What changed in this filing

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Item 1. Financial Statements

2023-11-08 compared with 2023-08-10 · 1346 added, 266 removed, 680 unchanged (70% of the section changed)

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Current assets:

Cash and cash equivalents

Marketable investment securities

Accrued interest income

Contract asset - current portion

Prepaid and other current assets

Total current assets

Contract asset - non-current portion

Property and equipment, net of accumulated depreciation of $ 1,166,441 and $ 1,153,530 respectively

Liabilities and Stockholders’ Equity

and cash equivalents

investment securities

Accrued interest

Contract asset

- current portion

other current assets

Total current

Contract asset

- non-current portion

equipment, net of accumulated depreciation of $ 1,174,189 and $ 1,153,530

Liabilities and Stockholders’

Current liabilities:

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Accrued expenses

Total current liabilities

Total current

Warrant liability

Total liabilities

Commitments and contingencies (notes 6, 8, 9 and 11)

Stockholders’ equity:

and contingencies (notes 6, 8, 9 and 11)

Stockholders’

Common stock, par value $ 0.0001 per share, 200,000,000 shares authorized;

5,235,166 issued and 5,234,830 outstanding

Additional paid-in capital

Treasury stock at cost, 336 shares

Accumulated other comprehensive loss

Accumulated deficit

5,316,166 and 5,235,166 issued and 5,315,830

and 5,234,830 outstanding

paid-in capital

stock at cost, 336 shares

other comprehensive loss

( 197,494,961 )

( 183,425,043 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

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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,

License revenue

Minimum guaranteed royalties revenue

(reversal of variable consideration)

( 3,121,996 )

Total revenues (reversal of variable consideration), net

( 3,121,996 )

( 3,067,006 )

Operating expenses:

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Consolidated Statements of Changes in Stockholders’ Equity

the Three and Six Months Ended June 30, 2023 and 2022

Stockholder’s

B Preferred Stock

Accumulated Other

Comprehensive

the Three and Nine Months Ended September 30, 2023 and 2022

Mezzanine Equity

Stockholder’s Equity

Series B Preferred Stock

Treasury Stock

Number of Shares

Paid-In Capital

Comprehensive Loss

Accumulated Deficit

Stockholders’

Balances at March 31, 2022

Balances at June 30, 2022

$ 218,792,479

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( 2,409,165 )

Unrealized net loss on marketable investment securities

Unrealized net gain on marketable investment securities

Stock-based compensation

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Costs associated with ATM Offering

Balances at June 30, 2022

$ 218,792,479

$ ( 178,785,965 )

Balances at September 30, 2022

$ 218,952,749

$ ( 181,195,130 )

Stockholder’s

B Preferred Stock

Accumulated Other

Comprehensive

Stockholders’

Mezzanine Equity

Stockholder’s Equity

Series B Preferred Stock

Treasury Stock

Number of Shares

Paid-In Capital

Comprehensive Loss

Accumulated Deficit

Stockholders’ Equity

Balances at December 31, 2021

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Costs associated with ATM Offering

Balances at June 30, 2022

$ 218,792,479

$ ( 178,785,965 )

Balances at September 30, 20 22

$ 218,952,749

$ ( 181,195,130 )

Stockholder’s

B Preferred Stock

Accumulated Other

Comprehensive

Mezzanine Equity

Stockholder’s Equity

Series B Preferred Stock

Treasury Stock

Number of Shares

Paid-In Capital

Comprehensive Gain (Loss)

Accumulated Deficit

Stockholders’

Balances at March 31, 2023

$ 219,284,000

$ ( 187,295,362 )

$ 219,284,000

Balances at June 30, 2023

( 190,843,991 )

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( 6,650,970 )

Unrealized net loss on marketable investment securities

Unrealized net gain on marketable investment securities

Stock-based compensation

Redemption of Series B preferred stock

Costs associated with ATM offering

Balances at June 30, 2023

$ 219,443,674

$ ( 190,843,991 )

Common stock sold through ATM offering

Balances at September 30, 2023

$ 220,022,838

$ ( 197,494,961 )

Stockholder’s

B Preferred Stock

Comprehensive

Stockholders’

Mezzanine Equity

Stockholder’s Equity

Series B Preferred Stock

Treasury Stock

Number of Shares

Paid-In Capital

Comprehensive Loss

Accumulated Deficit

Stockholders’ Equity

Balances at December 31, 2022

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Redemption of Series B preferred stock

Costs associated with ATM Offering

Balances at June 30, 2023

Common stock sold through ATM offering

Balances at September 30, 2023

$ 220,022,838

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accompanying notes to unaudited condensed consolidated financial statements

LIPOCINE INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

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Amortization of premium (discounts) on marketable investment securities

Write off of contract asset due to variable consideration revenue reversal

Changes in operating assets and liabilities:

Accrued interest income

Contract asset

Prepaid and other current assets

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End of loan payment

Costs associated with ATM Offering

Net proceeds from sale of common stock through ATM

Proceeds from stock option exercises

Cash used in financing activities

Cash provided by (used in) financing activities

( 2,121,044 )

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Accrued final payment charge on debt

Issuance of Series B preferred stock dividend

Issuance of Series B preferred stock

accompanying notes to unaudited condensed consolidated financial statements

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in accordance with rules and regulations of the SEC.

Operating results for the three and six months ended June 30, 2023 are not necessarily

indicative of the results that may be expected for any future period or for the year ending December 31, 2023.

Operating results for the three and nine months ended September 30, 2023 are not

necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2023.

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

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results could differ from these estimates.

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

requirements through at least August 10, 2024 which includes an on-going clinical study for LPCN 1148 in the management of decompensated

cirrhosis, a confirmatory pivotal pharmacokinetic (“PK”) study for LPCN 1154 in Postpartum Depression (“PPD”), 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 clinical

studies for LPCN 1148, LPCN 1154, LPCN 1144 for non-cirrhotic non-alcoholic steatohepatitis (“NASH”), LPCN 1111 an oral TRT

product with the potential for once daily dosing, LPCN 1107 for the prevention of recurrent preterm birth, and LPCN 2101 for epilepsy.

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

least August 10, 2024, the Company will need to raise additional capital at some point through the equity or debt markets or via out-licensing

activities 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 1148,

LPCN 1144, LPCN 1111, LPCN 1107, LPCN 1154 and LPCN 2101.

Conversely, the Company’s capital resources could last longer if the

Company reduces expenses, reduces the number of activities currently contemplated under its operating plan, or terminates, modifies the

design or suspends on-going clinical studies.

Company believes that its existing capital resources,

together with interest thereon, will be sufficient to meet its projected operating requirements through at least November 8, 2024 which

includes an on-going clinical study for LPCN 1148 in the management of decompensated cirrhosis, a confirmatory pivotal pharmacokinetic

(“PK”) study for LPCN 1154 in Postpartum Depression (“PPD”), and compliance with regulatory requirements.

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

1154, LPCN 1144 for non-cirrhotic non-alcoholic steatohepatitis (“NASH”), LPCN 1111 an oral TRT product with the potential

for once daily dosing, LPCN 1107 for the prevention of recurrent preterm birth, and LPCN 2101 for epilepsy.

While the Company believes

it has sufficient liquidity and capital resources to fund our projected operating requirements through at least November 8, 2024, the

Company will need to raise additional capital at some point through the equity or debt markets or via out-licensing activities 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 1148, LPCN 1144, LPCN

1111, LPCN 1107, LPCN 1154 and LPCN 2101.

Conversely, the Company’s capital resources could last longer if the Company reduces

expenses, reduces the number of activities currently contemplated under its operating plan, or terminates, modifies the design or suspends

on-going clinical studies.

May 10, 2023, at the 2023 annual meeting of the stockholders, the Company’s stockholders approved an amendment to the Company’s

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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, a related party.

Note 8 for a description of the license agreement (“License Agreement”) with Antares Pharma, Inc.

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

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

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which they are earned.

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

The contract asset as of June 30, 2023 is related to the Antares License Agreement.

The contract asset was reduced by approximately $ 218,000

for royalty payments received during 2022.

These royalties were received from Antares under the terms of our license agreement based

on net sales of TLANDO.

Based on the terms of the license agreement, the Company estimates that it will receive a royalty payment of

approximately $ 579,000 relating to the contract asset in the third quarter of 2023.

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

On October 2, 2023, the Company received notice from Antares of Antares’ termination of the License Agreement which

stated that the License Agreement will terminate effective January 31, 2024.

The Company received approximately $ 772,000

from Antares during the third quarter of 2023 under the terms of our license agreement, of which approximately $ 580,000

was applied to the contract asset and $ 192,000

was applied to imputed interest receivable.

Based on the termination notice, the Company has recorded a non-cash revenue reversal of

variable consideration relating to the minimum guaranteed royalties recorded as part of the License Agreement of approximately

million for the balance of the contract asset that is not expected to be received, thus the remaining contract asset balance equals

the expected fourth quarter royalty payment, based on net sales in the third quarter of 2023.

Concentration

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

The Company recognized revenue

of $ 0 and $ 500,000 for the three months ended June 30, 2023, and 2022, respectively.

The Company recognized revenue of approximately

$ 55,000 and $ 500,000 for the six months ended June 30, 2023, and 2022, respectively.

Revenue recognized in 2023 was 100 % from a related-party,

Revenue recognized in 2022 was 100 % from one major customer, Antares.

major partner is considered to be one that comprises more than 10 %

of the Company’s total revenues.

The Company recognized a reversal of revenue relating to variable consideration of the Antares

License Agreement of $ 3.1

million and $ 0

for the three months ended September 30, 2023,

and 2022, respectively, due to the termination of the License Agreement.

The Company recognized a net reversal of revenue relating to

the variable consideration of the Antares License Agreement of approximately $ 3.1

million and revenue of $ 500,000

for the nine months ended September 30, 2023,

and 2022, respectively.

License revenue recognized in 2023 of $ 55,000 ,

from a related-party, Spriaso.

License revenue recognized in 2022 was 100 %

from one major customer, Antares.

Earnings (Loss) per Share

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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, 2023 and 2022:

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, 2023 and 2022:

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Basic loss per share attributable to common stock:

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Diluted loss per share attributable to common stock

computation of diluted loss per share for the three and six months ended June 30, 2023 and 2022 does not include the following stock

options and warrants to purchase shares of common stock in the computation of diluted loss per share because these instruments were antidilutive:

computation of diluted loss per share for the three and nine months ended September 30, 2023 and 2022 does not include the following

stock options and warrants to purchase shares of common stock in the computation of diluted loss per share because these instruments

were antidilutive:

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

September 30,

Stock options

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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 as of June 30, 2023, and December 31, 2022, were as follows:

securities by major security type and class of security as of September 30, 2023, and December 31, 2022, were as follows:

of Available for Sale Securities

June 30, 2023

holding gains

September 30, 2023

Amortized Cost

Gross unrealized holding gains

Gross unrealized holding losses

Aggregate fair value

Government treasury bills

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December 31, 2022

holding gains

Amortized Cost

Gross unrealized holding gains

Gross unrealized holding losses

Aggregate fair value

Government treasury bills

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government agency securities

of debt securities classified as available-for-sale securities as of June 30, 2023, are as follows:

of debt securities classified as available-for-sale securities as of September 30, 2023, are as follows:

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

June 30, 2023

September 30, 2023

Amortized Cost

Aggregate fair value

Due within one year

were no sales of marketable investment securities during the three and six months ended June 30, 2023, and 2022 and therefore no realized

gains or losses.

