What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-05 · 357 added, 333 removed, 535 unchanged (56% of the section changed)

FINANCIAL STATEMENTS

AND SUBSIDIARIES

Consolidated Balance Sheets

and cash equivalents

investment securities

interest income

and other current assets

current assets

Cash and cash equivalents

Restricted cash

Marketable investment securities

Accrued interest income

Prepaid and other current assets

Total current assets

Liabilities and Stockholders’ Equity

and Stockholders’ Equity

- current portion

settlement liability - current portion

current liabilities

Accounts payable

Accrued expenses

Debt - current portion

Litigation settlement liability - current portion

Total current liabilities

Debt - non-current portion

Warrant liability

Litigation settlement liability - non-current portion

Total liabilities

Commitments and contingencies (notes 5, 7, 8 and 10)

Stockholders’ equity:

Preferred stock, par value $ 0.0001 per share, 10,000,000 shares authorized;

- non-current portion

settlement liability - non-current portion

and contingencies (notes 5, 7, 8 and 10)

Stockholders’

stock, par value $ 0.0001 per share, 10,000,000 shares authorized;

zero issued and outstanding

Common stock, par value $ 0.0001 per share, 100,000,000 shares authorized;

88,296,360 and 70,041,967 issued and 88,290,650 and 70,036,257 outstanding

Additional paid-in capital

Treasury stock at cost, 5,710 shares

Accumulated other comprehensive loss

Accumulated deficit

stock, par value $ 0.0001 per share, 100,000,000 shares authorized;

88,296,360 and 70,041,967 issued and 88,290,650 and 70,036,257

paid-in capital

stock at cost, 5,710 shares

other comprehensive loss

( 185,290,428 )

( 172,032,008 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Operating loss

and administrative

operating expenses

( 3,533,673 )

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Other income (expense):

Interest and investment income

Interest and investment

Interest expense

Unrealized gain (loss) on warrant liability

( 2,066,445 )

( 3,166,474 )

Litigation settlement

( 4,000,000 )

Total other expense, net

Unrealized gain (loss)

on warrant liability

( 3,025,997 )

( 4,000,000 )

other income (expense), net

( 3,619,776 )

( 3,258,753 )

Loss before income tax expense

Loss before income tax

( 3,081,297 )

2 unchanged sentences

( 16,453,343 )

Income tax expense

$ ( 3,081,297 )

2 unchanged sentences

$ ( 16,453,543 )

Basic loss per share attributable to common stock

Weighted average common shares outstanding, basic

Diluted loss per share attributable to common stock

Weighted average common shares outstanding, diluted

loss per share attributable to common stock

average common shares outstanding, basic

loss per share attributable to common stock

average common shares outstanding, diluted

Comprehensive loss:

3 unchanged sentences

$ ( 16,453,543 )

Net unrealized gain (loss) on available-for-sale securities

Comprehensive loss

unrealized gain (loss) on available-for-sale securities

Comprehensive

$ ( 3,084,531 )

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Consolidated Statements of Changes in Stockholders’ Equity

the Three and Six Months Ended June 30, 2021 and 2020

Comprehensive

Stockholders’

the Three and Nine Months Ended September 30, 2021 and 2020

Comprehensive

Stockholders’

at March 31, 2020

Balances at June 30, 2020

$ 176,327,120

2 unchanged sentences

( 4,313,258 )

net gain on marketable investment securities

of restricted stock units

stock issued for warrant exercises

of warrant liability on warrant exercises

Common stock sold through equity offering

Unrealized net gain on marketable

investment securities

Stock-based compensation

Option exercises

Common stock sold through ATM offering

associated with ATM offering

at June 30, 2020

Option exercises , shares

Costs associated with ATM offering

Vesting of restricted stock

units , shares

Common stock sold through equity

offering , shares

Common stock issued for warrant

Settlement of warrant liability

on warrant exercises

stock sold through ATM offering

Balances at September

$ 182,062,701

2 unchanged sentences

Stockholders’

at December 31, 2019

Balances at December 31, 2019

$ 157,391,969

2 unchanged sentences

( 16,453,543 )

net gain on marketable investment securities

of restricted stock units

stock sold through equity offering

stock issued for warrant exercises

of warrant liability on warrant exercises

associated with ATM offering

at June 30, 2020

Unrealized net gain on marketable

investment securities

Stock-based compensation

Vesting of restricted stock

Common stock sold through equity

Common stock issued for warrant

Settlement of warrant liability

on warrant exercises

stock sold through ATM offering

Balances at September

$ 182,062,701

2 unchanged sentences

Stockholders’

at March 31, 2021

Balances at June 30, 2021

$ 217,986,752

2 unchanged sentences

( 3,081,297 )

net gain on marketable investment securities

associated with ATM offering

at June 30, 2021

Unrealized net loss on marketable

investment securities

Stock-based compensation

Costs associated with ATM offering

Balances at September

$ 218,136,818

2 unchanged sentences

Stockholders’

at December 31, 2020

$ 187,407,634

$ ( 172,032,008 )

