What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2021-11-10 · 393 added, 465 removed, 427 unchanged (67% of the section changed)

6 unchanged sentences

current assets

investment securities

and equipment, net of accumulated depreciation of $ 1,145,796 and $ 1,144,077 , respectively

and Stockholders’ Equity

2 unchanged sentences

current liabilities

- non-current portion

settlement liability - non-current portion

15 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

Research and development

Months Ended March 31,

and development

and administrative

2 unchanged sentences

( 3,114,493 )

( 9,638,444 )

( 13,194,590 )

Other income (expense):

Interest and investment

Interest expense

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

( 3,081,297 )

( 4,313,258 )

( 13,258,220 )

( 16,453,343 )

income (expense):

and investment income

loss on warrant liability

other expense, net

before income tax expense

( 3,487,581 )

3 unchanged sentences

loss per share attributable to common stock

average common shares outstanding, basic

Weighted average

common shares outstanding, basic

loss per share attributable to common stock

average common shares outstanding, diluted

Comprehensive loss:

$ ( 3,081,297 )

$ ( 4,313,258 )

$ ( 13,258,420 )

$ ( 16,453,543 )

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

Weighted average

common shares outstanding, diluted

Comprehensive

1 unchanged sentence

$ ( 3,368,082 )

unrealized loss on available-for-sale securities

Comprehensive

$ ( 3,537,181 )

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

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

Comprehensive

the Three Months Ended March 31, 2022 and 2021

Paid-In Capital

Comprehensive Loss

Stockholders’

Balances at June 30, 2020

$ 176,327,120

$ ( 163,207,474 )

( 4,313,258 )

Unrealized net gain on marketable

investment securities

Stock-based compensation

Option exercises

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

$ ( 167,520,732 )

Comprehensive

Paid-In Capital

Comprehensive Loss

Stockholders’

Balances at December 31, 2019

$ 157,391,969

at December 31, 2020

$ ( 172,032,008 )

1 unchanged sentence

( 3,368,082 )

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

net loss on marketable investment securities

stock sold through equity offering

stock issued for warrant exercises

of warrant liability on warrant exercises

stock sold through ATM offering

Balances at September

$ 182,062,701

$ ( 167,520,732 )

Comprehensive

Stockholders’

Balances at June 30, 2021

$ 217,986,752

$ ( 182,209,131 )

( 3,081,297 )

Unrealized net loss on marketable

investment securities

Stock-based compensation

Costs associated with ATM offering

Balances at September

at March 31, 2021

$ 117,845,281

$ ( 175,400,090 )

Comprehensive

Stockholders’

Balances at December 31, 2020

at December 31, 2021

$ 218,286,324

2 unchanged sentences

( 3,487,781 )

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

Balances at September

net loss on marketable investment securities

at March 31, 2022

$ 218,663,319

3 unchanged sentences

Consolidated Statements of Cash Flows

Months Ended September 30,

Months Ended March 31,

flows from operating activities:

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interest expense

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

of premium (discount) on marketable investment securities

loss on change in fair value of warrant liability

of premium on marketable investment securities

in operating assets and liabilities:

1 unchanged sentence

and other current assets

settlement liability

( 1,038,876 )

used in operating activities

2 unchanged sentences

flows from investing activities:

of property and equipment

of marketable investment securities

2 unchanged sentences

of marketable investment securities

used in investing activities

( 34,057,767 )

provided by (used in) investing activities

( 33,994,221 )

flows from financing activities:

( 2,500,000 )

( 1,111,111 )

proceeds from common stock offering

proceeds from ATM

proceeds from sale of common stock through ATM

from stock option exercises

proceeds from exercise of warrants

provided by financing activities

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

proceeds exercise of warrants

provided by (used in) financing activities

increase (decrease) in cash and cash equivalents

( 8,615,788 )

cash equivalents, and restricted cash at beginning of period

cash equivalents, and restricted cash at end of period

and cash equivalents and restricted cash at beginning of period

and cash equivalents and restricted cash at end of period

disclosure of cash flow information:

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of warrant liability on warrant exercises

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

unrealized gain or 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 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.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results

that may be expected for any future period or for the year ending December 31, 2022.