Additionally, during the three months ended June 30, 2023 and 2022, $ 5.9 million and $ 8.6 million of marketable investment

securities matured, and during the six months ended June 30, 2023 and 2022, $ 17.9 million and $ 33.8 million of marketable investment

securities matured, respectively.

The Company determined there were no other-than-temporary impairments for the three and six months

ended June 30, 2023, and 2022.

(5) Fair Value

were no sales of marketable investment securities during the three and nine months ended September 30, 2023, and 2022 and therefore no

realized gains or losses.

Additionally, during the three months ended September 30, 2023, and 2022, $ 6.0 million and $ 11.5 million of

marketable investment securities matured, and during the nine months ended September 30, 2023 and 2022, $ 23.9 million and $ 45.3 million

of marketable investment securities matured, respectively.

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

the three and nine months ended September 30, 2023, and 2022.

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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fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 Inputs:

prices for identical instruments in active markets.

Level 2 Inputs:

prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active,

and model-derived valuation in which all significant inputs and significant value drivers are observable in active markets.

Level 3 Inputs:

derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Quoted prices for identical instruments in active markets.

Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets

that are not active, and model-derived valuation in which all significant inputs and significant value drivers are observable in

active markets.

Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs.

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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 as of June 30, 2023 and December 31, 2022:

and liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022:

of Fair Value, Assets Measured on Recurring Basis

Fair value measurements at reporting date using

June 30, 2023

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

Government treasury bills

Commercial paper

Corporate bonds and notes

value measurements at reporting date using

equivalents - money market funds

treasury bills

bonds and notes

Government agency securities

Warrant liability

Fair value measurements at reporting date using

December 31, 2022

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

Government treasury bills

Commercial paper

Corporate bonds and notes

value measurements at reporting date using

equivalents - money market funds

treasury bills

bonds and notes

government agency securities

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, 2023, include (i) volatility

assumptions used in preparing the option pricing model for valuing the warrant liability as of September 30, 2023, include (i) volatility

of 100 %, (ii) risk free interest rate of 5.45 %, (iii) strike price of $ 8.50 , (iv) fair value of common stock of $ 2.98 , and (v) expected

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stock of $ 6.77 , and (v) expected life of 1.9 years.

Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change

Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or changes

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, 2023.

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

months ended September 30, 2023.

Loan and Security Agreements

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The expense of the Final Payment Charge had been recognized over the term of the facility using the effective interest method.

(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.

June 30, 2023 and December 31, 2022, 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.

September 30, 2023 and December 31, 2022, 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

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TLANDO was commercially launched on June 7, 2022.

The Company incurred royalty expense of approximately $ 9,000 and $ 17,000 during the

three months ended June 30, 2023 and 2022, respectively and royalty expense of approximately $ 13,000 and $ 17,000 during the six months

ended June 30, 2023 and 2022, respectively.

The Company incurred royalty expense of approximately $ 9,000 and $ 0 during the three

months ended September 30, 2023 and 2022, respectively, and royalty expense of approximately $ 22,000 and $ 17,000 during the nine months

ended September 30, 2023 and 2022, respectively.

(b) Antares Pharma,

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sales of TLANDO in the United States, subject to certain minimum royalty obligations.

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

On October 2, 2023, the Company received notice

from Antares of Antares’ termination of the License Agreement.

In accordance with the terms of the License Agreement, the License

Agreement will terminate effective January 31, 2024.

Upon termination of the License Agreement, all rights and licenses granted by the

Company to Antares under the License Agreement will terminate and all rights in TLANDO will revert to the Company.

While the Company

plans to seek a commercialization partner for TLANDO, there can be no guarantee that the Company will be able to enter into such a transaction

on terms favorable to the Company or at all.

Company retained 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 also purchased certain existing inventory of licensed product from the Company.

pursuant to the terms of the Antares License Agreement, Antares is generally responsible for expenses relating to the development (including

pursuant to the terms of the Antares License Agreement, Antares was generally responsible for expenses relating to the development (including

the conduct of any clinical trials) and commercialization of TLANDO in the Field in the United States, while the Company is generally

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Halozyme with and into Antares, with Antares continuing as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.

Company did not recognize any revenue under the Antares Licensing Agreement during the three or six months ended June 30, 2023 or 2022.

Company recognized a revenue reversal of variable consideration for minimum guaranteed royalties of approximately $ 3.1 million under

the Antares License Agreement during the three and nine months ended September 30, 2023.

The Company recognized revenue of $ 0 and

$ 500,000 for the three and nine months ended September 30, 2022.

The revenue recognized in 2022 related to the non-refundable cash

fee for extending Antares’ option to license TLANDO XR to June 30, 2022.

Research and Development

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

development work on behalf of the Company as well as a number of independent contractors and primarily clinical researchers who serve

as advisors to the Company.

The Company incurred expenses of $ 1.7 million and $ 2.1 million, respectively, for the three months ended

June 30, 2023 and 2022 and $ 3.8 million and $ 3.2 million, respectively, for the six months ended June 30, 2023 and 2022 under these agreements

and has recorded these expenses in research and development expenses.

Company has entered into agreements with various contract organizations that conduct pre-clinical, clinical, analytical and

manufacturing development work on behalf of the Company as well as a number of independent contractors and primarily clinical

researchers who serve as advisors to the Company.

The Company incurred expenses of $ 2.1 million and $ 1.4 million, respectively, for

the three months ended September 30, 2023 and 2022 and $ 5.9 million and $ 4.6 million, respectively, for the nine months ended

September 30, 2023 and 2022 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.

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has been extended through February 28, 2024.

minimum lease payments under the non-cancelable operating lease as of June 30, 2023 are:

of Future Minimum Rental Payments for Operating Leases

minimum lease payments under the non-cancelable operating lease as of September 30, 2023 are:

of Future Minimum Lease Payments for Operating Leases

Year ending December 31:

Total minimum lease payments

Company’s rent expense was $ 89,000 and $ 86,000 for the three months ended June 30, 2023 and 2022, respectively.

Company’s rent expense was $ 89,000 and $ 86,000 for the three months ended September 30, 2023 and 2022, respectively.

The Company’s

rent expense was $ 176,000 and $ 170,000 for the six months ended June 30, 2023 and 2022, respectively.

rent expense was approximately $ 266,000 and $ 256,000 for the nine months ended September 30, 2023 and 2022, respectively.

Stockholders’ Equity

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

of June 30, 2023, the Company had sold an aggregate of 883,711

shares at a weighted-average sales price of $ 37.23

per share under the At the Market Offering (the “ATM Offering”) for aggregate gross proceeds of $ 32.9

million and net proceeds of $ 31.7

of September 30, 2023, the Company had sold an aggregate of 964,711 shares at a weighted-average sales price of $ 34.52 per share under

the At the Market Offering ( the “ATM Offering”) for aggregate gross proceeds of $ 33.3 million and net proceeds of $ 32.1

million, after deducting sales agent commission and discounts and our other offering costs.

During the three and six months ended

June 30, 2023, and 2022, the Company did not sell any shares of its common stock pursuant to the Sales Agreement.

As of June 30,

2023, the Company had $ 41.2

million available for sale under the Sales Agreement.

However, as of April 3, 2023, the Company is now subject to General

Instruction I.B.6 of Form S-3 which limits the amounts that we may sell under the registration statement.

As a result of such

limitations, the Company has currently registered the offer and sale of shares of the Company’s common stock pursuant to the

Sales Agreement having an aggregate offering price of up to $ 15.7

During the three and nine months ended September

30, 2023, the Company sold 81,000 shares of its common stock pursuant to the ATM Offering at a weighted-average sales price of $ 5.36

per share, resulting in net proceeds of approximately $ 410,000 under the Sales Agreement which is net of approximately $ 24,000 in expenses.

During the three and nine months ended September 30, 2022, the Company did not sell any shares of its common stock pursuant to the ATM

As of September 30, 2023, the Company had $ 40.8 million available for sale under the Sales Agreement.

However, as of April

3, 2023, the Company is now subject to General Instruction I.B.6 of Form S-3 which limits the amounts that we may sell under the registration

As a result of such limitations, the Company has currently registered the offer and sale of shares of the Company’s

common stock pursuant to the Sales Agreement having an aggregate offering price of up to $ 15.7 million.

B Preferred Stock

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Redemption”).

As of June 30, 2023, all shares of Series B Preferred Stock have been redeemed by the Company.

As of June 30, 2023, all shares of Series B Preferred Stock had been redeemed by the Company.

“beneficial owner” (as such terms are defined in the Certificate of Designation with respect to the Series B Preferred Stock)

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As of June 30, 2023, all shares of Series B Preferred

Stock have been redeemed by the Company.

Stock had been redeemed by the Company.

foregoing description of the Series B Preferred Stock does not purport to be complete and is qualified in its entirety by reference to

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

(d) Share-Based

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 $ 165,000 and $ 140,000 , for the three months ended June 30, 2023 and 2022, respectively,

and approximately $ 343,000 and $ 311,000 , for the six months ended June 30, 2023 and 2022, respectively, and is allocated as follows:

operations amounted to approximately $ 158,000 and $ 160,000 , respectively, for the three months ended September 30, 2023 and 2022, and

approximately $ 501,000 and $ 471,000 , for the nine months ended September 30, 2023 and 2022, respectively, and is allocated as follows:

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

General and administrative

Company issued 8,820 and 26,467 stock options, respectively, during the three and six months ended June 30, 2023, and issued 10,086 and

29,643 stock options during the three and six months ended June 30, 2022.

Company issued 0 and 26,467 stock options, respectively, during the three and nine months ended September 30, 2023, and issued 1,587

and 31,230 stock options during the three and nine months ended September 30, 2022.

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, 2023 and 2022, 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, 2023 and 2022, the Company calculated the fair value of each option grant

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

of Key Assumption of Fair Value of Stock Options Granted

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in future periods.

of June 30, 2023, there was approximately $ 766,000

of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s

stock option plan.

That cost is expected to be recognized over a weighted average period of 1.64

years and will be adjusted for subsequent changes in estimated forfeitures.

of September 30, 2023, there was approximately $ 608,000 of total unrecognized compensation cost related to unvested share-based compensation

arrangements granted under the Company’s stock option plan.

That cost is expected to be recognized over a weighted average period

of 1.5 years and will be adjusted for subsequent changes in estimated forfeitures.

April 2014, the Board adopted the 2014 Stock and Incentive Plan (“2014 Plan”) subject to shareholder approval which was received

2 unchanged sentences

stock units, restricted stock and dividend equivalents.