Balances at December 31, 2020

$ 187,407,634

2 unchanged sentences

( 13,258,420 )

net loss on marketable investment securities

stock sold through equity offering

stock issued for warrant exercises

of warrant liability on warrant exercises

Unrealized net loss on marketable

investment securities

Stock-based compensation

Option exercises

Common stock sold through equity

Common stock issued for warrant

Settlement of warrant liability

on warrant exercises

stock sold through ATM offering

at June 30, 2021

$ 217,986,752

$ ( 182,209,131 )

Balances at September

$ 218,136,818

3 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Cash flows from operating activities:

Months Ended September 30,

flows from operating activities:

$ ( 13,258,420 )

$ ( 16,453,543 )

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation expense

Stock-based compensation expense

Non-cash interest expense

Non-cash loss (gain) on change in fair value of warrant liability

Amortization of premium (discount) on marketable investment securities

Changes in operating assets and liabilities:

Accrued interest income

Prepaid and other current assets

Accounts payable

Accrued expenses

Litigation settlement liability

Cash used in operating activities

to reconcile net loss to cash used in operating activities:

compensation expense

interest expense

loss (gain) on change in fair value of warrant liability

of premium (discount) on marketable investment securities

in operating assets and liabilities:

interest income

and other current assets

settlement liability

used in operating activities

( 13,405,843 )

( 11,619,069 )

Cash flows from investing activities:

Purchases of marketable investment securities

flows from investing activities:

of marketable investment securities

( 37,307,767 )

( 6,315,297 )

Maturities of marketable investment securities

Cash used in investing activities

of marketable investment securities

used in investing activities

( 34,057,767 )

Cash flows from financing activities:

Debt repayments

( 1,515,297 )

flows from financing activities:

( 2,500,000 )

Proceeds from debt

Net proceeds from common stock offering

Net proceeds from (costs associated with) ATM

Proceeds from stock option exercises

Net proceeds from exercise of warrants

Cash provided by financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

( 1,111,111 )

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash at end of period

Supplemental disclosure of cash flow information:

Interest paid

Income taxes paid

Supplemental disclosure of non-cash investing and financing activity:

Settlement of warrant liability on warrant exercises

Net unrealized loss on available-for-sale securities

Accrued final payment charge on debt

Other accrued interest

proceeds from common stock offering

proceeds from ATM

from stock option exercises

proceeds from exercise of warrants

provided by financing activities

increase (decrease) in cash, cash equivalents, and restricted cash

( 19,700,277 )

cash equivalents, and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

disclosure of cash flow information:

disclosure of non-cash investing and financing activity:

of warrant liability on warrant exercises

unrealized gain (loss) on available-for-sale securities

final payment charge on debt

accrued interest

accompanying notes to unaudited condensed consolidated financial statements

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and regulations of the SEC.

Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the

results that may be expected for any future period or for the year ending December 31, 2021.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of

the results that may be expected for any future period or for the year ending December 31, 2021.

unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial

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Company believes that its existing capital resources, together with interest thereon, will be sufficient to meet its projected operating

requirements through at least June 30, 2022 which includes an on-going clinical study for LPCN 1144, future clinical studies for LPCN

1148 and LPCN 1154, compliance with regulatory requirements and on-going litigation and settlement activities.

The Company has based

this estimate on assumptions that may prove to be wrong, and the Company could utilize its available capital resources sooner than it

currently expects if additional activities are performed by the Company including pre-commercial and commercial activities for TLANDO

and new clinical studies for LPCN 1144, TLANDO XR, LPCN 1148 and LPCN 1154.

While the Company believes it has sufficient liquidity and

capital resources to fund our projected operating requirements through at least June 30, 2022, the Company will need to raise additional

capital at some point through the equity or debt markets or through out-licensing activities, before or after June 30, 2022, to support

its operations.

If the Company is unsuccessful in raising additional capital, its ability to continue as a going concern will become

Further, the Company’s operating plan may change, and the Company may need additional funds to meet operational needs and

capital requirements for product development, regulatory compliance and clinical trial activities sooner than planned.

In addition, the

Company’s capital resources may be consumed more rapidly if it pursues additional clinical studies for LPCN 1144, TLANDO XR, LPCN

1148 and LPCN 1154.

Conversely, the Company’s capital resources could last longer if it reduces expenses, reduces the number of

activities currently contemplated under our operating plan or if it terminates, modifies the design or suspends on-going clinical studies..

Earnings (Loss) per Share

requirements through at least September 30, 2022 which includes planned and on-going clinical studies for LPCN 1144 and LPCN 1148, future

clinical studies for LPCN 1107 and LPCN 1154 and compliance with regulatory requirements.

The Company has based this estimate on assumptions

that may prove to be wrong, and the Company could utilize its available capital resources sooner than it currently expects if additional

activities are performed by the Company including new clinical studies for LPCN 1144, TLANDO XR, LPCN 1148, LPCN 1154 and LPCN 1107.