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 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.

requirements through at least March 31, 2023 which includes an on-going clinical study for LPCN 1148, compliance with regulatory requirements

and on-going litigation 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

clinical studies for LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107 and neuroactive steroids (“NAS”) including LPCN 1544 and

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

through at least March 31, 2023, the Company will need to raise additional capital at some point through the equity or debt markets or

via out-licensing activities, before or after March 31, 2023, to support its operations.

If the Company is unsuccessful in raising additional

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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

pursues additional clinical studies for LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107, and NAS including LPCN 1154 and LPCN 2101.

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

under our operating plan, if it terminates, modifies the design or suspends on-going clinical studies, or if it terminates or settles

any on-going litigation activities.

Company generates most of its revenue from license and royalty arrangements.

At inception of each contract, the Company identifies the

goods and services that have been promised to the customer and each of those that represent a distinct performance obligation, determines

the transaction price including any variable consideration, allocates the transaction price to the distinct performance obligations and

determines whether control transfers to the customer at a point in time or over time.

Variable consideration is included in the transaction

price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when

the uncertainty associated with the variable consideration is subsequently resolved.

The Company reassess its reserves for variable consideration

at each reporting date and makes adjustments, if necessary, which may affect revenue and earnings in periods in which any such changes

become known.

Note 8 for a description of the license agreement with Antares Pharma, Inc.

See Note 12 for a description of the agreement with Spriaso.

For distinct license performance obligations, upfront license fees are recognized when the Company satisfies the underlying

performance obligation.

This generally occurs upon transfer of the right to use the Company’s licensed technology to the customer.

In addition, license arrangements may include contingent milestone payments, which are due following achievement by our licensee of specified

sales or regulatory milestones and the licensee and/or Company will fulfill its performance obligation prior to achievement of these

Because of the uncertainty of the milestone achievement, and/or the dependence on sales of our licensee, variable consideration

for contingent milestones is fully constrained and is not recognized as revenue until the milestone is achieved by our licensee, to the

extent collectability is reasonably certain.

Royalties revenue consists of sales-based and minimum royalties earned under licenses agreements for our products.

Performance obligations

under these licenses, which consist of the right to use the Company’s proprietary technology, are satisfied at a point in time

corresponding with delivery of the underlying technology rights to the licensee, which is generally upon transfer of the licensed technology/product

to the customer.

Sales-based royalties revenue represents variable consideration under the license agreements and is recognized in the

period a customer sells products incorporating the Company’s licensed technologies/products.

The Company estimates sales-based

royalties revenue earned but unpaid at each reporting period using information provided by the licensee.

The Company’s license

arrangements may also provide for minimum royalties, which the Company recognizes upon the satisfaction of the underlying performance

obligation, which generally occurs with delivery of the underlying technology rights to the licensee.

Sales-based and minimum royalties

are generally due within 45 days after the end of each quarter in which they are earned.

assets consist of minimum royalty revenue earned in relation to the license agreement but not yet payable based on the terms of the contract.

The contract asset as of March 31, 2022 is related to the Antares License Agreement.

Concentration

major customer is considered to be one that comprises more than 10 % of the Company’s total revenues.

There was no revenue recognized

for either the three months ended March 31, 2022, or March 31, 2021.

(3) Earnings (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 nine months

ended September 30, 2021 and 2020:

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

March 31, 2022 and 2021:

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Basic loss per share attributable

to common stock:

$ ( 3,081,297 )

$ ( 4,313,258 )

$ ( 13,258,420 )

$ ( 16,453,543 )

Weighted avg.

shares outstanding

Basic loss per share

attributable to common stock

Diluted loss per share attributable

to common stock:

Months Ended March 31,

loss per share attributable to common stock:

$ ( 3,487,781 )

$ ( 3,368,082 )

common shares outstanding

loss per share attributable to common stock

loss per share attributable to common stock:

$ ( 3,487,781 )

$ ( 3,368,082 )

Weighted avg.