An aggregate of 58,823 shares were authorized for issuance under the 2014 Plan.

Additionally, 15,994 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

74,817 to 145,405 .

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 145,405

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 189,522 to 336,582 .

An aggregate of 58,823

shares were authorized for issuance under the

Additionally, 15,994

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 74,817

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 145,405

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 189,522

The Board, on an option-by-option basis, determines the number of shares, exercise price, term, and vesting period for options granted.

2 unchanged sentences

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

An aggregate of 336,582 shares

of common stock are authorized for issuance under the 2014 Plan, with 46,519 shares remaining available for grant as of June 30, 2023.

An aggregate of 336,582

shares of common stock are authorized for issuance

under the 2014 Plan, with 46,600

shares remaining available for grant as of September

summary of stock option activity is as follows:

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Outstanding stock options

Weighted average

exercise price

Number of shares

Weighted average exercise price

Balance at December 31, 2022

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Options cancelled

Balance at June 30, 2023

Options exercisable at June 30, 2023

following table summarizes information about stock options outstanding and exercisable at June 30, 2023:

Balance at September 30, 2023

Options exercisable at September 30, 2023

following table summarizes information about stock options outstanding and exercisable at September 30, 2023:

of Share-based Compensation of Stock Options Outstanding and Exercisable

1 unchanged sentence

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

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

and 12 stock options exercised during the three months ended June 30, 2023 and 2022, respectively.

There were 0 and 12,261 stock options

exercised during the six months ended June 30, 2023 and 2022, respectively.

and 686 stock options exercised during the three months ended September 30, 2023 and 2022, respectively.

There were 0 and 12,947 stock

options exercised during the nine months ended September 30, 2023 and 2022, respectively.

Stock Warrants

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upon a fundamental transaction.

of June 30, 2023, the Company had 64,362 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, 2023 and on December 31, 2022 was determined using the Black-Scholes

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

June 30, 2023

of September 30, 2023, the Company had 64,362 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, 2023 and on December 31, 2022 was determined using

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

September 30, 2023

December 31, 2022

2 unchanged sentences

Dividend yield

the three and six months ended June 30, 2023, the Company recorded non-cash gains of approximately $ 27,000 and $ 126,000 , respectively,

the three and nine months ended September 30, 2023, the Company recorded non-cash gains of approximately $ 75,000 and 200,000 , respectively,

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

During the three and six months ended June 30, 2022, the Company

recorded a non-cash gain of approximately $ 583,000 and $ 205,000 , respectively, from the change in fair value on the November 2019 Offering

During the three and nine months ended September 30, 2022, the

Company recorded a non-cash gain of approximately $ 326,000 and $ 532,000 , respectively, from the change in fair value on the November

2019 Offering warrants.

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

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Change in fair value of common stock warrants

Balance at June 30, 2023

Balance at September 30, 2023

Additionally,

2 unchanged sentences

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

As of June 30, 2023, and 2022, there

were 49,433 warrants outstanding that were issued in the February 2020 Offering.

As of September 30, 2023, and 2022,

there were 49,433 warrants outstanding that were issued in the February 2020 Offering.

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

Exercise Price

Weighted Average Exercise Price

Outstanding at December 31, 2022

Balance at June 30, 2023

were no common stock warrants exercised during either the three or six months ended June 30, 2023 and 2022.

following table summarizes information about common stock warrants outstanding at June 30, 2023:

Balance at September 30, 2023

were no common stock warrants exercised during either the three or nine months ended September 30, 2023 and 2022.

following table summarizes information about common stock warrants outstanding at September 30, 2023:

Schedule of Common Stock Warrants Outstanding

1 unchanged sentence

Number exercisable

Weighted average

contractual life

Weighted average

exercise price

Aggregate intrinsic

Weighted average remaining contractual life (Years)

Weighted average exercise price

Aggregate intrinsic value

Commitments and Contingencies

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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.

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.

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

exchange, the Company will receive a royalty of 20

percent of the net proceeds received by Spriaso, up to a maximum of $ 10.0

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

the cough and cold field.

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

agreement to provide services expired in 2021;

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.

Additionally, during the three months and six months ended June 30, 2023, the Company received licensing revenue from Spriaso of

approximately $ 0

and $ 55,000 ,

Additionally, during

the three months and nine months ended September 30, 2023, the Company received licensing revenue from Spriaso of approximately $ 0 and

$ 55,000 , respectively.

During each of the three and six months ended June 30, 2022, the Company received licensing revenue of $ 0 .

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

During each of the three and nine months ended September 30, 2022, the Company received licensing revenue of $ 0 .

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.

Subsequent Events

October 2, 2023, the Company received notice from Antares of Antares’ termination of the License Agreement.

In accordance with

the terms of the License Agreement, the License Agreement will terminate effective January 31, 2024.

Upon termination of the License

Agreement, all rights and licenses granted by the Company to Antares under the License Agreement will terminate and all rights in TLANDO

will revert to the Company.

While the Company plans to seek a commercialization partner for TLANDO, there can be no guarantee that the

Company will be able to enter into such a transaction on terms favorable to the Company or at all.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed

consolidated financial statements and the related notes thereto and other financial information included elsewhere in this report.

additional context with which to understand our financial condition and results of operations, see the management’s discussion

and analysis included in our Form 10-K, filed with the SEC on March 10, 2023, our first quarter Form 10-Q filed with the SEC on May 11,

2023, our second quarter Form 10-Q filed with the SEC on August 10, 2023, as well as the financial statements and related notes contained

used in the discussion below, “we,” “our,” and “us” refers to Lipocine.

Forward-Looking

section and other parts of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of

1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties.

Forward-looking

statements provide current expectations of future events based on certain assumptions and include any statement that does not directly

relate to any historical or current fact.

Forward-looking statements may refer to such matters as products, product benefits, pre-clinical

and clinical development timelines, clinical and regulatory expectations and plans, expected responses to regulatory actions, anticipated

financial performance, future revenues or earnings, business prospects, projected ventures, new products and services, anticipated market

performance, expected research and development and other expenses, future expectations for liquidity and capital resources needs and

similar matters.

Such words as “may”, “will”, “expect”, “continue”, “estimate”,

“project”, and “intend” and similar terms and expressions are intended to identify forward looking statements.

Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results

discussed in the forward-looking statements.

Factors that might cause such differences include, but are not limited to, those discussed

in Part II, Item 1A (Risk Factors) of this Form 10-Q, or in Part II, Item 1A (Risk Factors) of our Form 10-Q for the quarter ended June

30, 2023 filed with the SEC on August 10, 2023, Form 10-Q for the quarter ended March 31, 2023 filed with the SEC on May 11, 2023, or

in Part I, Item 1A (Risk Factors) of our Form 10-K filed with the SEC on March 10, 2023.

Except as required by applicable law, we assume

no obligation to revise or update any forward-looking statements for any reason.

of Our Business

are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through

the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders.

Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.

Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs.

We have a portfolio of differentiated

innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone

supplementation for men and women.

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

or our “Licensee”) for the development and commercialization of our product candidate, TLANDO®, an oral testosterone

replacement therapy (“TRT”) comprised of testosterone undecanoate (“TU”), pursuant to which we granted to Antares

an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize the TLANDO product for TRT in the U.S.

is a registered trademark assigned to Antares.

On October 2, 2023, the Company received notice from Antares of Antares’ termination

of the License Agreement, effective January 31, 2024.

All rights and licenses granted by the Company to Antares will terminate and all

rights in TLANDO will revert to us.

While we plan to seek a commercialization partner for TLANDO, there can be no guarantee that the

Company will be able to enter into such a transaction on terms favorable to us or at all.

Any FDA required post-marketing studies which

were the responsibility of our Licensee will revert to us or a new licensee after the termination of the License Agreement.

28, 2022, Antares received approval from the FDA for TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous

testosterone, also known as hypogonadism.

On May 24, 2022, Halozyme Therapeutics completed an acquisition of Antares Pharma Inc.

a merger of a wholly owned subsidiary of Halozyme with and into Antares, with Antares continuing as the surviving corporation and becoming

a wholly owned subsidiary of Halozyme.

On June 7, 2022, Halozyme announced the commercial launch of TLANDO, an oral treatment indicated

for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone

(primary or hypogonadotropic hypogonadism).

clinical development pipeline candidates include:

LPCN 1154 for postpartum depression (“PPD”);

LPCN 2101 for epilepsy;

LPCN 1148 comprising a novel prodrug of testosterone, testosterone laurate (“TL”), for the management of decompensated cirrhosis.

In addition to our CNS product candidates, we have assets for which we expect to seek partnerships to enable further development including

LPCN 1144, an oral prodrug of androgen receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”)

which has completed Phase 2 testing;

LPCN 1111, a next generation oral TRT product comprised of testosterone tridecanoate (“TT”)

with the potential for once daily dosing which has completed Phase 2 testing;

and LPCN 1107, potentially the first oral hydroxy progesterone

caproate (“HPC”) product indicated for the prevention of recurrent preterm birth (“PTB”), which has completed

a dose finding clinical study in pregnant women and has been granted orphan drug designation by the FDA.

following charts summarize the status of our product candidate development and partnering programs:

goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip’ral drug delivery technology platform

to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders.

The key components

of our strategy are to:

LPCN 1154 and other CNS product candidates.

We intend to focus on the development of endogenous neuroactive steroids (“NAS”)

which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated

oral therapeutics.

Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”)

with potential for outpatient use.

partnership(s) to continue the advancement of non-core pipeline assets .

We continuously strive to prioritize our resources in seeking

partnerships for our pipeline assets.

In addition to seeking a U.S.

commercialization partner for TLANDO, we are currently exploring

partnering (i) LPCN 1144, our candidate for treatment of non-cirrhotic NASH, (ii) LPCN 1148, for the management of decompensated cirrhosis,

(iii) LPCN 1111, a once-a-day therapy candidate for TRT, and (iv) LPCN 1107, our candidate for prevention of pre-term birth.

exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States, although

no licensing agreement has been entered into by the Company.

Development Pipeline Product Candidates

pipeline of clinical development candidates includes LPCN 1154 for PPD, LPCN 2101 for epilepsy, and LPCN 1148, an androgen therapy for

the management of cirrhosis.

We will continue to explore other product development candidates targeting CNS indications with a significant

We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN

1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the United States.

products are based on our proprietary Lip’ral drug delivery technology platform.

The FDA approved Lip’ral-based TLANDO in

Lip’ral technology is a patented technology based on lipidic compositions which form an optimal dispersed phase in

the gastrointestinal environment for improved absorption of insoluble drugs.

The drug loaded dispersed phase presents the solubilized

drug efficiently at the absorption site (gastrointestinal tract membrane) thus improving the absorption process and making the drug less

dependent on physiological variables such as dilution, gastro-intestinal pH and food effects for absorption.

