.

Note 9 — Basic and Diluted Net Loss per Common Share

For the three months ended March 31, 2026 and 2025, basic and diluted net income (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, ESPP and warrants.

For the three months ended March 31, 2025, 4,130,700 , in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect was anti-dilutive.

During the three months ended March 31, 2026 and 2025, 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 Company recorded an expense of $ 120 and a credit to income of $ 42 related to the ESPP during the six -month periods ended June 30, 2026 and 2025 , respectively.

As of June 30, 2026 and December 31, 2025 , the accompanying Condensed Balance Sheets include $ 53 and $ 45 , respectively, in accrued liabilities for employee ESPP contributions.

Note 8 — Basic and Diluted Net Income (Loss) per Common Share

For the three and six months ended June 30, 2026 and 2025, basic and diluted net income (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, ESPP and warrants.

For the three and six months ended June 30, 2025, 7,425,645 and 7,183,998 , respectively, in common stock equivalents are excluded from the calculation of diluted net loss per share because the effect was anti-dilutive.

During the three and six months ended June 30, 2026 and 2025, included in the basic and diluted net income (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

Net income (loss)

$ 11,578 $ ( 2,585 ) $ 13,132 $ ( 4,157 )

Weighted average common shares outstanding, basic

27,642,000 26,893,000 27,444,000 26,889,000

Net income (loss) per share, basic

$ 0.42 $ ( 0.10 ) $ 0.48 $ ( 0.15 )

Weighted average common shares outstanding, diluted

32,787,000 26,893,000 32,298,000 26,889,000

Net income (loss) per share, diluted

$ 0.35 $ ( 0.10 ) $ 0.41 $ ( 0.15 )

Note 9 — Income Taxes

The following table summarizes the Company's income tax expense and effective tax rates for the three months ended March 31, 2026 and 2025 :

The following table summarizes the Company's income tax expense and effective tax rates for the three and six months ended June 30, 2026 and 2025 :

Three Months Ended

Six Months Ended

Income (loss) before income taxes

$ 11,718 $ ( 2,519 ) $ 13,292 $ ( 4,017 )

Income tax expense

140 66 160 140

Effective tax rate

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 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 March 31, 2026 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 March 31, 2026 includes the benefit of the OBBBA restoring the ability to immediately deduct domestic research and 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 March 31, 2026 as the Company continues to record a full valuation allowance against its net deferred tax assets.

The effective tax rate for the three months ended March 31, 2026 varies from the three months ended March 31, 2025 primarily as a result of the Company's valuation allowance recorded against it net deferred tax assets and annual tax attribute limitations that result in current income tax expense.

Taxes paid during the three months ended March 31, 2026 and 2025 were $ 37 and $ 8 , respectively.

Tax refunds received during the three months ended March 31, 2026 and 2025 were $ 109 and $ 0 , respectively.

1.2 % ( 2.6 %) 1.2 % ( 3.5 %)

Eton Pharmaceuticals, Inc.

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(in thousands, except share and per share amounts)

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's quarterly income tax provision calculated under the discrete method for the three months and six months ended June 30, 2026 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 three months and six months ended June 30, 2026 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 June 30, 2026 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 six months ended June 30, 2026 varies from the three months and six months ended June 30, 2025 primarily as a result of the Company's valuation allowance recorded against its net deferred tax assets and annual tax attribute utilization limitations that result in current income tax expense.

Taxes paid during the six months ended June 30, 2026 and 2025 were $ 85 and $ 89 , respectively.

Tax refunds received during the six months ended June 30, 2026 and 2025 were $ 109 and $ 0 , respectively.

Note 10 — Related-Party Transactions

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The Company removed its existing ROU asset and liability and recorded $ 333 in ROU assets, $ 189 in tenant improvement allowances and $ 522 in operating lease liabilities in association with the lease extension.

The Company’s operating lease cost as presented as G&A in the Statements of Operations was $ 24 and $ 22 for the three months ended March 31, 2026 and 2025, respectively.

For the three months ended March 31, 2026 and 2025, cash paid for amounts included in the measurement of operating lease liabilities was $ 25 and $ 23 , respectively.

The ROU asset non-cash lease expense was $ 9 and $ 17 for the three months ended March 31, 2026 and 2025, respectively, and is reflected within non-cash lease expense on the Company’s Condensed Statements of Cash Flows.