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

common shares outstanding

loss per share attributable to common stock

computation of diluted loss per share for the three months ended March 31, 2022 and 2021 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:

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Stock options

Unvested restricted stock units

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

(4) Marketable Investment Securities

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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 September 30, 2021 and December 31, 2020 were as follows:

securities by major security type and class of security as of March 31, 2022, and December 31, 2021, were as follows:

Schedule of Available-for-Sale Securities

1 unchanged sentence

unrealized holding losses

Corporate bonds, notes and commercial

treasury bills

bonds, notes and commercial paper

unrealized holding gains

unrealized holding losses

Commercial paper

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

treasury bills

bonds, notes and commercial paper

of debt securities classified as available-for-sale securities as of March 31, 2022, are as follows:

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

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.

within one year

after one year through two years

were no sales of marketable investment securities during the three months ended March 31, 2022, and 2021 and therefore no realized gains

Additionally, $ 25.2 million and $ 450,000 of marketable investment securities matured during the three months ended March 31,

2022, and 2021, respectively.

The Company determined there were no other-than-temporary impairments for the three months ended March

31, 2022, and 2021.

(5) Fair Value

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 September 30, 2021 and December 31, 2020:

and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

Schedule of Fair Value, Assets Measured on Recurring Basis

value measurements at reporting date using

September 30,

Cash equivalents

- money market funds

Commercial Paper

Corporate bonds and notes

equivalents - money market funds

treasury bills

bonds and notes

value measurements at reporting date using

Cash equivalents

- money market funds

Commercial paper

equivalents - money market funds

treasury bills

bonds and notes

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 September 30, 2021, include (i) volatility

assumptions used in preparing the option pricing model for valuing the warrant liability as of March 31, 2022, include (i) volatility

of 100 %, (ii) risk free interest rate of 2.64 %, (iii) strike price of $ 0.50 , (iv) fair value of common stock of $ 1.38 , and (v) expected

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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 nine

months ended September 30, 2021.

and Security Agreements and Other Liabilities

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

March 31, 2022.

(6) Loan and Security Agreements

Valley Bank Loan

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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 September

or any successor publication representing the rate of interest per annum then in effect, plus one percent per annum ( 4.5 % as of March

31, 2022), which interest is payable monthly .

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will also be required to pay an additional final payment at maturity equal to $ 650,000 (the “Final Payment Charge”).

Final Payment Charge will be due on the scheduled maturity date and to date approximately $ 636,000 has been recognized as an increase

to the principal balance with a corresponding charge to interest expense with the remaining final payment charge to be recognized over

the term of the facility using the effective interest method.

At its option, the Company may prepay all amounts owed under the Loan and

Security Agreement (including all accrued and unpaid interest and the Final Payment Charge).

Final Payment Charge will be due on the scheduled maturity date and as of March 31, 2022, approximately $ 649,000 has been recognized

as an increase to the principal balance with a corresponding charge to interest expense with the remaining final payment charge to be

recognized over the term of the facility using the effective interest method.

At its option, the Company may prepay all amounts owed

under the Loan and Security Agreement (including all accrued and unpaid interest and the Final Payment Charge).

connection with the Loan and Security Agreement, the Company granted to SVB a security interest in substantially all of the Company’s

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

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.

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,

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than $ 100,000 individually or in the aggregate.

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

maturities of principal payments on the Loan and Security Agreement as of March 31, 2022, are as follows:

of Future Maturities of Principal Payments

Ending December 31,

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

the CARES Act Section 2302.

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

As of September 30,

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

(7) Income Taxes

tax provision for interim periods is determined using an estimate of the Company’s effective tax rate for the full year adjusted

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

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

March 31, 2022 and December 31, 2021, 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.

(8) Contractual Agreements

Products, Inc.

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All obligations

under the prior license agreement have been completed except that Lipocine will owe Abbott a perpetual 1 % royalty on net sales.

royalties are limited to $ 1.0 million in the first two calendar years following product launch, after which period there is not a cap

on royalties and no maximum aggregate amount.

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 nine months ended September 30, 2021 and 2020.

under the prior license agreement have been completed except that Lipocine will owe Abbott a perpetual 1 % royalty on our licensee’s

net sales of TLANDO.

Such royalties are limited to $ 1.0 million in the first two calendar years following product launch, after which

period there is not a cap on royalties and no maximum aggregate amount.

If generic versions of any such product are introduced, then

royalties are reduced by 50 %.

The Company did not incur any royalties during the three months ended March 31, 2022, and 2021.

October 14, 2021, the Company entered into a license agreement (“License Agreement”) with Antares Pharma, Inc.

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 the U.S.

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.