Lip’ral-based formulation

enables improved solubilization and higher drug-loading capacity, which can lead to improved bioavailability, reduced dose, faster and

more consistent absorption, reduced variability, reduced sensitivity to food effects, improved patient compliance, and targeted lymphatic

delivery where appropriate.

Programs for CNS Disorders

preferred endogenous or naturally occurring NAS present in central nervous system act as positive allosteric modulators (“PAM”)

of the GABA A receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (“GABA A” ).

To improve oral delivery of these modulators, several synthetic NAS derivatives of endogenous GABA A receptor PAMs have been

developed for therapeutic use in the past few decades.

believe through utilization of our proprietary technology we may have the ability to enable effective oral delivery of endogenous GABA A

receptor PAMs which historically had been deemed to be not orally bioavailable.

As a novel drug class, NAS have received considerable

attention because of their potential to treat various neuropsychiatric conditions including depression, movement disorders, epilepsy,

anxiety, and neurodegenerative diseases.

We have conducted Phase 1 pharmacokinetic (“PK”) studies for each of our two lead

NAS candidates which have demonstrated promising PK results, safety, and tolerability and we are evaluating additional undisclosed CNS-focused

Product Candidate for PPD

most advanced NAS candidate is LPCN 1154, a rapid onset, oral formulation of the neuroactive steroid brexanolone which we are

developing for the treatment of PPD.

The FDA recently agreed with our proposal for establishing the efficacy of LPCN 1154 through a

pivotal PK bridge to an approved IV infusion brexanolone via a 505(b)(2) NDA filing.

Based on feedback from the FDA, the company

conducted a pilot PK bridge study of LPCN 1154, a prelude to a pivotal study required for NDA filing, and released positive topline

results from the pilot PK bridge study in May of 2023.

Results from the pilot PK study will enable identification of the dosing

regimen to be used in a single confirmatory pivotal PK study to establish efficacy for PPD and support NDA submission.

18, 2023, we met with the FDA and the FDA agreed with our proposal for a 505(b)(2) NDA filing based on a single pivotal PK study

comparing exposure of LPCN 1154 with the approved IV infusion of brexanolone.

We anticipate initiating the pivotal PK study in the

first quarter of 2024 and expect to have top line results in the second quarter of 2024.

We have previously completed an oral PK

study and a food effect study with LPCN 1154.

a type of major depressive disorder with onset either during pregnancy or within four weeks of delivery, refers to depression persisting

up to 12 months after childbirth.

PPD can be clinically segmented by the severity of symptoms and presence of a comorbidity, including

Approximately 1 in 8 mothers suffers from PPD in the United States alone;

this equates to approximately 500,000 women being

affected by PPD annually.

Overview - PPD

is distinct from the “baby blues,” a condition that up to 70% of all new mother’s experience;

tend to be short-lived emotional conditions that do not interfere with daily activities.

of PPD include hallmarks of major depression, including, but not limited to, sadness, depressed mood, loss of interest, change in appetite,

insomnia, sleeping too much, fatigue, difficulty thinking/concentrating, excessive crying, fear of harming the baby/oneself, and/or

thoughts of death or suicide.

pregnancy, levels of endogenous NAS increase considerably along with levels of progesterone;

however, they drop sharply postpartum.

It has been hypothesized that the rapid perinatal decrease in circulating levels of endogenous NASs may be involved in the development

The first approved treatment option for PPD is an injectable containing endogenous NAS.

may persist long after child delivery.

Additionally, approximately 40% of women relapse in subsequent pregnancies or on other occasions.

comorbidities are common in patients with epilepsy.

Patients with epilepsy are at high risk for major depressive disorders and PPD.

Reported PPD rates are higher among women with epilepsy than the general population.

family history and/or previous experience of depression or other mood disorders

● Physiological:

rapid changes in sex hormones, stress hormones, and thyroid hormone levels during and after

● Environmental:

stressful life events, changes in relationships at home and at work, and/or lack of familial

believe there is considerable unmet need within women with PPD due to lack of convenient and fast-acting oral therapies.

Selective Serotonin

Reuptake Inhibitors (“SSRIs”) have been the traditional first-line therapy choice for women with severe PPD and require weeks

for onset of efficacy;

therefore, a need for an oral treatment option with a faster onset of action remains a significant unmet need

in treating PPD, especially in women with epilepsy risk wherein psychiatric comorbidity is common and PPD rates are higher than the general

brexanolone (Zulresso™, Sage Therapeutics) became the first FDA-approved treatment for postpartum depression.

However, numerous

factors limit the utilization of injectable brexanolone such as method of administration, cost, and safety concerns.

Administration of

injectable brexanolone requires a 60-hour continuous infusion in a supervised medical setting, a demanding ask for a mother with a newborn.

Besides associated privacy concerns and social stigma, inpatient treatment may also require separation of the mother and child for a

few days, which may be difficult to the already strained mother-infant bond and may present breast feeding challenges.

Moreover, the

pharmacotherapy costs coupled with inpatient treatment/childcare costs limits its accessibility and affordability to women most in need

of the therapy.

Finally, due to concerns about the safety of injectable Zulresso including excessive sedation or loss of consciousness,

Zulresso has a Black Box Warning in its label and is only available through a restricted distribution program (“REMS”), and

sites need significant time to become treatment ready.

Additionally, on August 4, 2023, Sage Therapeutics, Inc.

and Biogen, Inc.

FDA approval of Zurzuvae™ (zuranolone), as an oral treatment for women with postpartum depression and stated that Zurzuvae is expected

to launch and be commercially available in the fourth quarter of 2023 following scheduling as a controlled substance by the U.S.

Enforcement Administration which they expect within 90 days of FDA approval.

believe LPCN 1154 targets the current unmet need for a convenient oral treatment candidate with faster onset of action and rapid relief.

NAS for Epilepsy

are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”).

We have completed pre-clinical

and Phase 1 studies for LPCN 2101 which demonstrated promising PK results, safety and tolerability.

In July 2022 our IND was accepted

by the FDA for LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the

safety, tolerability, and efficacy of LPCN 2101, subject to the availability of additional resources.

Overview – Epilepsy

is defined by the 1) occurrence of at least two unprovoked seizures more than 24 hours apart, 2) occurrence of one unprovoked seizure

and a probability of further seizures occurring over the next 10 years, and/or 3) diagnosis of an epilepsy syndrome.

Patients with epilepsy

are more likely to be comorbid with other conditions, including depression and anxiety.

with epilepsy have increased risk of mortality due to direct effects of seizures (e.g., status epilepticus, car accidents) and indirect

effects of seizures (e.g., suicide, cardiovascular effects.)

is a disorder of the brain that causes seizures, affecting the physical, mental, and social well-being of persons, and is associated

with a 2 to 3 times greater mortality rate compared with the general population.

About 60-65% of epilepsy is idiopathic and about 30%

of patients are refractory (i.e., epilepsy not well managed with currently available Anti-Seizure Medications (“ASMs”).

is the most common neurological disorder during pregnancy.

is estimated that approximately 900,000 childbearing (“CB”) age women suffer from active epilepsy in the U.S.

age with epilepsy face many additional challenges due to hormonal influences on seizure activity and endocrine function throughout the

different phases of their reproductive cycles.

Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency.

these women experience hormonal and endogenous NAS imbalances, coupled with fluctuations in the blood levels of ASMs that impact control

of seizures, efficacy of oral contraceptives, any coexisting anxiety and/or depression and any associated sleep impairment.

patients are 5-20 times more likely to develop depression.

segmentation can be categorized by epilepsy type, comorbidities and patient subgroups.

Categorization of focal epilepsy, generalized

epilepsy, combined focal and generalized epilepsy, and unknown epilepsy can guide the choice of ASM.

Special patient subgroups, including

WWE of CB age and elderly patients, require special care and management of epilepsy.

Comorbidities such as depression and anxiety may

be co-treated with therapies that do not aggravate seizures and have no drug interaction with the ASM used for epilepsy.

effective dose and monotherapy are preferred, management of patients with epilepsy is focused on controlling seizures, avoiding adverse

events, and maintaining quality of life.

Despite a wide range of ASMs available, about 30% of all people with epilepsy still fail to

respond to treatment effectively.

Women with epilepsy face specific challenges throughout their lifespan because of seizures, ASMs, and

hormonal fluctuations.

with epilepsy were once counseled to avoid pregnancy, but epilepsy is no longer considered a contraindication to pregnancy.

for WWE in the preconception phase either intending to start a family (planning pregnancy) or using contraception to prevent an unplanned

pregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of ASMs and ASM-related risks

such as, among other risks, fetal-neonatal toxicity, contraception failure, and psychiatric side effects.

ASMs are known to have teratogenic effects on the developing fetus (converging evidence from registry studies indicates that teratogenic

risks are highest with valproate, followed by carbamazepine and topiramate).

Other commonly prescribed ASMs, including older generation

agents, such as phenobarbital and phenytoin, have been associated with higher risks as compared with lamotrigine, levetiracetam, clonazepam

and gabapentin (Vajda et al., 2014;

Voinescu and Pennell, 2015).

Moreover, risks associated with ASMs are considerable early in pregnancy;

therefore, it is necessary that WWE of CB age undergo counseling, monitoring, and adjustment to the most appropriate ASM prior to becoming

It is preferable that WWE of CB age discuss seizure control with their doctor for at least 6 months before conception and,

if possible, cease ASM therapy or use the lowest effective dose of a single anticonvulsant according to the type of epilepsy and the

fetal toxicity of the ASM.

Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women who

are worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned.

ASMs can reduce the efficacy of oral

contraceptives, compounding this problem.

multidirectional interactions between female hormones, seizures, and ASMs exist.

Most hormones act as NAS and can thus modulate brain

excitability.

Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK

interactions that modify the plasma levels of ASMs (Harden, 2008).

The PK interactions between oral contraceptives and ASMs are bidirectional

(Johnston and Crawford, 2014).

The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs.

Epilepsy is not a medical condition in which contraceptives are contraindicated.

Contraceptive failure, possibly related to ASMs, may

be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women.

need to treat WWE in CB age

is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S.

Women of CB age with epilepsy face many

additional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of their

reproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making consideration

of newer pharmacological treatment development options important.

uncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases.

Therefore, uncompromised

ASM efficacy with acceptable variability and less or no drug-drug interactions achieved with lowest possible monotherapy dose to address

fetal toxicity concerns remain highly unmet needs.

Moreover, control of seizures including prevention of breakthrough seizures is critical

when planning for pregnancy and also during pregnancy, as it can also lead to undesired falls or auto-accidents and compromise freedom

ASMs have the potential to induce contraception failures, reproductive hormone imbalance, anxiety, and depression.

There remains an unmet

need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns

as well as potential to treat associated comorbidities.

over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE

We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential

for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment.

Moreover, these

oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE.

S.Bangar et al.

Functional Neurology 2016;

Reimers et al.

Oral Product Candidate for the Management of Decompensated Cirrhosis

are currently evaluating LPCN 1148 comprising testosterone laurate (“TL”) for the management of decompensated cirrhosis.