As of March 31, 2026 and December 31, 2025, the average remaining lease term was 4.9 and 5.2 years, respectively, and as of March 31, 2026 and December 31, 2025, the average discount rate was 11.8 % for each period.

The table below presents the lease-related assets and liabilities recorded on the balance sheets as of March 31, 2026 and December 31, 2025 :

In May 2026 , the Company entered into an additional office lease agreement for 4,634 square feet.

The lease agreement was effective May 15, 2026 for a fifty-one month period through July 2030.

The Company capitalized $ 849 in ROU assets and recorded $ 849 in operating lease liabilities in association with the lease agreement.

The Company’s operating lease cost was $ 85 and $ 42 for the six months ended June 30, 2026 and 2025, respectively.

For the six months ended June 30, 2026 and 2025, cash paid for operating leases was $ 97 and $ 45 , respectively.

The ROU asset non-cash lease expense was $ 45 and $ 30 for the six months ended June 30, 2026 and 2025, respectively, and is reflected within non-cash lease expense on the Company’s Condensed Statements of Cash Flows.

As of June 30, 2026 and December 31, 2025, the average remaining lease term was 4.4 and 5.2 years, respectively, and the weighted average discount rate was 11.0 % and 11.8 %, respectively, for each period.

The table below presents the lease-related assets and liabilities recorded on the balance sheets as of June 30, 2026 and December 31, 2025 :

Classification

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Operating lease right-of-use assets, net

$ 1,114 $ 310

Total leased assets

$ 1,114 $ 310

Operating lease liabilities, current

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Total operating lease liabilities

The Company’s future lease commitments as of March 31, 2026 , are as indicated below:

$ 1,322 $ 525

The Company’s future lease commitments as of June 30, 2026 , are as indicated below:

2026 (Remainder)

4 unchanged sentences

Total lease liabilities

Note 13 — Commitments and Contingencies

The Company is subject to legal proceedings and claims that may arise in the ordinary course of business.

The Company is not aware of any pending or threatened litigation matters at this time that would have a material impact on the operations of the Company.

Eton Pharmaceuticals, Inc.

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(in thousands, except share and per share amounts)

Note 12 — Commitments and Contingencies

The Company is subject to legal proceedings and claims that may arise in the ordinary course of business.

The Company is not aware of any pending or threatened litigation matters at this time that would have a material impact on the operations of the Company.

License and product development agreements

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In March 2023 , the Company acquired rare disease endocrinology product candidate, ET- 600, from Tulex.

In February 2026, the FDA approved the NDA for ET- 600 (“DESMODA™”) and the Company launched DESMODA™ in March 2026 and was obligated to make a milestone payment of $ 250 (paid in April 2026).

In February 2026, the FDA approved the New Drug Application (“NDA”) for ET- 600 (“DESMODA™”) and the Company launched DESMODA™ in March 2026 and was obligated to make a milestone payment of $ 250 (paid in April 2026).

The Company pays tiered royalties to Tulex of 12.5 % to 17.0 % on net sales of DESMODA™.

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Amglidia was approved by the European Medicines Agency in 2018 and has been granted Orphan Drug Designation by the U.S.

AMMTeK has conducted a post-approval study tracking five years of real-world safety and efficacy in European patients, which will be used to support the Company's s NDA submission.

AMMTeK has conducted a post-approval study tracking five years of real-world safety and efficacy in European patients, which will be used to support the Company's NDA submission.

In July 2025 , the Company paid $ 500 to AMMTek upon the receipt of FDA meeting minutes and under the terms of the licensing agreement, the Company could pay up to $1,850 as follows:

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in December 2025 .

As of March 31, 2026 and December 31, 2025 , the present value of the deferred consideration of $ 2,318 and $ 2,259 , respectively, was classified as accrued liabilities in the Condensed Balance Sheets, with $ 182 and $ 241 as of March 31, 2026 and December 31, 2025, respectively, to be accreted to interest expense over the remainder of the deferred consideration term using the effective interest rate method.

As of June 30, 2026 and December 31, 2025 , the present value of the deferred consideration of $ 2,379 and $ 2,259 , respectively, was classified as accrued liabilities in the Condensed Balance Sheets, with $ 121 and $ 241 as of June 30, 2026 and December 31, 2025, respectively, to be accreted to interest expense over the remainder of the deferred consideration term using the effective interest rate method.