On April 1, 2022, the

Company entered into the First Amendment to the License Agreement (the “Amendment”), pursuant to which the License Agreement

was amended to extend the deadline by which Antares shall exercise its option to license TLANDO XR to June 30, 2022.

As consideration

for the Company agreeing to enter into the Amendment, in April 2022 Antares paid the Company a non-refundable cash fee of $ 500,000 which

will be creditable toward the license fee agreed to in the License Agreement of $ 4 million.

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 $ 3.5 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.

The Company did not recognize any revenue under the Antares Licensing Agreement during either the

three months ended March 31, 2022, or March 31, 2021.

Research and Development

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as advisors to the Company.

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.

On May 6, 2014, the Company modified and extended the lease through February 28, 2018.

On February 8, 2018, the Company extended the

lease through February 28, 2019, on January 2, 2019, the Company extended the lease through February 29, 2020, on February 24, 2020,

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 September 30, 2021 are:

The Company incurred expenses of $ 1.0 million and $ 837,000 , respectively, for the three months ended March

31, 2022 and 2021 under these agreements and has recorded these expenses in research and development expenses.

Company has a non-cancelable operating lease for office space and laboratory facilities in Salt Lake City, Utah.

The term of the lease

has been extended through February 28, 2023.

minimum lease payments under non-cancelable operating leases as of March 31, 2022 are:

Schedule of Future Minimum Rental Payments for Operating Leases

ending December 31:

ending March 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’

Company’s rent expense was $ 84,000 and $ 83,000 for each of the three months ended March 31, 2022 and 2021, respectively.

(10) Stockholders’ Equity

of Common Stock

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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.

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.

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 consisted 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 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 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.

of March 31, 2022, we had sold an aggregate of 15,023,073 shares at a weighted-average sales price of $ 2.19 per share under the ATM 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 March 31, 2022, the Company did not sell any shares of our common stock pursuant

to the Sales Agreement.

During the three months ended March 31, 2021, the Company sold 1,811,238 shares of our common stock pursuant

to the Sales Agreement 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.

As of March 31, 2022, 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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Stock-based compensation cost that has been expensed in the statements of

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:

operations amounted to approximately $ 171,000 and $ 148,000 , respectively, for the three months ended March 31, 2022 and 2021 and

is allocated as follows:

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

General and administrative

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.

and development

and administrative

Company issued 332,500 and 310,000 stock options, respectively, during the three months ended March 31, 2022 and 2021.

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 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:

options granted during the three months ended March 31, 2022 and 2021, 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

Expected term

Risk-free interest rate

Expected dividend yield

Expected volatility

interest rate

dividend yield

ASC 718, Stock Compensation, requires the Company to recognize compensation expense for the portion of options that are expected

2 unchanged sentences

in future periods.

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

of March 31, 2022, there was $ 1.2 million of total unrecognized compensation cost related to unvested share-based compensation arrangements

granted under the Company’s stock option plan.

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rights, restricted stock units, restricted stock and dividend equivalents.

An aggregate of 1,000,000 shares were authorized for issuance

under the 2014 Plan.

Additionally, 271,906 remaining authorized shares under the 2011 Equity Incentive Plan (“2011 Plan”)

were issuable under the 2014 Plan at the time of the 2014 Plan adoption.

Upon receiving shareholder approval in June 2016, the 2014 Plan

was amended and restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted

under the 2014 Plan from 1,271,906 to 2,471,906 .

Additionally, upon receiving shareholder approval in June 2018, the 2014 Plan was further

amended and restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted under

the 2014 Plan from 2,471,906 to 3,221,906 .

Finally, upon receiving shareholder approval in June 2020, the 2014 Plan was further amended

and restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted under the 2014

Plan from 3,221,906 to 5,721,906 .

The board of directors, on an option-by-option basis, determines the number of shares, exercise price,

term, and vesting period for options granted.

The 2014 Plan has been amended and restated several times

to increase the authorized number of shares of common stock of the Company issuable under all awards granted under the 2014 Plan.

board of directors, on an option-by-option basis, determines the number of shares, exercise price, term, and vesting period for options

Options granted generally have a ten-year contractual life.

The Company issues shares of

common stock upon the exercise of options with the source of those shares of common stock being either newly issued shares or shares

held in treasury.