We believe LPCN 1148 targets unmet needs for cirrhosis subjects including improvement in the quality of life of patients while on the

liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as hepatic encephalopathy

(“HE”), and improvement in post liver transplant survival, including outcomes and costs.

are currently conducting a Phase 2 proof of concept (“POC”) study (NCT04874350) in male subjects with cirrhosis to evaluate

the therapeutic potential of LPCN 1148 for the management of sarcopenia.

The ongoing Phase 2 POC study is a prospective, multi-center,

randomized, placebo-controlled study in male sarcopenic patients with cirrhosis.

Subjects were initially randomized 1:1 to one of two

The treatment arm is an oral dose of LPCN 1148, and the second arm is a matching placebo.

The primary endpoint is change in skeletal

muscle index at week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and number of

waitlist events, including all-cause mortality.

The 24-week placebo-controlled treatment period of the study is currently in the 28-week

open-label extension (OLE) phase of the study where all subjects receive LPCN 1148 for the duration of the study through week 52.

July 2023 we announced that the Phase 2 study met the study primary endpoint, increased skeletal muscle index (L3-SMI) relative to placebo

(P<.01), in patients with cirrhosis.

The study also demonstrated improvements in clinical outcomes such as prevention of new decompensation

events including HE, rates of hospitalizations, and patient reported outcomes (“PROs”).

LPCN 1148 was well-tolerated, with

adverse event (AE) rates and severities similar to placebo and no mortality was noted in the LPCN 1148 treatment group, nor were there

any cases of drug-induced liver injury.

Overview – Cirrhosis

are over 2 million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S.

and nonalcoholic

fatty liver disease is the most rapidly increasing indication for liver transplant.

62% of those on the liver transplant (“LT”)

waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues to increase.

Each year about half

of the approximately 17,000 people in U.S.

on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed

from the list because they were “too sick to transplant.”

cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands.

Patients with cirrhosis typically

have a years-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure move

the patient into the symptomatic phase (decompensated cirrhosis).

Transition to decompensated cirrhosis is marked by clinical events

including ascites, encephalopathy, jaundice, and/or variceal hemorrhage.

Decompensated subjects survive on average less than 2 years.

Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease (“NAFLD”), chronic hepatitis

B and C, primary biliary cirrhosis (“PBC”), and primary sclerosing cholangitis (“PSC”) and some patients have

liver disease of unknown cause (cryptogenic).

complications in patients with cirrhosis may include:

compromised liver function, portal hypertension, varices in GI tract with internal

bleeding, edema, ascites, hepatic encephalopathy, compromised immunity with post-transplant acute rejection risk, high sodium levels,

increased bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle

disorder in the form of sarcopenia, myosteatosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline

phosphatase (“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution,

anemia, sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines,

and infection risk leading to hospital admissions and possibly death.

a significant decompensation event in patients with cirrhosis, is a brain dysfunction caused by liver insufficiency and/or portal systemic

Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such as ammonia are inadequately removed

from systemic circulation and travel to the brain, where they affect neurotransmission.

This can cause episodes of HE, which may present

as alterations in consciousness, cognition, and behavior that range from minimal to severe.

Overt HE occurs in 30% to 40% of patients

with cirrhosis at some point during the clinical course of their disease.

As the burden of chronic liver disease and cirrhosis is increasing,

the frequency of HE is also increasing.

Partnership Pipeline Product Candidates

continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148,

LPCN 1111, LPCN 1107 and TLANDO outside of the U.S.

We do not currently anticipate conducting any further significant development activities

with respect to these products and product candidates without the participation of a partner.

There can be no guarantee that we will

be able to identify or enter into partnering arrangements on terms that are beneficial to us or at all.

Even if we do enter into partnering

arrangements, such arrangements may not be sufficient to successfully develop and commercialize these products.

An Oral Product for Testosterone Replacement Therapy

previously described, under the Antares License Agreement, we granted to Antares an exclusive, royalty-bearing, sublicensable right and

license to develop and commercialize TLANDO, our product for TRT in the U.S.

TLANDO received FDA approval on March 28, 2022.

2022, Halozyme Therapeutics completed an acquisition of Antares Pharma Inc.

through a merger of a wholly owned subsidiary of Halozyme

with and into Antares, with Antares continuing as the surviving corporation and becoming a wholly owned subsidiary of Halozyme.

2, 2023, we received notice from Antares of Antares’ termination of the License Agreement.

In accordance with the terms of the

License Agreement, the License Agreement will terminate effective January 31, 2024.

Upon termination of the License Agreement, all rights

and licenses granted by us to Antares under the License Agreement will terminate and all rights in TLANDO will revert back to us.

we plan to seek a commercialization partner for TLANDO, there can be no guarantee that we will be able to enter into such a transaction

on terms favorable to us or at all.

Proof-of-concept

for TLANDO was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc., which was

then acquired by Abbott Products, Inc.

Following a portfolio review associated with the spin-off of AbbVie Inc.

by Abbott in 2011, the rights to TLANDO were reacquired by us.

All obligations under the prior license agreement have been completed

except that Lipocine will owe Abbott a perpetual 1% royalty on net sales of TLANDO.

Such royalties are limited to $1 million in the first

2 calendar years following product launch, after which period there is no cap on royalties and no maximum aggregate amount.

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

TLANDO was commercially launched on June 7, 2022.

the three and nine months ended September 30, 2023, we incurred royalty expense of approximately $9,000 and $22,000, respectively.

the three and nine months ended September 30, 2022 we incurred royalty expense of approximately $0 and 17,000, respectively.

the Pediatric Research Equity Act (“PREA”), the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric

patients will need to be addressed.

The FDA may also require certain post-marketing studies to be conducted.

Any FDA requirement to conduct

certain post-marketing studies will be our responsibility or the responsibility of a potential commercialization partner.

execution of the Antares License Agreement, Antares paid us an initial payment of $11.0 million.

Antares will also make additional payments

of $5.0 million to us on each of January 1, 2025, and January 1, 2026, provided that certain conditions are satisfied.

We are 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 products licensed by Antares under the Antares License Agreement.

In addition, we 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.

Further, on October 14, 2021, we assigned our Manufacturing Agreement, dated August 27, 2013,

by and between the Company and Encap Drug Delivery (the “Manufacturing Agreement”) to Antares as part of the Antares License

addition to seeking a U.S.

commercialization partner for TLANDO, we are exploring the possibility of licensing LPCN 1021 (known as TLANDO

in the United States) to third parties outside the United States, although no licensing agreement has been entered into by the Company.

If and when an agreement is made with a partner, such arrangement would likely be contingent upon obtaining acceptable cost of goods

in addition to obtaining local regulatory approval.

No assurance can be given that any license agreement will be completed, or, if an

agreement is completed, that such an agreement would be on terms favorable to us.

An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of NASH

are exploring the possibility of partnering LPCN 1144 to a third party, although no partnering agreement has been entered into by the

No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement

would be on terms favorable to us.

Overview – NASH

is a more advanced state of non-alcoholic fatty liver disease (“NAFLD”) and can progress to a cirrhotic liver or liver failure,

require liver transplant, and can result in hepatocellular carcinoma/ liver cancer, and death.

Progression of NASH to end stage liver

disease will soon surpass all other causes of liver failure requiring liver transplantation.

Importantly, beyond these critical conditions,

NASH and NAFLD patients additionally suffer heightened cardiovascular risk and, in fact, die more frequently from cardiovascular events

than from liver disease.

NAFLD/NASH is becoming more common due to its strong correlation with obesity and metabolic syndrome, including

components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure.

In the U.S., 20% to 30% of the population

is estimated to suffer from NAFLD and 15% to 20% of this group progress to NASH, which is a substantially large population that lacks

an effective therapy.

NASH is a silent killer that affects millions in the U.S.

Diagnoses have been on the rise and are expected to increase

dramatically in the next decade.

Approximately 50% of NASH patients are adult males.

In men, especially with comorbidities associated

with NAFLD/NASH, testosterone deficiency has been associated with an increased accumulation of visceral adipose tissue and insulin resistance,

which could be factors contributing to NAFLD/NASH.

There is currently no approved therapy for the treatment of NASH although there are

several drug candidates currently under development with many having clinical failures to date.

critical pathophysiologic mechanisms underlying the development and progression of NASH include reduced ability to handle lipids, increased

insulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury.

NASH patients have an excessive accumulation

of fat in the liver resulting primarily from a caloric intake above and beyond energy needs.

A healthy liver contains less than 5% fat,

but a liver in someone with NASH can contain more than 20% fat.

This abnormal liver fat contributes to the progression to NASH, a liver

necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure.

have completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects.

The LiFT clinical study

was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal and

eugonadal male NASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score ≥ 4 with a 36-week treatment period.

LiFT clinical study enrolled 56 biopsy confirmed NASH male subjects.

Subjects were randomized 1:1:1 to one of three arms (Treatment

A was a twice daily oral dose of 142 mg testosterone equivalent, Treatment B was a twice daily oral dose of 142 mg testosterone equivalent

formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm was a twice daily matching placebo).

primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker end

points post 12 weeks of treatment.

Additionally, key secondary endpoints post 36 weeks of treatment included assessment of histological

change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF).

The LiFT clinical study

was not powered to assess statistical significance of any of the secondary endpoints.

Other important endpoints included the following:

change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and inflammatory/fibrosis markers;

patient reported outcomes.

with LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, and

showed improvement of liver injury markers with no observed tolerability issues.

biopsies were performed at baseline (“BL”) and after 36 weeks of treatment (“EOS”).

Prespecified biopsy analyses

included NASH Clinical Research Network (“CRN”) scoring as well as a continuous paired (“Paired Technique”) and

digital technique (“Digital Technique-Fibronest”).

All biopsy analyses were performed on the same slides and the reads for

the three techniques were done independently.

Analysis sets included the NASH Resolution Set (all subjects that have BL and EOS biopsy

with NASH at BL [NAS ≥4 with lobular inflammation score ≥ 1 and hepatocyte ballooning score ≥1 at BL] (n=37)), the Biopsy Set

(all subjects with baseline and EOS biopsies (n=44)), and the Safety Set (all randomized subjects (n=56)).

LPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of NASH resolution

with no worsening of fibrosis based on NASH CRN scoring.

Additionally, both treatment arms showed substantial improvement of the observed

NASH activity in steatosis, inflammation, and ballooning.

the 36 weeks of treatment, LPCN 1144 was well tolerated with an overall safety profile comparable to placebo.

Additionally, subjects

were given the option to have access to LPCN 1144 through an open label extension (“OLE”) study.

The extension study enabled

the collection of additional data on LPCN 1144 for up to a total of 72 weeks of therapy, as well as data for 36 weeks of therapy for

those subjects on placebo in the LiFT study.

Key results from the OLE study are as follows:

1144 was well tolerated over 72-week exposure with no observed safety signals;

injury markers were reduced and maintained with extended LPCN 1144 treatment;

liver histology improvements support further development.