In connection with the INCRELEX® product acquisition, the Company assumed the commercial manufacturing and supply agreement between Simtra BioPharma Solutions and Ipsen Pharma SAS.

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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 deferred revenues, $ 266 and $ 457 , respectively, are reflected in accrued liabilities and $ 1,817 and $ 1,762 , respectively, in other long-term liabilities in the Company's Condensed Balance Sheets as of March 31, 2026 and December 31, 2025 .

With respect to deferred revenues, $ 330 and $ 457 , respectively, are reflected in accrued liabilities and $ 1,617 and $ 1,762 , respectively, in other long-term liabilities in the Company's Condensed Balance Sheets as of June 30, 2026 and December 31, 2025 .

Deferred revenues will be amortized to 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 three months ended March 31, 2026, the Company recognized $ 158 in deferred revenues associated with the supply agreement.

During the six months ended June 30, 2026, the Company recognized $ 430 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 is required to make eight equal quarterly installment payments to Ipsen S.A, beginning in the third quarter of 2025 .

Accordingly , the Company has classified $ 6,817 and $ 6,926 , respectively, in accounts payable and $ 1,704 and $ 3,463 , respectively, in other long-term liabilities in the accompanying Condensed Balance Sheets as of March 31, 2026 and December 31, 2025.

Accordingly , the Company has classified $ 6,884 and $ 6,926 , respectively, in accounts payable and $ 0 and $ 3,463 , respectively, in other long-term liabilities in the accompanying Condensed Balance Sheets as of June 30, 2026 and December 31, 2025.

In February 2026, the Company entered into a licensing agreement to acquire the U.S.

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The Company accounted for this transaction as an asset acquisition.

In May 2026, the Company entered into a licensing agreement for the U.S.

rights to IMPAVIDO® (miltefosine) oral capsules with an affiliate of Knight Therapeutics, Inc.

(“Knight Therapeutics”).

Under the terms of the licensing agreement, the Company will pay Knight Therapeutics $ 4,250 in fixed fees during the initial term ending March 31, 2032 as follows:

$ 125 on July 1, 2026, $ 1,250 on April 1, 2027, $ 1,000 on June 30, 2028, $ 1,000 on June 30, 2029 and $ 875 on June 30, 2030.

The Company's exclusive right to commercialize IMPAVIDO® in the U.S.

will begin in September 2026.

As of June 30, 2026, the Company has classified $ 1,020 and $ 2,304 in accrued liabilities and other long-term liabilities, respectively, in the accompanying Condensed Balance Sheets associated with the associated future fixed fees described above, with $ 926 to be accreted to interest expense through June 30, 2030 using the effective interest rate method.

After the initial term, the Company will have the option to make up to ten additional annual renewals subject to certain conditions and an annual fee.

The Company would also pay up to an additional $ 4,000 by making $ 1,000 payments when cumulative net sales reach $ 50,000 , $ 100,000 , $ 150,000 and $ 200,000 , respectively.

The Company will also pay Knight Therapeutics 55 % of net sales up to $ 7,000 per calendar year and 50 % of net sales above $ 7,000 per calendar year.

Knight Therapeutics will be responsible for all product costs and regulatory expenses associated with IMPAVIDO®, and the Company will be responsible for sales and marketing expenses related to commercialization.

Indemnification

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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 March 31, 2026 and December 31, 2025 .

Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of June 30, 2026 and December 31, 2025 .

Note 13 — Subsequent Events

On April 9, 2026, the Company entered into a sixth amendment to its credit agreement with SWK.

Under the amended terms of the SWK credit agreement, the interest rate was reduced from SOFR plus 6.75 % to SOFR plus 6.55 % with the SOFR floor reduced to 2.75 % from the previous 5.0 %.

Further, the interest only period was extended to November 2026.

There were no fees paid to SWK associated with the credit amendment and the amended credit agreement maturity date remained in December 2027.

On July 31, 2026, the Company entered into a license agreement for a late-stage rare disease product candidate ASN- 001 (timolol topical gel) from Auson Pharmaceuticals (“Auson”) for the treatment of proliferating superficial infantile hemangiomas.

Under the terms of the agreement, the Company will pay an upfront license fee to Auson of $ 3,000 within thirty days of the agreement.

Additionally, the Company will run a bioavailability bridging study for ASN- 001 and the Company intends to submit the NDA upon completion of the study in the second half of 2027.