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 September 30, 2021.

The Company issues shares of common stock upon the exercise of options

with the source of those shares of common stock being either newly issued shares or shares held in treasury.

An aggregate of 5,721,906

shares are authorized for issuance under the 2014 Plan, with 1,062,651 shares remaining available for grant as of March 31, 2022.

summary of stock option activity is as follows:

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average exercise price

Balance at December 31, 2020

Options granted

Options exercised

Options forfeited

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:

at December 31, 2021

at March 31, 2022

exercisable at March 31, 2022

following table summarizes information about stock options outstanding and exercisable at March 31, 2022:

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

Options outstanding

Options exercisable

Number outstanding

Weighted average remaining contractual life (Years)

Weighted average exercise price

Aggregate intrinsic value

Number exerciseable

Weighted average remaining contractual life (Years)

Weighted average exercise price

Aggregate intrinsic value

average remaining contractual life (Years)

average exercise price

intrinsic value

average remaining contractual life (Years)

average exercise price

intrinsic value

intrinsic value for stock options is defined as the difference between the current market value and the exercise price.

There were zero

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.

There were 208,274

and 4,584 stock options exercised during the three months ended March 31, 2022, and March 31, 2021, respectively.

Stock Warrants

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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):

of March 31, 2022, 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 March 31, 2022, and on December 31, 2021.

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

September 30,

Expected life in years

Risk-free interest rate

Dividend yield

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:

life in years

interest rate

the three months ended March 31, 2022, and March 31, 2021, the Company recorded a non-cash loss of approximately $ 378,000 and $ 195,000 ,

respectively, 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:

Schedule of Reconciliation of Warrant Liability

Balance at December 31, 2020

Settlement of liability on warrant exercise

at December 31, 2021

of liability on warrant exercise

in fair value of common stock warrants

Balance at September 30, 2021

at March 31, 2022

Additionally,

1 unchanged sentence

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:

Weighted Average

Exercise Price

Outstanding at December 31, 2020

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

Number exercisable

Weighted average remaining contractual life (Years)

Weighted average exercise price

Aggregate intrinsic value

(10) Commitments

and Contingencies

As of March 31, 2022, and March

31, 2021, there were 840,336 warrants outstanding that were issued in conjunction with the February 2020 Offering.

were no common stock warrants exercised during the three months ended March 31, 2022.

During the three months ended March 31, 2021, 10,000

common stock warrants to purchase one share of our common stock were exercised, resulting in proceeds of approximately $ 5,000 in the

three months ended March 31, 2021.

following table summarizes information about common stock warrants outstanding at March 31, 2022:

Schedule of Number of Weighted Average Exercise Price

average remaining contractual life (Years)

average exercise price

intrinsic value

(11) 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

5 unchanged sentences

6,569,463 and 6,923,988 in an effort to streamline the issues and associated costs for dispute.

Clarus has answered

the complaint and asserted counterclaims of non-infringement, inequitable conduct and invalidity.

The Company answered Clarus’s

counterclaims on April 29, 2019.

The Court held a scheduling conference on August 15, 2019, a claim construction hearing on February

11, 2020 and a Summary Judgement Hearing on January 15, 2021.

In May 2021, the Court granted Clarus’ motion for Summary Judgment,

finding the asserted claims of Lipocine’s U.S.

Clarus answered the

complaint and asserted counterclaims of non-infringement and invalidity.

The Company answered Clarus’s counterclaims on April 29,

The Court held a scheduling conference on August 15, 2019, a claim construction hearing on February 11, 2020, and a summary judgment

hearing on January 15, 2021.

In May 2021, the Court granted Clarus’ motion for Summary Judgment, finding the asserted claims of

Lipocine’s U.S.

patents 9,034,858;

and 9,757,390 invalid for failure to satisfy

the written description requirement of 35 U.S.C.

Clarus still had remaining counterclaims before the Court.

On July 13, 2021,

Clarus and the Company entered into a global settlement agreement (“Global Agreement’) which resolved all outstanding claims

of this litigation as well as the on-going United States Patent and Trademark Office (“USPTO”) Interference No.

