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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-11 · 69 added, 71 removed, 186 unchanged (43% of the section changed)

17 unchanged sentences

consider other matters set forth in our SEC filings including the Risk Factors set forth in Part I, Item 1A of our 2021 10-K.

are a innovative pharmaceutical company focused on developing, acquiring, and commercializing innovative pharmaceutical products that fulfill

an unmet need in patients suffering from rare diseases.

The Company currently commercializes two rare disease products, ALKINDI SPRINKLE®

for the treatment of adrenocortical insufficiency and Carglumic Acid for the treatment of acute hyperammonemia due to N-acetylglutamate

synthase (NAGS) deficiency, and has two additional product candidates in late-stage development.

The Company is developing dehydrated alcohol injection, which has received Orphan Drug Designation for the treatment of methanol poisoning,

and the ZENEO® hydrocortisone autoinjector for the treatment of adrenal crisis.

are an innovative pharmaceutical company focused on developing, acquiring, and commercializing innovative pharmaceutical products that

fulfill an unmet need in patients suffering from rare diseases.

The Company currently has three commercial rare disease products, ALKINDI

SPRINKLE® for the treatment of adrenocortical insufficiency, Carglumic Acid for the treatment of acute hyperammonemia due to N-acetylglutamate

synthase (NAGS) deficiency, and Betaine Anhydrous for the treatment of homocystinuria, and has three additional product candidates in

late-stage development.

The Company is developing dehydrated alcohol injection, which has received Orphan Drug Designation for the treatment

of methanol poisoning, ZENEO® hydrocortisone autoinjector for the treatment of adrenal crisis, and ET-400.

addition, the Company is entitled to royalties or milestone payments from six FDA-approved products that the Company developed and out-licensed.

The products include Alaway® Preservative Free, EPRONTIA TM , Cysteine Hydrochloride, Zonisade®, Biorphen®, and

The products are Alaway® Preservative Free, EPRONTIA TM , Cysteine Hydrochloride, Zonisade®, Biorphen®, and Rezipres®.

of Operations

the three months ended June 30, 2022, we had $7,358 in revenue from licensing, product sales and royalties which reflected $5,000 of

revenue from the Dr.

Reddy’s agreement and generated a gross profit of $4,613.

We had total revenue of $3,067 for the three-month

period ended June 30, 2021 which reflected Azurity milestone revenues of $2,500 plus product sales and royalty revenues which generated

a total gross profit of $2,893 for the period.

the six months ended June 30, 2022, we had $9,534 in revenue from licensing, product sales and royalties which generated a gross profit

We had total revenue of $14,964 for the three-month period ended June 30, 2021 which reflected Azurity and Bausch milestone

revenues of $14,000 plus product sales and royalty revenues which generated a total gross profit of $13,163 for the period.

the three months ended September 30, 2022, we had $3,219 in total revenue that generated a gross profit of $2,018.

We had total revenue

of $775 for the three-month period ended September 30, 2021 that generated a gross profit of $121 for the period.

the nine months ended September 30, 2022, we had $12,753 in revenue from licensing, product sales and royalties which included $5,000

of revenue from the Dr.

Reddy’s agreement and generated total gross profit of $7,958.

We had total revenue of $15,739 for the nine-month

period ended September 30, 2021 which reflected Azurity and Bausch milestone revenues of $14,000 plus product sales and royalty revenues

which generated a total gross profit of $13,284 for the period.

and Development Expenses

For the three months ended June

30, 2022, we incurred $690 of research and development (“R&D”) expenses as compared to the $1,990 for the same period

The decrease was primarily due to a $500 fee to Crossject upon execution of the agreement for Zeneo hydrocortisone autoinjector

development in 2021 and decreased development costs for our other new product candidates.

For the six months ended June

30, 2022, we incurred $2,308 of R&D expenses as compared to the $2,876 for the same period in 2021 due to decreased development activities

General and Administrative Expenses

General and administrative (“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.

For the three-month periods ended

June 30, 2022 and 2021, we incurred $5,263 and $3,228, respectively, of G&A expenses.

The $2,035 increase in G&A expense was mainly

due to incremental marketing, legal, compensation, and product related expenses to support our product sales growth.

the six-month periods ended June 30, 2022 and 2021, we incurred $10,059 and $7,249, respectively, of G&A expenses.

The $2,810 increase

in G&A expense was mainly due to incremental legal, compensation, and product related expenses to support our product sales growth.

the three months ended September 30, 2022, we incurred $744 of research and development (“R&D”) expenses as compared

to the $2,678 for the same period in 2021.

The decrease was primarily due to a $1,100 fee to Sintetica in 2021 related to the

Biorphen vial and Rezipres vial projects, and decreased development costs for our other new product candidates.

the nine months ended September 30, 2022, we incurred $3,052 of R&D expenses as compared to the $5,554 for the same period in 2021.