Upon the successful approval of ASN- 001 by the FDA, the Company would be responsible for the following milestone events:

$ 5,000 upon first commercial sale of product after FDA approval;

$ 1,000 , upon first calendar year in which aggregate annual net sales of product meet or exceed $ 20,000 in product sales;

$ 2,500 upon first calendar year in which aggregate annual net sales of product meet or exceed $ 40,000 in product sales;

and $ 5,000 upon first calendar year in which aggregate annual net sales of product meet or exceed $ 80,000 in product sales, $ 10,000 upon first calendar year in which aggregate annual net sales of product meet or exceed $ 150,000 in product sales;

and $ 10,000 upon first calendar year in which aggregate annual net sales of product meet or exceed $ 280,000 in product sales.

The Company will pay royalties to Auson as follows:

10 % royalty rate for net product sales of less than or equal to $200,000; 13 % royalty rate for net product sales greater than $ 200,000 but less than or equal to $400,000;

and 15 % royalty rate for net product sales greater $ 400,000 .

The royalty tiers are based on cumulative lifetime product sales.

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

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Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases.

We currently have ten commercial rare disease products:

INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone.

We currently have eleven commercial rare disease products:

We have four additional product candidates in late-stage development:

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Results of Operations (dollars in thousands)

During the three months ended March 31, 2026, we had $24,266 in total revenues that generated a gross profit of $14,735 compared to total revenues of $17,282 during the three-month period ended March 31, 2025 that generated a gross profit of $9,861 for the period.

The increase in product sales and royalties, net was primarily the result of increased sales of INCRELEX®, GALZIN®, ALKINDI SPRINKLE®, and Carglumic Acid, and the addition of KHINDIVI™ sales in the current period.

Licensing revenue during the three months ended March 31, 2026 was zero compared to $3,286 in licensing revenue during the three months ended March 31, 2025.

Licensing revenue during the three months ended March 31, 2025 was due to $1,786 from our out-licensing of INCRELEX® rights outside of the U.S.

During the three months ended June 30, 2026, we had $37,589 in total revenues that generated a gross profit of $25,413 compared to total revenues of $18,928 during the three-month period ended June 30, 2025 that generated a gross profit of $11,924 for the period.

The increase in product sales, net was primarily the result of increased sales of INCRELEX®, GALZIN®, Carglumic Acid and the addition of HEMANGEOL® product sales in the current period.

During the six months ended June 30, 2026, we had $61,855 in total revenues that generated a gross profit of $40,148 compared to total revenues of $36,210 during the six-month period ended June 30, 2025 that generated a gross profit of $21,785 for the period.

The increase in product sales, net was primarily the result of increased sales of INCRELEX®, GALZIN®, ALKINDI SPRINKLE®, Carglumic Acid and the addition of HEMANGEOL® product sales in the current period.

Licensing revenue during the six months ended June 30, 2026 was $0 compared to $3,286 in licensing revenue during the six months ended June 30, 2025.

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.

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 March 31, 2026, we incurred $1,875 of research and development (“R&D”) expenses as compared to $1,161 for the same period in 2025.

The increase was primarily due to higher clinical study expenses primarily associated with our KHINDIVI™ label expansion and increased expenses associated with our ET-700 project development activities.

During the three months ended June 30, 2026, we incurred $993 of research and development (“R&D”) expenses as compared to $3,712 for the same period in 2025.

During the six months ended June 30, 2026, we incurred $2,868 of research and development (“R&D”) expenses as compared to $4,873 for the same period in 2025.

In 2025, the Company paid a $2,155 NDA filing fee for DESMODA™, which was approved by the FDA in February of 2026.

General and Administrative Expenses

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

During the three-month periods ended March 31, 2026 and 2025, we incurred $10,446 and $9,170, respectively, of G&A expenses.

The increase in G&A expenses during the three months ended March 31, 2026 was primarily attributable to higher FDA fees as the Company no longer qualifies for the orphan fee exemption and higher employee-related costs due to increased headcount to support the business.

During the three-month periods ended June 30, 2026 and 2025, we incurred $11,626 and $9,687, respectively, of G&A expenses.

During the six-month periods ended June 30, 2026 and 2025, we incurred $22,072 and $18,857, respectively, of G&A expenses.

The increase in G&A expenses during the six months ended June 30, 2026 was primarily attributable to higher FDA fees as the Company no longer qualifies for the orphan fee exemption and higher employee-related costs due to increased headcount to support the business.