106,128 between

Under the terms of the Global Agreement, the Company agreed to pay Clarus $ 4.0 million payable as follows:

$ 2.5 million

immediately, $ 1.0 million on July 13, 2022 and $ 500,000 on July 13, 2023.

and 9,757,390 invalid for failure to satisfy the written description requirement

Clarus still had remaining claims before the Court.

On July 13, 2021, the Company entered into the Global Agreement

with Clarus which resolved all outstanding claims of this litigation as well as the on-going United States Patent and Trademark Office

(“USPTO”) Interference No.

106,128 between the parties.

Under the terms of the Global Agreement, the Company agreed to pay

Clarus $ 4.0 million payable as follows:

$ 2.5 million immediately, $ 1.0 million on July 13, 2022 and $ 500,000 on July 13, 2023.

29, 2022, the Company agreed to an amendment to Section 3.1 of the Global Agreement, pursuant to which the Company agreed to pay Clarus

$ 1,250,000 in May 2022, with no additional payments required thereafter.

No future royalties are owing from either party.

2021, the Court dismissed with prejudice the Company’s claims and Clarus’ counterclaims.

November 14, 2019, the Company and certain of its officers were named as defendants in a purported shareholder class action lawsuit,

November 14, 2019, the Company and certain of our officers were named as defendants in a purported shareholder class action lawsuit,

Solomon Abady v.

2 unchanged sentences

The complaint

alleges that the defendants made false and/or misleading statements and/or failed to disclose that our filing of the NDA for TLANDO to

the FDA contained deficiencies and as a result the defendants’ statements about our business and operations were false and misleading

and/or lacked a reasonable basis in violation of federal securities laws.

The lawsuit seeks certification as a class action (for a purported

class of purchasers of the Company’s securities from March 27, 2019 through November 8, 2019), compensatory damages in an unspecified

amount, and unspecified equitable or injunctive relief.

The Company has insurance that covers claims of this nature.

The retention amount

payable by the Company under our policy is $ 1.25 million.

The Company filed a motion to dismiss the class action lawsuit on July 24,

In response, the plaintiffs filed their response to the motion to dismiss the class action lawsuit on September 22, 2020 and the

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

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.

alleges that the defendants made false and/or misleading statements and/or failed to disclose that the Company’s filing of the

NDA for TLANDO to the FDA contained deficiencies and as a result the defendants’ statements about our business and operations were

false and misleading and/or lacked a reasonable basis in violation of federal securities laws.

The lawsuit seeks certification as a class

action (for a purported class of purchasers of the Company’s securities from March 27, 2019 through November 8, 2019), compensatory

damages in an unspecified amount, and unspecified equitable or injunctive relief.

The Company has insurance that covers claims of this

The retention amount payable by us under our policy is $ 1.25 million.

The Company filed a motion to dismiss this class action

lawsuit on July 24, 2020.

In response, the plaintiffs filed their response to the motion to dismiss the class action lawsuit on September

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

A hearing on the motion to dismiss occurred on

January 12, 2022.

The Company intends to vigorously defend ourselves against these allegations and have 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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with the USPTO.

On October 16 and November 3, 2020, Lipocine filed suggestions for interference with the USPTO requesting that a patent

On October 16 and November 3, 2020, the Company filed suggestions for interference with the USPTO requesting that a patent

interference be declared between the Lipocine ‘779 Application and US patent application serial number 16/656,178 to Clarus Therapeutics,

(the “Clarus ‘178 Application”).

Pursuant to the Company’s request, the Patent Trial and Appeal Board (“PTAB”)

Pursuant to our request, the Patent Trial and Appeal Board (“PTAB”)

at the USPTO declared the interference on January 4, 2021 to ultimately determine, as between the Company and Clarus, who is entitled

to the claimed subject matter.

The interference number is 106,128, and the Company was initially declared Senior Party.

call with the PTAB was held on January 25, 2021 to discuss proposed motions.

On February 1, 2021, the PTAB issued an order authorizing

certain motions and setting the schedule for the preliminary motions phase.

On July 13, 2021, Clarus and the Company entered into the

Global Agreement to resolve interference No.

The interference number is 106,128, and we were initially declared Senior Party.

A conference call with

the PTAB was held on January 25, 2021 to discuss proposed motions.

On February 1, 2021, the PTAB issued an order authorizing certain

motions and setting the schedule for the preliminary motions phase.