November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic NASH.

The Fast Track program is designed

to accelerate the development and expedite the review of products, such as LPCN 1144, which are intended to treat serious diseases and

for which there is an unmet medical need.

had a written only response from the FDA for a LPCN 1144 Type C meeting with the FDA in January 2022 to discuss the development path

forward with LPCN 1144.

The FDA acknowledged that the NDA submission of LPCN 1144 would be via 505(b)2 regulatory pathway and agreed

that no additional non-clinical studies are needed to support an NDA submission.

The FDA acknowledged that in the LiFT study subjects

achieved improvements in key components associated with NASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males

and agreed that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval

The FDA agreed that the proposed primary multicomponent surrogate endpoint, NASH resolution with no worsening of fibrosis, is

acceptable for seeking approval under the accelerated approval pathway and the FDA recommended a Phase 3 trial with a study duration

In July 2022, Lipocine held an End of Phase 2 meeting with FDA for LPCN 1144 in NASH.

The FDA recommended a Phase 2 dose

ranging study be conducted to identify the optimal dose prior to conducting a pivotal study.

The FDA agreed to the proposed unique testosterone

ester, testosterone laurate, for future clinical studies.

A Next-Generation Long-Acting Oral Product Candidate for TRT

have commenced the process of scaling up the manufacturing process and generation of supplies of LPCN 1111 to enable potential partners

to conduct pivotal studies for registration.

We are exploring the possibility of partnering LPCN 1111 with a third party, although no

partnering agreement has been entered into by the Company.

No assurance can be given that any license agreement will be completed, or,

if an agreement is completed, that such an agreement would be on terms favorable to us.

1111 is a next-generation, novel ester prodrug of testosterone comprised of testosterone tridecanoate (“TT”) which uses our

proprietary delivery technology to enhance solubility and improve systemic absorption.

We completed a Phase 2b dose finding study in

hypogonadal men in the third quarter of 2016.

The primary objectives of the Phase 2b clinical study were to determine the starting Phase

3 dose of LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single and multiple

doses in hypogonadal men.

Good dose-response relationship was observed over the tested dose range in the Phase 2b study.

Additionally,

the target Phase 3 dose met primary and secondary end points.

Overall, LPCN 1111 was well tolerated with no drug-related severe or serious

adverse events reported in the Phase 2b study.

February 2018 we had a meeting with the FDA to discuss these pre-clinical results and to discuss the Phase 3 clinical study and path

forward for LPCN 1111.

Based on the results of the FDA meeting and additional pre-clinical studies conducted after the FDA meeting, we

have proposed a Phase 3 protocol for LPCN 1111 and have solicited FDA feedback.

Based on initial FDA feedback, we expect the Phase 3

clinical trial design to follow the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use

(“ICH”) guidelines and we expect the trial will include at least a 3-month efficacy treatment period and a 1-year safety

component for approximately 100 subjects.

We are currently seeking further clarification from FDA with respect to the total subject LPCN

1111 exposure information needed for an NDA filing.

We continue to refine the Phase 3 protocol and plan to request FDA approval of the

protocol once it is finalized.

Additionally, the FDA previously requested that a food effect and a phlebotomy study be completed, and

that ambulatory blood pressure monitoring (“ABPM”) be included as part of the Phase 3 clinical study.

We are currently transferring

the manufacturing of LPCN 1111 to a third-party contract manufacturer and scaling up the formulation after which we anticipate the next

steps for a partner developing LPCN 1111 may be to conduct a food effect/phlebotomy study with LPCN 1111.

Under the terms of the Antares

License Agreement, Antares had been granted an option to license LPCN 1111, exercisable on or before March 31, 2022, for further development

and, should LPCN 1111 receive FDA approval, commercialization.

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 was to exercise its option to license LPCN 1111 to June 30, 2022.

As consideration for the Company’s agreement to the Amendment,

Antares paid the Company a non-refundable cash fee of $500,000 in April 2022.

On June 30, 2022, Antares’ option to license LPCN

1111 expired and was not exercised.

An Oral Product Candidate for the Prevention of Preterm Birth

are exploring the possibility of partnering LPCN 1107 to a third party, although no partnering agreement has been entered into by the

No assurance can be given that any partnership agreement will be completed, or, if an agreement is completed, that such an agreement

would be on terms favorable to us.

believe LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate (“HPC”) product indicated for the

reduction of risk of PTB (delivery less than 37 weeks) in women with singleton pregnancy who have a history of singleton spontaneous

Prevention of PTB is a significant unmet need as approximately 11% of all U.S.

pregnancies result in PTB, a leading cause of neonatal

mortality and morbidity.

have completed a multi-dose PK dose selection study in pregnant women.

The objective of the multi-dose PK selection study was to assess

HPC blood levels in order to identify the appropriate LPCN 1107 Phase 3 dose.

The multi-dose PK dose selection study was an open-label,

4-period, 4-treatment, randomized, single and multiple dose PK study in pregnant women with 3 dose levels of LPCN 1107 and the IM HPC

The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately 16 to 19

Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner during

the first 3 treatment periods and then received 5 weekly injections of HPC during the fourth treatment period.

During each of the LPCN

1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day

Following completion of the 3 LPCN 1107 treatment periods and a washout period, all subjects received 5 weekly injections of HPC.

Results from this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for all 3 LPCN 1107 doses

than for injectable HPC.

Additionally, HPC levels as a function of daily dose were linear for the 3 LPCN 1107 doses.

Also, unlike the

injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days.

traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into

Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetings

with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107.

However, these discussions may be updated based on recent

developments with Covis’ Makena® as described below.

We have completed a food effect study to characterize the dosing regimen

for the pivotal study and we have submitted a pivotal clinical study protocol to the FDA.

FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care.

Orphan designation qualifies Lipocine

for various development incentives, including tax credits for qualified clinical testing, and a waiver of the prescription drug user

fee when we file our NDA.

Competition Update

October 5, 2020, the FDA’s Center for Drug Evaluation and Research (“CDER”) proposed that Makena be withdrawn from

the market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence does not

show Makena is effective for its approved use.

CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing (“NOOH”) to withdraw approval

of Makena, for which AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company’s position, recognizing

clinicians’ decade-long use of treatment with Makena and the public health implications of withdrawing approval.

The FDA Commissioner

held a public hearing with Covis from October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product

from the market.

On October 31, 2022, Covis approached the CDER and outlined a plan of orderly withdrawal which would set a withdrawal

timeframe sufficient for current patients to complete their courses of treatment.

The CDER declined this proposal.

On March 6, 2023,

Covis announced its plan to voluntarily withdraw Makena from the market and submitted a request to the CDER for a minimum 21-week wind-down.

On April 6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic

versions of the drug, making it unlawful for the drug to be distributed in the US.

The FDA stated that in light of the unmet need for

a treatment for preventing preterm birth and improving neonatal outcomes, it is imperative that the medical and scientific communities

increase their efforts to find effective treatments and stated their hope that the decision to withdraw Makena will help galvanize further

The FDA further stated their commitment to working together with patients, researchers, and drug developers to advance the

development of safe and effective therapies that are urgently needed as a treatment for the prevention of preterm birth.

Operations Overview

date, we have not generated any revenues from product sales and do not expect to generate revenue other than TLANDO royalties and

licensing fees until one of our product candidates receives approval from the FDA.

Revenues to date have been generated

substantially from license fees, royalty and milestone payments and research support from our licensees.

Since our inception through

September 30, 2023, we have generated $41.7 million in revenue under our various license and collaboration arrangements and from

government grants.

Based on the terms of the Antares License Agreement, in the fourth quarter of 2021 we recorded $4.1 million in

revenue and an associated contract asset for future contractual minimum royalties.

We reduced our contract asset by $218,000 in 2022

due to a royalty payment received from Antares under the terms of our license agreement, based on net sales of TLANDO in 2022.

received a payment of approximately $772,000 in the third quarter of 2023 in accordance with the terms of the license agreement, of

which approximately $580,000 was applied to the contract asset and $192,000 was applied to imputed interest receivable.

2, 2023, we received notice from Antares of Antares’ termination of the License Agreement effective January 31, 2024.

the termination notice, we recorded a non-cash reduction of revenue related to the reversal of variable consideration revenue for

minimum guaranteed royalties of $3.1 million for the balance of the contract asset, which is the contract asset balance which would

have remained after the anticipated fourth quarter royalty payment of approximately $131,000, based on net sales in the third

quarter of 2023.

As a result of the termination of the License Agreement, we do not anticipate recognizing any future material

revenue from Antares after January 31, 2024.

We may never generate revenues from any of our clinical or pre-clinical development

programs other than TLANDO, and we may never succeed in obtaining regulatory approval or commercializing any of these product

and Development Expenses

and development expenses consist primarily of salaries, benefits, stock-based compensation and related personnel costs, fees paid to

external service providers such as contract research organizations and contract manufacturing organizations, contractual obligations

for clinical development, clinical sites, manufacturing and scale-up for late stage clinical trials, formulation of clinical drug supplies,

and expenses associated with regulatory submissions.

Research and development expenses also include an allocation of indirect costs,

such as those for facilities, office expense, and depreciation of equipment based on the ratio of direct labor hours for research and

development personnel to total direct labor hours for all personnel.

We expense research and development expenses as incurred.

our inception, we have spent approximately $145.6 million in research and development expenses through September 30, 2023.

expect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates and the

ongoing Phase 2 POC study in male subjects with cirrhosis with LPCN 1148, as well as the development of any future pipeline product candidates.

general, the cost of clinical trials may vary significantly over the life of a project as a result of uncertainties in clinical development,

including, among others:

number of sites included in the trials;

length of time required to enroll suitable subjects;

duration of subject follow-ups;

length of time required to collect, analyze and report trial results;

cost, timing and outcome of regulatory review;

changes by the FDA in clinical trial and NDA filing requirements.

research and development expenditures are subject to numerous uncertainties regarding timing and cost to completion, including, among

timing and outcome of regulatory filings and FDA reviews and actions for product candidates;

dependence on third-party manufacturers for the production of satisfactory finished product

for registration and launch should regulatory approval be obtained on any of our product

potential for future license or co-promote arrangements for our product candidates, when

such arrangements will be secured, if at all, and to what degree such arrangements would

affect our future plans and capital requirements;

effect on our product development activities of actions taken by the FDA or other regulatory

change of outcome for any of these variables with respect to the development of our product development candidates could mean a substantial

change in the costs and timing associated with these efforts, could require us to raise additional capital, and may require us to reduce

the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing, and

regulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN 1154,

LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, LPCN 1107 and other product candidates.

Clinical development timelines, the probability of

success and development costs can differ materially from expectations and results from our clinical trials may not be favorable.

are successful in progressing LPCN 1154, LPCN 2101, or other future product candidates into later stage development, we will require

additional capital.