While the Company believes it has sufficient liquidity and capital resources to fund our projected operating requirements through at

least September 30, 2022, the Company will need to raise additional capital at some point through the equity or debt markets or through

out-licensing activities, before or after September 30, 2022, to support its operations.

If the Company is unsuccessful in raising additional

capital, its ability to continue as a going concern will become a risk.

Further, the Company’s operating plan may change, and the

Company may need additional funds to meet operational needs and capital requirements for product development, regulatory compliance and

clinical trial activities sooner than planned.

In addition, the Company’s capital resources may be consumed more rapidly if it

pursues additional clinical studies for LPCN 1144, TLANDO XR, LPCN 1148, LPCN 1154 and LPCN 1107.

Conversely, the Company’s capital

resources could last longer if it reduces expenses, reduces the number of activities currently contemplated under our operating plan

or if it terminates, modifies the design or suspends on-going clinical studies or if the Company receives more revenue under the license

agreement (the “Antares License Agreement”) with Antares Pharma, Inc.

(“Antares”) than planned.

(Loss) per Share

earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted average number

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warrants and, unvested restricted stock units to the extent such shares are dilutive.

following table sets forth the computation of basic and diluted earnings (loss) per share of common stock for the three and six months

ended June 30, 2021 and 2020:

following table sets forth the computation of basic and diluted earnings (loss) per share of common stock for the three and nine months

ended September 30, 2021 and 2020:

Schedule of Computation of Basic and Diluted Earnings (loss) Per Share of Common Stock

Three Months Ended June 30,

Six Months Ended June 30,

Basic loss per share attributable to common stock:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Basic loss per share attributable

to common stock:

$ ( 3,081,297 )

3 unchanged sentences

Weighted avg.

common shares outstanding

Basic loss per share attributable to common stock

Diluted loss per share attributable to common stock:

shares outstanding

Basic loss per share

attributable to common stock

Diluted loss per share attributable

to common stock:

$ ( 3,081,297 )

3 unchanged sentences

Weighted avg.

common shares outstanding

Diluted loss per share attributable to common stock

computation of diluted loss per share for the six months ended June 30, 2021 and 2020 does not include the following stock options and

warrants to purchase shares or unvested restricted stock units in the computation of diluted loss per share because these instruments

shares outstanding

Diluted loss per share

attributable to common stock

computation of diluted loss per share for the nine months ended September 30, 2021 and 2020 does not include the following stock options

and warrants to purchase shares or unvested restricted stock units in the computation of diluted loss per share because these instruments

were antidilutive:

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The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale

securities by major security type and class of security at June 30, 2021 and December 31, 2020 were as follows:

securities by major security type and class of security at September 30, 2021 and December 31, 2020 were as follows:

Schedule of Available-for-Sale Securities

June 30, 2021

unrealized holding

Corporate bonds, notes and commercial paper

December 31, 2020

unrealized holding gains

unrealized holding losses

Corporate bonds, notes and commercial

unrealized holding gains

unrealized holding losses

Commercial paper

of debt securities classified as available-for-sale securities at June 30, 2021 are as follows:

of debt securities classified as available-for-sale securities at September 30, 2021 are as follows:

Schedule of Maturities of Debt Securities Classified as Available-for-sale Securities

June 30, 2021

Due within one year

were no sales of marketable investment securities during the three and six months ended June 30, 2021 and 2020 and therefore no realized

gains or losses.

Additionally, during the three months ended June 30, 2021 and 2020, no marketable investment securities matured, and

$ 450,000 and $ 4.3 million of marketable investment securities matured during the six months ended June 30, 2021 and 2020, respectively.

The Company determined there were no other-than-temporary impairments for the three and six months ended June 30, 2021 and 2020.

were no sales of marketable investment securities during the three and nine months ended September 30, 2021 and 2020 and therefore no

realized gains or losses.

Additionally, $ 2.8 million and $ 450,000 marketable investment securities matured during the three months ended

September 30, 2021 and 2020, respectively and $ 3.3 million and $ 4.8 million of marketable investment securities matured during the nine

months ended September 30, 2021 and 2020, respectively.

The Company determined there were no other-than-temporary impairments for the

three and nine months ended September 30, 2021 and 2020.

Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent

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The following table presents the placement in the fair value hierarchy of assets

and liabilities that are measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020:

and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020:

Schedule of Fair Value, Assets Measured on Recurring Basis

Fair value measurements at reporting date using

June 30, 2021

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

value measurements at reporting date using

September 30,

Cash equivalents

- money market funds

Commercial Paper

Corporate bonds and notes

Warrant liability

Fair value measurements at reporting date using

December 31, 2020

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

value measurements at reporting date using

Cash equivalents

- money market funds

Commercial paper

Warrant liability

following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value

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The significant

assumptions used in preparing the option pricing model for valuing the warrant liability as of June 30, 2021, include (i) volatility

assumptions used in preparing the option pricing model for valuing the warrant liability as of September 30, 2021, include (i) volatility

of 59.69 %, (ii) risk free interest rate of 0.53 %, (iii) strike price of $ 0.50 , (iv) fair value of common stock of $ 1.09 , and (v) expected

5 unchanged sentences

in circumstances that caused the transfer.