On July 13, 2021, the Company entered into the Global Agreement with

Clarus to resolve interference No.

106,128 among other items.

On July 26, 2021, the PTAB granted the Company’s request

for adverse judgment in interference No.

On July 26, 2021, the PTAB granted the Company’s request for adverse

judgment in interference No.

106,128 in accordance with the Global Agreement.

Solomon Abady v.

Lipocine Inc.

et al., 2:19-cv-00906-PM

matter, management does not currently believe that any other matter, individually or in the aggregate, will have a material adverse effect

on our financial condition, liquidity or results of operations.

and Indemnifications

3 unchanged sentences

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

(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

by certain current and former directors of Lipocine Inc.

(12) Agreement with Spriaso, LLC

Company has a license and a services agreement with Spriaso, a related-party that is majority-owned by certain current and former directors

of Lipocine Inc.

and their affiliates.

Under the license agreement, the Company assigned and

transferred to Spriaso all of the Company’s rights, title and interest in its intellectual property to develop products for the

cough and cold field.

In addition, Spriaso received all rights and obligations under the Company’s product development agreement

with a third-party.

In exchange, the Company will receive a royalty of 20 percent of the net proceeds received by Spriaso, up to a maximum

of $ 10.0 million.

Spriaso also granted back to the Company an exclusive license to such intellectual property to develop products outside

of the cough and cold field.

Under the service agreement, the Company provided facilities and up to 10 percent of the services of certain

employees to Spriaso for a period of 18 months which expired January 23, 2015.

Effective January 23, 2015, the Company entered into an

amended services agreement with Spriaso in which the Company agreed to continue providing up to 10 percent of the services of certain

employees to Spriaso at a rate of $ 230 /hour for a period of six months.

The agreement was further amended on July 23, 2015, on January

23, 2016, on July 23, 2016, on January 23, 2017, on July 23, 2017, on January 23, 2018, on July 23, 2018 and again on January 23, 2019

to extend the term of the agreement for an additional six months.

The agreement was further amended on July 23, 2019 and again on July

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

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.

Under the license agreement, the Company assigned and transferred to Spriaso all of the Company’s

rights, title and interest in its intellectual property to develop products for the cough and cold field.

In addition, Spriaso received

all rights and obligations under the Company’s product development agreement with a third-party.

In exchange, the Company will

receive a royalty of 20 percent of the net proceeds received by Spriaso, up to a maximum of $ 10.0 million.

Spriaso also granted back

to the Company an exclusive license to such intellectual property to develop products outside of the cough and cold field.

also agreed to continue providing up to 10 percent of the services of certain employees to Spriaso for a period of time.

The agreement

to provide services expired in 2021;

however, it may be extended upon written agreement of Spriaso and the Company.

The Company did not

receive any reimbursements from Spriaso for the three months ended March 31, 2022 and 2021, respectively.

Additionally, during the three

months ended March 31, 2022 and 2021, the Company did not receive any royalty revenue 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.

(13) Recent Accounting Pronouncements

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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.

(14) Subsequent Events

to Antares License Agreement

Antares License Agreement 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.

On April 1, 2022, the Company entered into the First

Amendment to the License Agreement (the “Amendment”) with Antares, pursuant to which the License Agreement was amended to

extend the deadline by which Antares shall exercise its option to license TLANDO XR to June 30, 2022.

As consideration for the Company

agreeing to enter into the Amendment, in April 2022 Antares paid the Company a non-refundable cash fee of $ 500,000 which will be creditable

toward the license fee agreed to in the License Agreement of $ 4 million.

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

will be entitled to additional upfront payments in 2022 totaling $ 3.5 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.

to Global Agreement with Clarus

April 29, 2022, the Company entered into an amendment to the Global Agreement with Clarus, pursuant to which installment payment provisions

and amounts of Section 3.1 of the Global Agreement were amended.

The terms of the original Agreement provided for the Company to make

two installment payments to Clarus:

$ 1,000,000 on or before the twelve-month anniversary of the Global Agreement, and $ 500,000 on or

before the twenty-four-month anniversary of the Agreement.

Under the terms of the amendment, the Company will make one payment of $ 1,250,000

in May 2022, and no additional payments thereafter.

All remaining provisions of the Global Agreement remain unchanged.

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