Liquidity and Capital Resources

As of March 31, 2026, we had total assets of $97.7 million, cash and cash equivalents of $19.7 million and working capital of $9.1 million.

The following table sets forth a summary of our cash flows for the three-month periods ended March 31, 2026 and 2025 (dollars in thousands):

Three months ended

March 31, 2026

March 31, 2025

As of June 30, 2026, we had total assets of $115.8 million, cash and cash equivalents of $26.8 million and working capital of $23.5 million.

The following table sets forth a summary of our cash flows for the six-month periods ended June 30, 2026 and 2025 (dollars in thousands):

Six months ended

June 30, 2026

June 30, 2025

Net cash from operating activities

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Change in cash and cash equivalents

During the three months ended March 31, 2026, net cash from operating activities was $7,405 compared to $2,090 during the three months ended March 31, 2025.

The increase in cash from operating activities during the three months ended March 31, 2026 was primarily due to higher cash collections from product sales and lower cash outlay for inventory purchases.

During the three months ended March 31, 2026, net cash used in investing activities was $15,075 and was primarily attributable to a $14,000 payment associated with the acquisition of the U.S.

During the six months ended June 30, 2026, net cash from operating activities was $14,660 compared to $10,049 during the six months ended June 30, 2025.

The increase in cash from operating activities during the six months ended June 30, 2026 was primarily due to higher cash collections from product sales and lower cash outlay for inventory purchases.

During the six months ended June 30, 2026, net cash used in investing activities was $15,070 and was primarily attributable to a $14,000 payment associated with the acquisition of the U.S.

commercial rights to HEMANGEOL® in February 2026 and the $1,000 upfront payment for the licensing of U.S.

marketing rights to an ultra-rare disease product candidate (also in February 2026).

During the three months ended March 31, 2026, net cash from financing activities was $1,389 compared to $394 during the three months ended March 31, 2025.

The increase in net cash from financing activities related to increased proceeds from stock option exercises.

marketing rights to an ultra-rare disease product candidate, which also occurred in February 2026.

During the six months ended June 30, 2026, net cash from financing activities was $1,313 compared to $394 during the six months ended June 30, 2025.

The increase in net cash from financing activities related to increased proceeds of $3,649 from stock option exercises, proceeds of $270 from the employee stock purchase program, partially offset by a $3,000 principal debt payment.

Non-GAAP Financial Measures

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For the three months ended

For the six months ended

GAAP Net income (loss)

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Represents depreciation expense related to our property and equipment.

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

During the three months ended March 31, 2026 and 2025, we recognized in cost of sales $350 and $1,142, respectively, for inventory step-up expense primarily attributable to INCRELEX® inventory revalued in connection with this product acquisition.

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

During the three and six months ended June 30, 2026, we recognized in cost of sales $650 and $1,000, respectively, compared to $1,207 and $2,349 during the three and six months ended June 30, 2025, respectively, for inventory step-up expense primarily attributable to the HEMANGEOL® inventory revalued in connection with the product acquisition in 2026 period, and the INCRELEX® inventory revalued in connection with this product acquisition in the 2025 periods.

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

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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 three months ended March 31, 2026 and 2025, all revenues recognized in the Condensed Statements of Operations were point in time sales to our customers.

For the three and six months ended June 30, 2026 and 2025, 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.

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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.

For our INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products, we bill at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment.

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

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

We store our INCRELEX®, HEMANGEOL®, ALKINDI SPRINKLE®, KHINDIVI™, DESMODA™, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone

products inventory at our pharmacy distributor customer locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders.

We bill for our products at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements and other government programs which are recorded as a reduction of net revenues at the date of sale/shipment.

Our product sales are not subject to returns.

We store our products inventory at our specialty pharmacy distributor locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders.

We account for business acquisitions using the acquisition method of accounting.

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For transactions accounted for as asset acquisition, we allocate the purchase price, including transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.

For transactions accounted for as an asset acquisition, we allocate the purchase price, including transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.

This allocation requires management to make significant estimates and assumptions, including the selection of valuation methodologies, discount rates, projected cash flows, and useful lives of acquired assets.

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The risk-free interest rate was determined from the implied yields for zero-coupon U.S.

government issues with a remaining term approximating the expected life of the options or warrants.

government issues with a remaining term approximating the expected life of the options.

Dividends on common stock are assumed to be zero for the BSM valuation of the stock options.

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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