There were no transfers into or out of Level 1, Level 2, or Level 3 for the three and six

months ended June 30, 2021.

Loan and Security Agreements and Other Liabilities

There were no transfers into or out of Level 1, Level 2, or Level 3 for the three and nine

months ended September 30, 2021.

and Security Agreements and Other Liabilities

Valley Bank Loan

3 unchanged sentences

and Security Agreement bears interest at a rate equal to the Prime Rate, as reported in the money rates section of The Wall Street Journal

or any successor publication representing the rate of interest per annum then in effect, plus one percent per annum ( 4.25 % as of June

or any successor publication representing the rate of interest per annum then in effect, plus one percent per annum ( 4.25 % as of September

30, 2021), which interest is payable monthly.

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assets now owned or hereafter acquired, excluding intellectual property and certain other assets.

In addition, as TLANDO was not approved

by the United States Food and Drug Administration (“FDA”) prior to May 31, 2018, the Company maintained $ 5.0 million of cash

collateral at SVB as required under the Loan and Security Agreement until such time as TLANDO is approved by the FDA.

However on February

16, 2021, the Company amended the Loan and Security Agreement with SVB to, among other things, remove the financial trigger and financial

trigger release event provisions requiring the Company to maintain a minimum cash collateral value and collateral pledge thereof.

On September 9, 2021, SVB consented

to the Antares Licensing Agreement which among other things provides Antares a license to certain intellectual property as well as assigns

Antares the TLANDO® trademark.

In addition, as TLANDO was not approved by the United States Food and Drug Administration (“FDA”)

prior to May 31, 2018, the Company maintained $ 5.0 million of cash collateral at SVB as required under the Loan and Security Agreement

until such time as TLANDO is approved by the FDA.

However on February 16, 2021, the Company amended the Loan and Security Agreement with

SVB to, among other things, remove the financial trigger and financial trigger release event provisions requiring the Company to maintain

a minimum cash collateral value and collateral pledge thereof.

any amounts are outstanding under the Loan and Security Agreement, the Company is subject to a number of affirmative and negative covenants,

9 unchanged sentences

than $ 100,000 individually or in the aggregate.

maturities of principal payments on the Loan and Security Agreement at June 30, 2021 (excluding accrued final payment fee) are as follows:

maturities of principal payments on the Loan and Security Agreement at September 30, 2021 (excluding accrued final payment fee) are as

Schedule of Maturities of Debt

Years Ending December 31,

(in thousands)

Ending December 31,

June 15, 2020 and through December 31, 2020, the Company deferred Federal Insurance Contributions Act (“FICA”) taxes under

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Payment of these tax deferrals are delayed to December 31, 2021 and December 31, 2022.

As of June 30, 2021

As of September 30,

2021 the tax deferrals totaled $ 36,000 and are included in accrued liabilities.

3 unchanged sentences

annual effective tax rate, and if the estimated tax rate changes, the Company makes a cumulative adjustment.

June 30, 2021 and December 31, 2020, the Company had a full valuation allowance against its deferred tax assets, net of expected reversals

of existing deferred tax liabilities, as it believes it is more likely than not that these benefits will not be realized.

Contractual Agreements

Abbott Products, Inc.

September 30, 2021 and December 31, 2020, the Company had a full valuation allowance against its deferred tax assets, net of expected

reversals of existing deferred tax liabilities, as it believes it is more likely than not that these benefits will not be realized.

(7) Contractual

Products, Inc.

March 29, 2012, the Company terminated its collaborative agreement with Solvay Pharmaceuticals, Inc.

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If generic versions of any such product are introduced, then royalties are reduced by 50 %.

The Company did not incur any royalties expense during the three and six months ended June 30, 2021 and 2020.

Contract Research and Development

The Company did not incur any royalties expense during the three and nine months ended September 30, 2021 and 2020.

Research and Development

Company has entered into agreements with various contract organizations that conduct preclinical, clinical, analytical and manufacturing

1 unchanged sentence

as advisors to the Company.

The Company incurred expenses of $ 786,000 and $ 1.2 million, respectively, for the three months ended June

30, 2021 and 2020 and $ 1.7 million and $ 2.9 million, respectively, for the six months ended June 30, 2021 and 2020 under these agreements

and has recorded these expenses in research and development expenses.

The Company incurred expenses of $ 1.8 million in each of the three months ended September 30, 2021 and 2020

and $ 3.4 million and $ 5.1 million, respectively, for the nine months ended September 30, 2021 and 2020 under these agreements and has

recorded these expenses in research and development expenses.

August 6, 2004, the Company assumed a non-cancelable operating lease for office space and laboratory facilities in Salt Lake City, Utah.