The amount and timing of our future research and development expenses for these product candidates will depend on

the pre-clinical and clinical success of both our current development activities and potential development of new product candidates,

as well as ongoing assessments of the commercial potential of such activities.

We will continue efforts to enter into partnership arrangements

for the continued development and/or marketing of LPCN 1144, LPCN 1148, LPCN 1111, LPCN 1107 and TLANDO outside of the U.S.

will continue to incur significant research and development expenses as we are conducting on-going clinical studies, including the studies

for our CNS product candidates and the Phase 2 POC study in male subjects with cirrhosis with LPCN 1148, and as we conduct future clinical

studies, including when and if we conduct Phase 2 clinical studies with our development product candidates and when and if we conduct

Phase 3 clinical studies with LPCN 1144, LPCN 1148, LPCN 1111 and LPCN 1107.

We are exploring the possibility of licensing LPCN 1144,

LPCN 1148, LPCN 1111 and LPCN 1107, although we have not entered into a licensing agreement and no assurance can be given that any license

agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.

If we are unable

to raise additional capital or obtain non-dilutive financing, we may need to reduce research and development expenses in order to extend

our ability to continue as a going concern.

and Administrative Expenses

and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation related to our executive,

finance, and administrative support functions.

Other general and administrative expenses include rent and utilities, travel expenses,

and professional fees for auditing, tax, legal, business development and various other services.

and administrative expenses also include expenses for the cost of preparing, filling and prosecuting patent applications and maintaining,

enforcing and defending intellectual property-related claims.

expect that general and administrative expenses will increase in the future as we continue as a public company including legal and consulting

fees, accounting and audit fees, director fees, directors’ and officers’ insurance premiums, fees for investor relations

services and enhanced business and accounting systems, litigation costs, professional fees and other costs.

However, if we are unable

to raise additional capital, we may need to reduce general and administrative expenses in order to extend our ability to continue as

a going concern.

Income and Expense

income and expense consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities, imputed

interest on minimum royalties under the Antares Licensing Agreement, interest expense incurred on our Loan and Security Agreement, losses

(gains) on our warrant liability and gains on our litigation liability.

of Operations

of the Three Months Ended September 30, 2023 and 2022

following table summarizes our results of operations for the three months ended September 30, 2023 and 2022:

Ended September 30,

$ (3,121,996 )

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Gain on warrant liability

recognized a non-cash revenue reversal of variable consideration for minimum guaranteed royalties of $3.1 million relating to the

termination of the Antares License Agreement during the three months ended September 30, 2023, and $0 during the three months ended

September 30, 2022, respectively.

As a result of the termination of the License Agreement, we do not anticipate recognizing any

future material revenue from Antares after January 31, 2024.

While we plan to seek a commercialization partner for TLANDO, there can

be no guarantee that we will be able to enter into such a transaction on terms favorable to us or at all.

and Development Expenses

increase in research and development expenses during the three months ended September 30, 2023, as compared to the three months ended

September 30, 2022 consists of a $694,000 increase in costs related to our LPCN 1154 clinical studies, a $639,000 increase in TLANDO

manufacturing related costs, and a $128,000 increase in personnel related costs, offset by a $245,000 decrease in LPCN 1111 scale up

costs in 2022, a $234,000 decrease in contract research organization expense related to the LPCN 1148 Phase 2 POC study in male subjects

with cirrhosis, a $148,000 decrease in contract research organization expense and outside consulting costs related to the completion

of our LPCN 1144 LiFT study in 2022, and a $56,000 decrease in LPCN 1107 PK and food effect studies and other research and development

costs in 2022.

and Administrative Expenses

increase in general and administrative expenses during the three months ended September 30, 2023 as compared to the three months ended

September 30, 2022 consists of a $105,000 increase in business development expenses, a $77,000 increase in personnel salaries and benefits,

a $48,000 increase in estimated franchise taxes resulting from our increase in authorized shares and reverse stock split, a $36,000 increase

in director fees, a $24,000 increase in various other professional fees and a $21,000 increase in professional services and legal fees.

These increases were offset by a $67,000 decrease in corporate insurance expense.

and Investment Income

increase in interest and investment income during the three months ended September 30, 2023 compared to interest and investment income

during the three months ended September 30, 2022 was due to higher interest rates despite declining cash and marketable investment securities

balances, in addition to imputed interest on the Antares License Agreement contract asset in 2023.

Loan and Security Agreement with SVB was paid in full in June of 2022, thus the Company did not recognize any interest expense during

the three months ended September 30, 2023 or September 30, 2022.

on Warrant Liability

recorded a gain of approximately $75,000 and $326,000 on warrant liability during the three months ended September 30, 2023, and 2022,

respectively, related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

gain in 2023 resulted from a decrease in the fair value of warrants outstanding as of September 30, 2023 as compared to June 30, 2023,

primarily due to the decrease in our stock price at the end of the third quarter of 2023 compared to the stock price at the end of the

second quarter of 2023 in addition to higher interest rates.

The gain in 2022 resulted from the decrease in the fair value of the warrants

outstanding as of September 30, 2022 compared to June 30, 2022 due to the lower stock price at the end of the third quarter of 2022 as

compared to the stock price at the end of the second quarter of 2022.

No common stock warrants from the November 2019 Offering were exercised

during either the three months ended September 30, 2023 or the three months ended September 30, 2022.

The warrants are classified as

a liability due to a provision contained within the warrant agreement which allows the warrant holder the option to elect 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 change of control.

The warrant liability will continue to fluctuate in the future based on inputs to the Black-Scholes

model including our current stock price, the remaining life of the warrants, the volatility of our stock price, the risk-free interest

rate and the number of common stock warrants outstanding.

of the Nine Months Ended September 30, 2023 and 2022

following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022:

ended September 30,

$ (3,067,006 )

$ (3,567,006 )

Research and development expenses

General and administrative expenses

Interest and investment income

Interest expense

Gain on warrant liability

Gain on litigation settlement

Income tax expense

recognized a non-cash revenue reversal of variable consideration for minimum guaranteed royalties of $3.1 million relating to the termination of the Antares

License Agreement during the nine months ended September 30, 2023.

The reversal of variable consideration revenue is offset by

license revenue of approximately $55,000 for payments received from Spriaso, a related party, under a licensing agreement in the

cough and cold field during the nine months ended September 30, 2023.

We recognized revenue related to a non-refundable cash fee of

$500,000 received from Antares for consideration of a 90-day extension for Antares to exercise its option to license LPCN 1111

during the nine months ended September 30, 2022.

As a result of the termination of the License Agreement, we do not anticipate

recognizing any future material revenue from Antares after January 31, 2024.

While we plan to seek a commercialization partner for

TLANDO, there can be no guarantee that we will be able to enter into such a transaction on terms favorable to us or at

and Development Expenses

increase in research and development expenses during the nine months ended September 30, 2023, as compared to the nine months ended September

30, 2022 consisted of a $978,000 increase in costs related to our LPCN 1154 clinical studies, a $738,000 increase in TLANDO manufacturing

related costs, a $559,000 increase in contract research organization expense related to the LPCN 1148 Phase 2 POC study in male subjects

with cirrhosis, and a $395,000 increase in personnel salaries and benefits resulting primarily from the hiring of additional personnel

These increases were offset by a $448,000 decrease related to LPCN 1111 scale up costs in 2022, a $365,000 decrease in contract

research organization expense and outside consulting costs related to the completion of our LPCN 1144 LiFT study in 2022, a $141,000

decrease related to the completion of our LPCN 1107 PK and food effect studies in 2022 and a $102,000 decrease in other research and

development activities.

and Administrative Expenses

increase in general and administrative expenses during the nine months ended September 30, 2023 as compared to the nine months ended

September 30, 2022 consists of a $238,000 increase in business development expenses, a $178,000 increase in professional and legal fees

related to our reverse stock split and other general and administrative expenses, a $140,000 increase in estimated franchise taxes, a

$126,000 increase in personnel salaries and benefit costs, a $104,000 increase in director fees, an $85,000 increase in market research

activities and a $45,000 increase in other general and administrative expenses.

These increases were offset by a $140,000 decrease resulting

from professional fees incurred in our recruitment of two additional directors in 2022, a $140,000 decrease in corporate insurance expense

and a $38,000 decrease in other various consulting fees.

and Investment Income

increase in interest and investment income during the nine months ended September 30, 2023 compared to interest and investment income

during the nine months ended September 30, 2022 was due to higher interest rates despite declining cash and marketable investment securities

balances, in addition to imputed interest on the Antares License Agreement contract asset in 2023.

Loan and Security Agreement with SVB was paid in full in June of 2022, thus the Company did not recognize any interest expense during

the nine months ended September 30, 2023.

Interest expense for the nine months ended September 30, 2022 was entirely related to that

Loan and Security Agreement.

on Warrant Liability

recorded a gain of approximately $200,000 and $532,000 on warrant liability during the nine months ended September 30, 2023, and 2022,

respectively, related to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering.

gain in 2023 resulted from a decrease in the fair value of warrants outstanding as of September 30, 2023 as compared to December 31,

2022, primarily due to the lower stock price at the end of the third quarter compared to the stock price at the end of 2022 and the gain

in 2022 resulted from the decrease in the fair value of the warrants outstanding as of September 30, 2022 compared to December 31, 2021

due to the lower stock price at the end of the third quarter of 2022 compared to the stock price at the end of 2021.

No common stock

warrants from the November 2019 Offering were exercised during either of the nine months ended September 30, 2023, or 2022.

are classified as a liability due to a provision contained within the warrant agreement which allows the warrant holder the option to

elect 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 change of control.

The warrant liability will continue to fluctuate in the future based

on inputs to the Black-Scholes model including our current stock price, the remaining life of the warrants, the volatility of our stock

price, the risk-free interest rate and the number of common stock warrants outstanding.

the nine months ended September 30, 2022, we recorded a gain on the settlement of litigation liability of $250,000 as a result of the

April 2022 Amendment to the Global Agreement with Clarus (the “Amended Settlement Agreement”).

Under the terms of the original

Global Agreement, we had agreed to pay Clarus $4.0 million payable as follows:

$2.5 million which was paid in July 2021, $1.0 million

which was to be paid on July 13, 2022, and $500,000 to be paid on July 13, 2023.

The Amended Settlement Agreement settled the payments

due in July 2022 and 2023 for $1,250,000 rather than the $1,500,000 total future payments due under the terms of the original Global

Agreement agreed to in 2021.

No future royalties are owing from either party under the Amendment to the Global Agreement.

and Capital Resources

our inception, our operations have been primarily financed through sales of our equity securities, debt and payments received under our

license and collaboration arrangements.

We have devoted our resources to funding research and development programs, including discovery

research, pre-clinical and clinical development activities.

We have incurred operating losses in most years since our inception and we

expect to continue to incur operating losses into the foreseeable future as we advance the clinical development of LPCN 1154, LPCN 2101,

LPCN 1148, and any other future product candidate, including continued research efforts.

of September 30, 2023, we had $23.8 million of unrestricted cash, cash equivalents and marketable investment securities compared to $32.5

million at December 31, 2022.