The decrease was primarily due to a $500 fee to Crossject upon execution of the agreement for ZENEO hydrocortisone autoinjector development

in 2021, a $1,100 fee to Sintetica related to the Biorphen vial and Rezipres vial projects, and decreased development costs for our other

new product candidates.

and Administrative Expenses

and administrative (“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.

the three-month periods ended September 30, 2022 and 2021, we incurred $4,169 and $3,290, respectively, of G&A expenses.

in G&A expenses was mainly due to incremental marketing and compensation to support our product sales growth, partially offset by

decreased legal and consulting expenses.

the nine-month periods ended September 30, 2022 and 2021, we incurred $14,228 and $10,539, respectively, of G&A expenses.

in G&A expenses was mainly due to incremental marketing, legal, and compensation to support our product sales growth.

and Capital Resources

of June 30, 2022, we had total assets of $23.0 million, cash and cash equivalents of $17.0 million and working capital of $16.0 million.

We had previously capitalized our operations from the June 2017 private placement of approximately $20.1 million of Series A preferred

stock which converted into shares of our common stock concurrent with our IPO in November 2018 and also the IPO which provided us with

net proceeds of $22.0 million.

In addition, we entered into a Credit Agreement with SWK Holdings in November 2019 whereby we drew a $5.0

million loan amount at closing and an additional $2.0 million in August 2020.

In March and April 2020, we received net proceeds of approximately

$7.8 million from the sale of shares of our common stock, and in October 2020, we received net proceeds of approximately $21.0 million

from a public offering of our common stock at an offering price of $7.00 per share.

We believe that our existing funding, revenues from

our approved products and additional milestone payments expected to be paid in 2022 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.

following table sets forth a summary of our cash flows for the six-month periods ended June 30, 2022 and 2021:

Six months ended

June 30, 2022

Six months ended

June 30, 2021

Net cash provided by operating activities

of September 30, 2022, we had total assets of $21.5 million, including cash and cash equivalents of $13.4 million and we had working

capital of $11.8 million.

We had previously capitalized our operations from the June 2017 private placement of approximately $20.1 million

of Series A preferred stock which converted into shares of our common stock concurrent with our IPO in November 2018 and also the IPO

which provided us with net proceeds of $22.0 million.

In addition, we entered into a Credit Agreement with SWK Holdings in November 2019

whereby we drew a $5.0 million loan amount at closing and an additional $2.0 million in August 2020.

In March and April 2020, we received

net proceeds of approximately $7.8 million from the sale of shares of our common stock, and in October 2020, we received net proceeds

of approximately $21.0 million from a public offering of our common stock at an offering price of $7.00 per share.

We believe that our

existing funding, revenues from our approved products and additional milestone payments expected to be received in 2022 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.

following table sets forth a summary of our cash flows for the nine-month periods ended September 30, 2022 and 2021:

Net cash provided by operating

Cash (used in) provided by investing activities

Cash flows (used in) provided by financing activities

Change in cash and cash equivalents

decrease in cash provided by investing activities was mainly a result of a $700 sale of lab equipment in 2021 that combined with a

$750 Rezipres milestone payment to Sintetica in 2022.

The 2022 financing activity included an initial $385 payment on our loan

principal (see Note 5) whereas the 2021 financing activity was higher as a result of stock option exercises.

Cash flows (used in)

provided by financing activities

in cash and cash equivalents

decrease in cash provided by (used in) investing activities was primarily the result of a $700 sale of lab equipment in 2021, a $750

Rezipres milestone payment to Sintetica in 2022, and a $2,000 payment related to the acquisition of Betaine Anhydrous in

The 2022 financing activities included an initial payment on our loan principal (see Note 5) whereas the 2021 financing

activity was primarily the result of stock option exercises.

Accounting Policies

condensed financial statements are prepared in accordance with accounting principles generally accepted in the United States

The preparation of our condensed financial statements and related disclosures requires us to make estimates and

judgments that affect the reported amounts of assets, liabilities, costs and expenses in our condensed financial statements.

our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent

from other sources.

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

The preparation of our condensed financial statements and related disclosures requires us to make estimates and judgments that affect

the reported amounts of assets, liabilities, costs and expenses in our condensed financial statements.

We base our estimates on historical

experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other

We evaluate our estimates and assumptions on an ongoing basis.

Our actual results may differ from these estimates

under different assumptions or conditions.

Our actual results may differ from these estimates under different

assumptions or conditions.

our significant accounting policies are described in more detail in Note 3 to our financial statements included herein, we believe that

85 unchanged sentences

payment discounts, state Medicaid and GPO fees are included in sales reserves, accrued liabilities and net accounts receivable.

monitor actual product returns, chargebacks, discounts and fees subsequent to the sale.

actual product returns, chargebacks, discounts and fees subsequent to the sale.

If these amounts end up differing from our estimates,

73 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 2. Management’s Discussion and Analysis