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the Company extended the lease through February 28, 2021 and on March 3, 2021, the Company extended the lease through February 28, 2022.

minimum lease payments under non-cancelable operating leases as of June 30, 2021 are:

minimum lease payments under non-cancelable operating leases as of September 30, 2021 are:

Schedule of Future Minimum Rental Payments for Operating Leases

Year ending December 31:

Total minimum lease payments

Company’s rent expense was $ 83,000 for each of the three months ended June 30, 2021 and 2020 and was $ 165,000 for each of the six

months ended June 30, 2021 and 2020.

Stockholders’ Equity

Issuance of Common Stock

ending December 31:

minimum lease payments

Company’s rent expense was $ 83,000 for each of the three months ended September 30, 2021 and 2020 and was $ 248,000 for each of

the nine months ended September 30, 2021 and 2020.

(9) Stockholders’

of Common Stock

January 28, 2021, the Company completed a public offering of securities registered under an effective registration statement filed pursuant

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giving effect to such exercise.

November 18, 2019, the Company completed a public offering of securities registered under an effective registration statement filed pursuant

to the Securities Act of 1933, as amended (“November 2019 Offering”).

The gross proceeds from the November 2019 Offering

were approximately $ 6.0

million, before deducting placement agent fees

and other offering expenses of $ 404,000 .

In the November 2019 Offering, the Company sold (i) 10,450,000

Class A Units, with each Class A Unit consisting

of one share of its common stock and a common warrant to purchase one share of its common stock, and (ii) 1,550,000

Class B Units, with each Class B Unit consisting

of one pre-funded warrant to purchase one share of its common stock and a common warrant to purchase one share of its common stock, at

a price of $ 0.50

per Class A Unit and $ 0.4999

per Class B Unit.

The pre-funded warrants, which

were exercised for common stock in December 2019, were issued in lieu of common stock in order to ensure the purchaser did not exceed

certain beneficial ownership limitations.

The pre-funded warrants were immediately exercisable at an exercise price of $ .0001

per share, subject to adjustment.

Additionally,

the common stock warrants were immediately exercisable at an exercise price of $ 0.50

per share, subject to adjustment, and expire

on November 17, 2024.

By their terms, however, neither the pre-funded warrants nor the common stock warrants can be exercised at any

time that the pre-funded warrant holder or the common stock warrant holder would beneficially own, after such exercise, more than 4.99%

(or, at the election of the holder, 9.99%) of the shares of common stock then outstanding after giving effect to such exercise.

date of the November 2019 Offering, the Company allocated approximately $ 768,000

million to common stock/additional paid-in capital

and warrant liability, respectively.

November 18, 2019, the Company completed a public offering of securities registered under an effective registration statement filed

pursuant to the Securities Act of 1933, as amended (“November 2019 Offering”).

The gross proceeds from the November 2019

Offering were approximately $ 6.0 million,

before deducting placement agent fees and other offering expenses of $ 404,000 .

In the November 2019 Offering, the Company sold (i) 10,450,000 Class

A Units, with each Class A Unit consisting of one share of its common stock and a common warrant to purchase one share of its common

stock, and (ii) 1,550,000 Class

B Units, with each Class B Unit consisting of one pre-funded warrant to purchase one share of its common stock and a common warrant

to purchase one share of its common stock, at a price of $ 0.50 per

Class A Unit and $ 0.4999 per

Class B Unit.

The pre-funded warrants, which were exercised for common stock in December 2019, were issued in lieu of common stock

in order to ensure the purchaser did not exceed certain beneficial ownership limitations.

The pre-funded warrants were immediately

exercisable at an exercise price of $ .0001 per

share, subject to adjustment.

Additionally, the common stock warrants were immediately exercisable at an exercise price of $ 0.50 per

share, subject to adjustment, and expire on November 17, 2024.

By their terms, however, neither the pre-funded warrants nor the

common stock warrants can be exercised at any time that the pre-funded warrant holder or the common stock warrant holder would

beneficially own, after such exercise, more than 4.99% (or, at the election of the holder, 9.99%) of the shares of common stock then

outstanding after giving effect to such exercise.

On the date of the November 2019 Offering, the Company allocated

approximately $ 768,000 and

$ 4.8 million

to common stock/additional paid-in capital and warrant liability, respectively.

March 6, 2017, the Company entered into the Sales Agreement with Cantor Fitzgerald & Co.

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the Sales Agreement at any time upon ten days’ prior notice.

of June 30, 2021, we had sold an aggregate of 15,023,073 shares at a weighted-average sales price of $ 2.19 per share under the Sales

of September 30, 2021, we had sold an aggregate of 15,023,073 shares at a weighted-average sales price of $ 2.19 per share under the Sales

Agreement for aggregate gross proceeds of $ 32.9 million and net proceeds of $ 31.7 million, after deducting sales agent commission and

discounts and our other offering costs.

During the three months ended June 30, 2021, the Company did not sell any shares of our common

stock pursuant to the current Registration Statement on Form S-3 (File No.

During the six months ended June 30, 2021, the

Company sold 1,811,238 shares of our common stock pursuant to the current Registration Statement on Form S-3 (File No.

333-250072) at

a weighted-average sales price of $ 1.95 per share, resulting in net proceeds of approximately $3.4 million under the Sales Agreement

which is net of $ 112,000 in expenses.