October 14, 2021, we entered into the Antares License Agreement with Antares, pursuant to which we granted to Antares an exclusive,

royalty-bearing, sublicensable right and license to develop and commercialize, upon final approval of TLANDO from the FDA, our

TLANDO product with respect to TRT in the U.S.

Upon execution of the Antares License Agreement, Antares paid to us an initial

payment of $11.0 million.

Antares has also agreed to make certain minimum royalty payments in the future and, since these future

minimum royalties are variable consideration deemed to be probable, approximately $4.0 million in revenue was recognized in 2021 for

the minimum royalties to be received in the future and a contract asset was recorded.

However, on October 2, 2023, we received

notice from Antares of Antares’ termination of the License Agreement effective January 31, 2024.

Based on the termination

notice, we recorded approximately a non-cash $3.1 million reversal of revenue related to the Antares License Agreement variable

consideration for minimum guaranteed royalties for the balance of the contract asset that is not expected to be received.

balance of the contract asset as of September 30, 2023 is approximately $131,000 and will be received in the fourth quarter of 2023.

As a result of the termination of the License Agreement, we do not anticipate recognizing any future material revenue or payments

from Antares after January 31, 2024.

While we plan to seek a commercialization partner for TLANDO, there can be no guarantee that

the Company will be able to enter into such a transaction on terms favorable to us or at all.

January 5, 2018, we entered into the Loan and Security Agreement with SVB pursuant to which SVB agreed to lend us $10.0 million.

principal borrowed under the Loan and Security Agreement bore interest at a rate equal to the Prime Rate, as reported in 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, which interest was payable monthly.

Additionally on April 1, 2020, we entered into a Deferral Agreement with SVB.

Under the Deferral Agreement, principal repayments were deferred by six months, and we were only required to make monthly interest payments

during the deferral period.

The Loan matured and was paid in full on June 1, 2022.

Additionally, we made a final payment at maturity

equal to $650,000 (the “Final Payment Charge”).

The expense of the Final Payment Charge had been recognized over the term

of the facility using the effective interest method.

March 6, 2017, we entered into a sales agreement (“Sales Agreement”) with Cantor Fitzgerald & Co.

pursuant to which we may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to the

amount we have registered on an effective registration statement pursuant to which the offering is being made.

We currently have registered

up to $50.0 million for sale under the Sales Agreement, pursuant to our Registration Statement on Form S-3 (File No.

333-250072) (the

“Form S-3”), through Cantor as our sales agent.

Cantor may sell our common stock by any method permitted by law deemed to

be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended, including sales made

directly on or through the NASDAQ Capital Market or any other existing trade market for our common stock, in negotiated transactions

at market prices prevailing at the time of sale or at prices related to prevailing market prices, or any other method permitted by law.

Cantor uses its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations

to sell these shares.

We pay Cantor 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement.

also provided Cantor with customary indemnification rights.

shares of our common stock sold under the Sales Agreement are sold and issued pursuant to our Registration Statement on Form S-3, which

was previously declared effective by the Securities and Exchange Commission, and the related prospectus and one or more prospectus supplements.

are not obligated to make any sales of our common stock under the Sales Agreement.

The offering of our common stock pursuant to the Sales

Agreement will terminate upon the termination of the Sales Agreement as permitted therein.

We and Cantor may each terminate the Sales

Agreement at any time upon ten days’ prior notice.

the three and nine months ended September 30, 2023, we sold 81,000 shares of our common stock under the Sales Agreement.

As of September

30, 2023, we had sold 964,711 shares of our common stock for $9,237,000 pursuant to the Sales Agreement and had approximately $40.8 million

available for sale under the Sales Agreement.

However, as of April 3, 2023, we are now subject to General Instruction I.B.6 of Form S-3

which limits the amounts that we may sell under the registration statement.

As a result of such limitations, we have currently registered

the offer and sale of shares of our common stock pursuant to the Sales Agreement having an aggregate offering price of up to $15.7 million.

believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating requirements

through at least the next twelve months which include on-going clinical studies for LPCN 1154, an on-going study for LPCN 1148, and research

and development activities and compliance with regulatory requirements.

We have based this estimate on assumptions that may prove to

be wrong, and we could utilize our available capital resources sooner than we currently expect if additional activities are performed

by us including new clinical studies for LPCN 1144, LPCN 1111, and LPCN 1107.

While we believe we have sufficient liquidity and capital

resources to fund our projected operating requirements through at least the next twelve months, we will need to raise additional capital

at some point through the equity or debt markets or through additional out-licensing activities to support our operations.

unsuccessful in raising additional capital as necessary, our ability to continue as a going concern will be limited.

Further, our operating

plan may change, and we 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, our capital resources may be consumed more rapidly if we pursue

additional clinical studies for LPCN 1154, LPCN 2101, LPCN 1148, LPCN 1144, LPCN 1111, and/or LPCN 1107.

Conversely, our capital resources

could last longer if we reduce expenses, reduce the number of activities currently contemplated under our operating plan or if we terminate,

modify or suspend on-going clinical studies.

We can raise capital pursuant to the Sales Agreement but may choose not to issue common

stock if our market price is too low to justify such sales in our discretion.

There are numerous risks and uncertainties associated with

the development and, subject to approval by the FDA, commercialization of our product candidates.

There are numerous risks and uncertainties

impacting our ability to enter into collaborations with third parties to participate in the development and potential commercialization

of our product candidates.

We are unable to precisely estimate the amounts of increased capital outlays and operating expenditures associated

with our anticipated or unanticipated clinical studies and ongoing development efforts.

All of these factors affect our need for additional

capital resources.

To fund future operations, we will need to ultimately raise additional capital and our requirements will depend on

many factors, including the following:

scope, rate of progress, results and cost of our clinical studies, pre-clinical testing and

other related activities for all of our product candidates, including LPCN 1154 and LPCN

2101, LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107 and;

cost of manufacturing clinical supplies and establishing commercial supplies of our product

candidates and any products that we may develop;

cost and timing of establishing sales, marketing and distribution capabilities, if any;

terms and timing of any collaborative, licensing, settlement and other arrangements that

we may establish;

number and characteristics of product candidates that we pursue;

cost, timing and outcomes of regulatory approvals;

timing, receipt and amount of sales, profit sharing, milestones or royalties, if any, from

our potential products;

cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other

intellectual property rights;

extent to which we acquire or invest in businesses, products or technologies, although we

currently have no commitments or agreements relating to any of these types of transactions;

extent to which we grow significantly in the number of employees or the scope of our operations.

may not be available to us on favorable terms, or at all.

Also, market conditions may prevent us from accessing the debt and equity capital

markets, including sales of our common stock through the Sales Agreement.

If we are unable to obtain adequate financing when needed,

we may have to delay, reduce the scope of or suspend one or more of our clinical studies, research and development programs or, if any

of our product candidates receive approval from the FDA, commercialization efforts.

We may seek to raise any necessary additional capital

through a combination of public or private equity offerings, including the Sales Agreement, debt financings, collaborations, strategic

alliances, licensing arrangements and other marketing and distribution arrangements.

These arrangements may not be available to us or

available on terms favorable to us.

To the extent that we raise additional capital through marketing and distribution arrangements, other

collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product

candidates, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will

be diluted, and the terms of these securities may include liquidation or other preferences, warrants or other terms that adversely affect

our stockholders’ rights or further complicate raising additional capital in the future.

If we raise additional capital through

debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional

debt, making capital expenditures or declaring dividends.

If we are unable, for any reason, to raise needed capital, we will have to

reduce costs, delay research and development programs, liquidate assets, dispose of rights, commercialize products or product candidates

earlier than planned or on less favorable terms than desired or reduce or cease operations.

and Uses of Cash

following table provides a summary of our cash flows for the nine months ended September 30, 2023, and 2022:

Nine Months Ended September 30,

Cash used in operating activities

$ (9,843,686 )

$ (10,129,905 )

Cash provided by investing activities

Cash provided by (used in) financing activities

Cash from Operating Activities

the nine months ended September 30, 2023 and 2022, net cash used in operating activities was $9.8 million and $10.1 million, respectively.

cash used in operating activities during the nine months ended September 30, 2023, and 2022, was primarily attributable to cash outlays

to support ongoing operations, including research and development expenses and general and administrative expenses.

During 2023, we performed

activities primarily related to our LPCN 1154 clinical studies, our LPCN 1148 Phase 2 POC study in male subjects with cirrhosis, and

TLANDO manufacturing capabilities.

During 2022, we performed activities related mainly to the Phase 2 POC study in male subjects with

cirrhosis with LPCN 1148, PK and food effect studies with LPCN 1154 and LPCN 1107, and manufacturing scale up with LPCN 1111.

Cash from Investing Activities

the nine months ended September 30, 2023 and 2022, net cash provided by investing activities was $10.4 million and $11.7 million, respectively.

cash provided by investing activities during the nine months ended September 30, 2023, and 2022, was primarily the result of the maturity

of marketable investment securities, net of $10.3 million and $11.7 million, respectively.

There were approximately $4,000 and $37,000

in capital expenditures during the nine months ended September 30, 2023, and 2022, respectively.

Cash from Financing Activities

the nine months ended September 30, 2023 and 2022, net cash provided by in financing activities was approximately $410,000 and net cash

used in financing activities was $2.1 million, respectively.

cash provided by financing activities during the nine months ended September 30, 2023 was related to the sale of 81,000 shares of our

common stock under our ATM registered offering, less associated costs.

Net cash used in financing activities during the nine months ended

September 30, 2022, was due to loan repayments of $1.7 million and payment of the Final Payment Charge of $650,000 related to the SVB

Loan and Security Agreement, offset by $211,000 in cash provided by proceeds from stock option exercises.

Commitments and Contingencies

Debt Obligations and Interest on Debt

January 5, 2018, we entered into a Loan and Security Agreement with SVB pursuant to which SVB agreed to lend us $10.0 million.

The principal

borrowed under the Loan and Security Agreement bore interest at a rate equal to the Prime Rate plus one percent per annum, which interest

was payable monthly.

The loan matured on June 1, 2022 and the outstanding principal, interest and Final Payment Charge were paid in full.

enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials

and clinical and commercial supply manufacturing and with vendors for pre-clinical research studies, research supplies and other services

and products for operating purposes.

These contracts generally provide for termination on notice and are cancellable obligations.

August 2004, we entered into an agreement to lease our facility in Salt Lake City, Utah consisting of office and laboratory space which

serves as our corporate headquarters.

On January 16, 2023, we modified and extended the lease through February 28, 2024.

Accounting Policies and Significant Judgments and Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements

which we have prepared in accordance with U.S.

generally accepted accounting principles.

In preparing our financial statements, we are

required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,

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

from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant

and material changes in our critical accounting policies during the nine months ended September 30, 2023, as compared to those disclosed

in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and

Significant Judgments and Estimates” in our Form 10-K filed March 10, 2023.

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