During the three and six months ended June 30, 2020, the Company did not sell any shares of our

common stock pursuant to the prior Registration Statement on Form S-3 (File No.

As of June 30, 2021, the Company had $ 41.2

million available for sale under the Sales Agreement.

Rights Agreement

During the three months ended September 30, 2021, the Company did not sell any shares of our

common stock pursuant to the current Registration Statement on Form S-3 (File No.

During the nine months ended September

30, 2021, the Company sold 1,811,238 shares of our common stock pursuant to the current Registration Statement on Form S-3 (File No.

333-250072) at a weighted-average sales price of $ 1.95 per share, resulting in net proceeds of approximately $ 3.4 million under the Sales

Agreement which is net of $ 112,000 in expenses.

During the three and nine months ended September 30, 2020, the Company sold 2,830,000

shares at a weighted average sales price of $ 1.43 per share under the ATM for aggregate gross proceeds of $ 4.0 million and net proceeds

of $ 3.9 million pursuant to the prior Registration Statement on Form S-3 (File No.

As of September 30, 2021, the Company

had $ 41.2 million available for sale under the Sales Agreement.

November 13, 2015, the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent, entered into a Rights Agreement.

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however, on November 5, 2018 our Board of Directors

approved an Amended and Restated Rights Agreement pursuant to which the expiration date was extended to November 5, 2021, unless the

rights are earlier redeemed or exchanged by the Company.

Share-Based Payments

approved an Amended and Restated Rights Agreement pursuant to which the expiration date was extended to November 5, 2021 and again on

November 1, 2021, the Company adopted a Second Amended and Restated Rights Agreement pursuant to which the expiration date was extended

to November 1, 2024, unless the rights are earlier redeemed or exchanged by the Company.

Company recognizes stock-based compensation expense for grants of stock option awards, restricted stock units and restricted stock under

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Stock-based compensation cost that has been expensed in the statements of

operations amounted to approximately $ 147 ,000 and $ 465 ,000, respectively, for the three months ended June 30, 2021 and 2020, and amounted

to $ 294 ,000 and $ 787 ,000, respectively, for the six months ended June 30, 2021 and 2020, and is allocated as follows:

operations amounted to approximately $ 155 ,000 and $ 352 ,000, respectively, for the three months ended September 30, 2021 and 2020, and

amounted to $ 449 ,000 and $ 1.1 million, respectively, for the nine months ended September 30, 2021 and 2020, and is allocated as follows:

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

General and administrative

Share-based Compensation Expense

Company issued 66,000 stock options and 376,000 stock options, respectively, during the three and six months ended June 30, 2021 and

issued 113,000 and 739,000 stock options during the three and six months ended June 30, 2020.

Company did not issue any stock options during each of the three months ended September 30, 2021 and 2020 and issued 376,000 and 739,000

stock options, respectively, during the nine months ended September 30, 2021 and 2020.

assumptions used in the determination of the fair value of stock options granted are as follows:

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The volatility factor is based solely on the Company’s trading history.

options granted during the six months ended June 30, 2021 and 2020, the Company calculated the fair value of each option grant on the

respective dates of grant using the following weighted average assumptions:

options granted during the nine months ended September 30, 2021 and 2020, the Company calculated the fair value of each option grant

on the respective dates of grant using the following weighted average assumptions:

Schedule of Key Assumption of Fair Value of Stock Options Granted

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in future periods.

of June 30, 2021, there was $ 1.1 million of total unrecognized compensation cost related to unvested share-based compensation arrangements

of September 30, 2021, there was $ 941,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements

granted under the Company’s stock option plan.

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and will be adjusted for subsequent changes in estimated forfeitures.

Stock Option Plan

April 2014, the board of directors adopted the 2014 Stock and Incentive Plan (“2014 Plan”) subject to shareholder approval

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An aggregate of 5,721,906 shares are authorized for issuance under the 2014 Plan, with 1,586,959 shares remaining available

for grant as of June 30, 2021.

for grant as of September 30, 2021.

summary of stock option activity is as follows:

Schedule of Stock Option Activity

Outstanding stock options

Number of shares

Weighted average exercise price

stock options

average exercise price

Balance at December 31, 2020

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Options forfeited

Options cancelled

Balance at June 30, 2021

Options exercisable at June 30, 2021

following table summarizes information about stock options outstanding and exercisable at June 30, 2021:

Balance at September 30, 2021

Options exercisable at September 30, 2021

following table summarizes information about stock options outstanding and exercisable at September 30, 2021:

Schedule of Share-based Compensation of Stock Options Outstanding and Exercisable

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There were zero

respectively, stock options exercised during the three and six months ended June 30, 2021, and no

stock options exercised during the three and

six months ended June 30, 2020.

Common Stock Warrants

Company accounts for its common stock warrants under ASC 480, Distinguishing Liabilities from Equity , which requires any

financial instrument, other than an outstanding share, that, at inception, embodies an obligation to repurchase the issuer’s

equity shares, or is indexed to such an obligation, and requires or may require the issuer to settle the obligation by transferring

assets, to be classified as a liability.

In accordance with ASC 480, the Company’s outstanding warrants from the November 2019

Offering are classified as a liability.

The liability is adjusted to fair value at each reporting period, with the changes in fair

value recognized as gain (loss) on change in fair value of warrant liability in the Company’s consolidated statements of

The warrants issued in the November 2019 Offering allow the warrant holder, if certain change in control events occur,

the option to receive an amount of cash equal to the value of the warrants as determined in accordance with the Black-Scholes option

pricing model with certain defined assumptions upon a fundamental transaction.

of June 30, 2021, the Company had 1,094,030 common stock warrants outstanding from the November 2019 Offering to purchase an equal number

of shares of common stock.

The fair value of these warrants on June 30, 2021 and on December 31, 2020 was determined using the Black-Scholes

option pricing model with the following Level 3 inputs (as defined in the November 2019 Offering):

and 4,584 , respectively, stock options exercised during the three and nine months ended September 30, 2021, and no stock options exercised

during the three and nine months ended September 30, 2020.

Stock Warrants

Company accounts for its common stock warrants under ASC 480, Distinguishing Liabilities from Equity , which requires any financial

instrument, other than an outstanding share, that, at inception, embodies an obligation to repurchase the issuer’s equity shares,

or is indexed to such an obligation, and requires or may require the issuer to settle the obligation by transferring assets, to be classified

as a liability.

In accordance with ASC 480, the Company’s outstanding warrants from the November 2019 Offering are classified as

The liability is adjusted to fair value at each reporting period, with the changes in fair value recognized as gain (loss)

on change in fair value of warrant liability in the Company’s consolidated statements of operations.

The warrants issued in the

November 2019 Offering allow the warrant holder, if certain change in control events occur, the option to receive an amount of cash equal

to the value of the warrants as determined in accordance with the Black-Scholes option pricing model with certain defined assumptions

upon a fundamental transaction.

of September 30, 2021, the Company had 1,094,030 common stock warrants outstanding from the November 2019 Offering to purchase an equal

number of shares of common stock.

The fair value of these warrants on September 30, 2021 and on December 31, 2020 was determined using

the Black-Scholes option pricing model with the following Level 3 inputs (as defined in the November 2019 Offering):

Schedule of Fair Value of Warrants

June 30, 2021

December 31, 2020

September 30,

Expected life in years

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Dividend yield

the three and six months ended June 30, 2021, the Company recorded a non-cash gain of $ 221,000 and $ 26,000 , respectively, from the change

in fair value of the November 2019 Offering warrants.

During the three and six months ended June 30, 2020, the Company recorded a non-cash

loss of $ 2.1 million and $ 3.2 million from the change in fair value of the November 2019 Offering warrants.

The following table is a

reconciliation of the warrant liability measured at fair value using level 3 inputs:

the three and nine months ended September 30, 2021, the Company recorded a non-cash gain of $ 480,000 and $ 506,000 , respectively, from

the change in fair value of the November 2019 Offering warrants.

During the three and nine months ended September 30, 2020, the Company

recorded a non-cash gain of $ 140,000 and a non-cash loss of $ 3.0 million from the change in fair value of the November 2019 Offering

The following table is a reconciliation of the warrant liability measured at fair value using level 3 inputs:

Schedule of Reconciliation of Warrant Liability

Warrant Liability

Balance at December 31, 2020

Settlement of liability on warrant exercise

Change in fair value of common stock warrants

Balance at June 30, 2021

in fair value of common stock warrants

Balance at September 30, 2021

Additionally,

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warrant holder the option to put the warrant back to the Company, the warrants are classified as equity.

Schedule of Number of Warrants Outstanding and the Weighted Average Exercise Price

following table summarizes the number of common stock warrants outstanding and the weighted average exercise price:

of Number of Warrants Outstanding and the Weighted Average Exercise Price

Weighted Average

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Outstanding at December 31, 2020

Balance at June 30, 2021

the three and six months ended June 30, 2021, zero and 10,000 common stock warrants to purchase one share of our common stock were exercised,

respectively, resulting in proceeds of zero and $ 5,000 .

Additionally, during the three and six months ended June 30, 2020, 13,497,807

and 13,618,807 common stock warrants to purchase one share of our common stock were exercised, respectively, resulting in proceeds of

approximately $ 6.9 million in each of the three and six-month periods ending June 30, 2020.

following table summarizes information about common stock warrants outstanding at June 30, 2021:

Balance at September 30, 2021

the three and nine months ended September 30, 2021, zero and 10,000 common stock warrants to purchase one share of our common stock were

exercised, respectively, resulting in proceeds of zero and $ 5,000 , respectively.

Additionally, during the three and nine months ended

September 30, 2020, 1,478,844 and 15,097,651 common stock warrants to purchase one share of our common stock were exercised, respectively,

resulting in proceeds of approximately $ 761,000 and $ 7.7 million, respectively.

following table summarizes information about common stock warrants outstanding at September 30, 2021:

Warrants outstanding

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Aggregate intrinsic value

Commitments and Contingencies

(10) Commitments

and Contingencies

Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conducting

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Company filed its reply to its motion to dismiss on October 22, 2020.

The Company intends to vigorously defend itself against these allegations

and has not recorded a liability related to this shareholder class action lawsuit as the outcome is not probable nor can an estimate

be made of loss, if any.

A hearing on the motion to dismiss has been scheduled for January

The Company intends to vigorously defend itself against these allegations and has not recorded a liability related to this

shareholder class action lawsuit as the outcome is not probable nor can an estimate be made of loss, if any.

March 13, 2020, the Company filed U.S.

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its directors and officers to the maximum extent permitted under the laws of the State of Delaware.

Agreement with Spriaso, LLC

(11) Agreement

with Spriaso, LLC

July 23, 2013, the Company entered into an assignment/license and a services agreement with Spriaso, a related-party that is majority-owned

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23, 2020 to extend the term of the agreement for an additional twelve months.

The agreement may be extended upon written agreement of

Spriaso and the Company.

The Company did not receive any reimbursements during the three and six months ended June 30, 2021 and 2020,

respectively.

Spriaso filed its first NDA and as an affiliated entity of the Company, it used up the one-time waiver for user fees for

a small business submitting its first human drug application to the FDA.

Spriaso is considered a variable interest entity under the FASB

ASC Topic 810-10, Consolidations , however the Company is not the primary beneficiary and has therefore not consolidated Spriaso.

The agreement may be reinstated upon written agreement

of Spriaso and the Company.

The Company did not receive any reimbursements during the three and nine months ended September 30, 2021

Additionally, during the three and nine months ended September 30, 2021 and 2020, the Company received $ 55,000 and zero ,

respectively, in licensing payments from Spriaso.

Spriaso filed its first NDA and as an affiliated entity of the Company, it used

up the one-time waiver for user fees for a small business submitting its first human drug application to the FDA.

Spriaso is considered

a variable interest entity under the FASB ASC Topic 810-10, Consolidations , however the Company is not the primary beneficiary

and has therefore not consolidated Spriaso.

Recent Accounting Pronouncements

Pronouncements Issued Not Yet Adopted

2016, the FASB issued Accounting Standards Update (“ASU”)

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

standard replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on

instruments within its scope, including trade receivables, and requires entities to measure all expected credit losses for financial

assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.

effective date for ASU 2016-13 was for annual and interim periods beginning after December 15, 2019.

2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments

(“ASU 2016-13”).

This standard replaces the incurred loss impairment methodology in current GAAP with a methodology that

reflects expected credit losses on instruments within its scope, including trade receivables, and requires entities to measure all expected

credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable

The original effective date for ASU 2016-13 was for annual and interim periods beginning after December 15, 2019.

in October 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses, Derivatives and Hedging, and Leases:

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financial statements.

Subsequent Event

October 14, 2021, the Company entered into the Antares License Agreement with Antares, pursuant to which the Company granted to Antares

an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize, upon final approval of TLANDO® from

Food and Drug Administration (“FDA”), the Company’s TLANDO product with respect to testosterone replacement

therapy in males for conditions associated with a deficiency or absence of endogenous testosterone, as indicated in NDA No.

208088, treatment

of Klinefelter syndrome, and pediatric indications relating to testosterone replacement therapy in males for conditions associated with

a deficiency or absence of endogenous testosterone (the “Field”), in each case within the United States.

The Antares License

Agreement also provides Antares with an option, exercisable on or before March 31, 2022 , to license TLANDO XR, the Company’s potential

once-daily oral product candidate for testosterone replacement therapy.

Upon execution of the Antares License Agreement, Antares paid

to the Company an initial payment of $ 11.0 million.

Antares will also make additional payments of $ 5.0 million to the Company on each

of January 1, 2025, and January 1, 2026, provided that certain conditions are satisfied.

The Company is also eligible to receive milestone

payments of up to $ 160.0 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year

with respect to all products licensed by Antares under the Antares License Agreement.

In addition, upon commercialization, the Company

will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20 % of net sales of TLANDO in the United

States, subject to certain minimum royalty obligations.

If Antares exercises its option to license TLANDO XR, the Company will be entitled

to an additional payment of $ 4.0 million, as well as development milestone payments of up to $ 35.0 million in the aggregate and tiered

royalty payments at rates ranging from percentages in the mid-teens to 20 % of net sales of TLANDO XR in the United States.

retains development and commercialization rights in the rest of the world, and with respect to applications outside of the Field inside

or outside the United States.

Antares will also purchase certain existing inventory of licensed products from the Company, subject to

testing and acceptance procedures.

Finally, pursuant to the terms of the Antares License Agreement, Antares is generally responsible

for expenses relating to the development (including the conduct of any clinical trials) and commercialization of licensed products in

the Field in the United States, while the Company is generally responsible for expenses relating to development activities outside of

the Field and/or the United States.

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