What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-08 · 936 added, 1089 removed, 937 unchanged (68% of the section changed)

FINANCIAL STATEMENTS

LIPOCINE INC.

AND SUBSIDIARIES

Consolidated Balance Sheets

Condensed Consolidated Balance Sheets

Current assets:

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’

Cash and cash equivalents

Marketable investment securities

Accrued interest income

Prepaid and other current assets

Total current assets

Property and equipment, net of accumulated depreciation of $ 1,190,703 and $ 1,182,191 respectively

Liabilities and Stockholders’ Equity

Current liabilities:

1 unchanged sentence

Accrued expenses

Total current

Warrant liability

Total current liabilities

Total liabilities

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

Stockholders’

Commitments and contingencies (notes 7, 8, 9 and 10)

Stockholders’ equity:

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

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

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

Additional paid-in capital

Treasury stock at cost, 336 shares

Accumulated other comprehensive gain (loss)

Accumulated deficit

( 196,263,593 )

( 199,777,214 )

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements

LIPOCINE INC.

AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended September 30,

Nine Months Ended September 30,

Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31,

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 )

Royalty revenue

Total revenues

Operating expenses:

2 unchanged sentences

Total operating expenses

Operating loss

( 7,043,366 )

( 2,899,371 )

( 15,337,606 )

Operating income (loss)

( 4,338,633 )

1 unchanged sentence

Interest and investment income

Interest expense

Unrealized gain on warrant liability

Gain on litigation settlement liability

Unrealized gain (loss) on warrant liability

Total other income, net

Loss before income tax expense

( 6,650,970 )

( 2,409,165 )

( 14,069,629 )

Income (loss) before income tax expense

( 3,870,030 )

Income tax expense

( 6,650,970 )

( 2,409,165 )

( 14,069,829 )

Net income (loss)

( 3,870,230 )

Issuance of Series B preferred stock dividend

Net loss attributable to common shareholders

$ ( 6,650,970 )

$ ( 2,409,165 )

$ ( 14,069,918 )

Net income (loss) attributable to common shareholders

$ ( 3,870,319 )

Basic loss per share attributable to common stock

Basic income (loss) per share attributable to common stock

Weighted average common shares outstanding, basic

Diluted loss per share attributable to common stock

Diluted income (loss) per share attributable to common stock

Weighted average common shares outstanding, diluted

Comprehensive loss:

$ ( 6,650,970 )

$ ( 2,409,165 )

$ ( 14,069,829 )

$ ( 8,528,723 )

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

Comprehensive loss

$ ( 6,649,661 )

$ ( 2,401,193 )

Net income (loss)

$ ( 3,870,319 )

Net unrealized gain (loss) on marketable investment securities

Comprehensive income (loss)

$ ( 3,846,757 )

accompanying notes to unaudited condensed consolidated financial statements

See accompanying notes to condensed consolidated financial statements

LIPOCINE INC.

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

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 June 30, 2022

$ 218,792,479

$ ( 178,785,965 )

( 2,409,165 )

Unrealized net gain on marketable investment securities

Stock-based compensation

Option exercises

Costs associated with ATM Offering

Balances at September 30, 2022

$ 218,952,749

$ ( 181,195,130 )

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2024 and 2023

Mezzanine Equity

2 unchanged sentences

Treasury Stock

Accumulated Other

Number of Shares

2 unchanged sentences

Paid-In Capital

Comprehensive Loss

Comprehensive Gain (Loss)

Accumulated Deficit

5 unchanged sentences

( 3,870,230 )

Unrealized net loss on marketable investment securities

Unrealized net gain on marketable investment securities

Stock-based compensation

Issuance of Series B preferred stock dividend

Redemption of Series B preferred stock

Option exercises

Costs associated with ATM Offering

Balances at September 30, 20 22

Balances at March 31, 2023

$ 219,284,000

4 unchanged sentences

Treasury Stock

Accumulated Other

Number of Shares

4 unchanged sentences

Accumulated Deficit

Stockholders’

Balances at June 30, 2023

( 190,843,991 )

( 6,650,970 )

Unrealized net gain on marketable investment securities

Stock-based compensation

Common stock sold through ATM offering

Balances at September 30, 2023

$ 220,022,838

$ ( 197,494,961 )

Mezzanine Equity

Stockholder’s Equity

Series B Preferred Stock

Treasury Stock

Number of Shares

Paid-In Capital

Comprehensive Loss

Accumulated Deficit

Stockholders’ Equity

4 unchanged sentences

$ ( 199,777,214 )

( 14,069,829 )

Unrealized net gain on marketable investment securities

Net income (loss)

Unrealized net loss on marketable investment securities

Stock-based compensation

Issuance of Series B preferred stock dividend

Redemption of Series B preferred stock

Common stock sold through ATM offering

Balances at September 30, 2023

Costs associated with ATM Offering

Balances at March 31, 2024

$ 220,262,456

2 unchanged sentences

$ ( 196,263,593 )

accompanying notes to unaudited condensed consolidated financial statements

accompanying notes to condensed consolidated financial statements

LIPOCINE INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Cash flows from operating activities:

$ ( 14,069,829 )

Net income (loss)

$ ( 3,870,230 )

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

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

Depreciation expense

Stock-based compensation expense

Non-cash interest expense

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

Amortization of premium (discounts) on marketable investment securities

Write off of contract asset due to variable consideration revenue reversal

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

Amortization of discounts on marketable investment securities

Changes in operating assets and liabilities:

Accrued interest income

Contract asset

Prepaid and other current assets

1 unchanged sentence

Accrued expenses

Litigation settlement liability

( 1,250,000 )

Gain on extinguishment of litigation settlement liability

Cash used in operating activities

( 9,843,686 )

Cash provided by (used in) operating activities

( 3,928,057 )

5 unchanged sentences

Maturities of marketable investment securities

Cash provided by investing activities

Cash flows from financing activities:

Debt repayments

Net cash provided by (used in) investing activities

( 4,089,840 )

End of loan payment

Net proceeds from sale of common stock through ATM

Proceeds from stock option exercises

Cash provided by (used in) financing activities

Cash flows from financing activities:

Costs associated with ATM Offering

Cash used in financing activities

Net increase in cash and cash equivalents

( 1,690,421 )

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

1 unchanged sentence

Supplemental disclosure of cash flow information:

Interest paid

Income taxes paid

1 unchanged sentence

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

Accrued final payment charge on debt

Issuance of Series B preferred stock

accompanying notes to unaudited condensed consolidated financial statements

accompanying notes to condensed consolidated financial statements

to Condensed Consolidated Financial Statements

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in accordance with rules and regulations of the SEC.

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.

Operating results for the three months ended March 31, 2024 are not necessarily

indicative of the results that may be expected for any future period or for the year ending December 31, 2024.

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 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

Amended and Restated Certificate of Incorporation to effect a reverse stock split at a ratio not less than 1-for-5 and not more than

1-for-20, with the exact ratio to be set within that range at the discretion of the Company’s board of directors (the “Board”)

without further approval or authorization from our stockholders in order to achieve a minimum bid price of $1.00 per share for a minimum

of 10 consecutive trading days , as required for continuous listing of the common stock on the Nasdaq Capital Market pursuant to Nasdaq

Listing Rule 5550(a)(2).

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

requirements through at least May 9, 2025.

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.

While the Company believes it has sufficient liquidity

and capital resources to fund our projected operating requirements through at least May 9, 2025, 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 1154, LPCN 2101, LPCN 2203, LPCN 2401, LPCN 1148, LPCN 1144, and or LPCN

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 of or suspends on-going clinical studies.

January 12, 2024, the Company entered into a License Agreement (the “License Agreement”) with Gordon Silver Limited (“GSL”)

and Verity Pharmaceuticals, Inc.

(“Verity Pharma”), pursuant to which the Company granted to GSL (an affiliate of Verity

Pharma) an exclusive, royalty-bearing, sublicensable right and license to commercialize the Company’s TLANDO® product with

respect to testosterone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone,

as indicated in NDA No.

208088, treatment of Klinefelter syndrome, and pediatric indications relating to testosterone replacement therapy

in males for conditions associated with a deficiency or absence of endogenous testosterone (the “Field”), in each case within

the United States and Canada.

The License Agreement also provides GSL with a license to develop and commercialize TLANDO XR, the Company’s

potential once-daily oral product candidate for testosterone replacement therapy.

The Company retains development and commercialization

rights for TLANDO and TLANDO XR outside of the United States and Canada, and with respect to applications outside of the Field inside

or outside the United States and Canada.

execution of the License Agreement, GSL agreed to pay the Company a license fee of $ 11.0 million with an initial payment of $ 2.5 million

which was received on signing of the License Agreement, $ 5.0 million which was received on February 1, 2024, $ 2.5 million to be paid

no later than January 1, 2025, and $ 1.0 million to be paid no later than January 1, 2026.

The Company is also eligible to receive development

and sales milestone payments of up to $ 259 million in the aggregate, depending primarily on the achievement of certain sales milestones

in a single calendar year with respect to all products licensed by GSL under the License Agreement.

In addition, the Company is eligible

to receive tiered royalty payments at rates ranging from 12 % up to 18 % of net sales of licensed products in the United States and Canada.

May 10, 2023, the Company’s Board approved a reverse stock split ratio of 1-for-17 .

18 unchanged sentences

such changes become known.

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

Note 7 for a description of the license agreement (“Verity License Agreement”) with Verity Pharma, Inc.

See Note 11 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

performance obligation.

Performance obligations under these licenses, which consist of the right to use the Company’s proprietary

technology, are satisfied at a point in time corresponding with delivery of the underlying technology rights to the licensee, which is

generally upon transfer of the licensed technology/product to the customer.

In addition, license arrangements may include contingent

milestone payments, which are due following achievement by our licensee of specified sales or regulatory milestones and the licensee

and/or Company will fulfill its performance obligation prior to achievement of these milestones.

Because of the uncertainty of the milestone

achievement, and/or the dependence on sales of our licensee, variable consideration for contingent milestones is fully constrained and

is not recognized as revenue until the milestone is achieved by our licensee, to the extent collectability is reasonably certain.

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

Sales-based royalties

revenue represents variable consideration under the license agreements and is recognized in the period a customer sells products incorporating

the Company’s licensed technologies/products.

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

Performance obligations under these licenses, which consist of the right to use the Company’s proprietary technology, are satisfied

at a point in time corresponding with delivery of the underlying technology rights to the licensee, which is generally upon transfer

of the licensed technology/product to the customer.

In addition, license arrangements may include contingent milestone payments, which

are due following achievement by our licensee of specified sales or regulatory milestones and the licensee and/or Company will fulfill

its performance obligation prior to achievement of these milestones.

Because of the uncertainty of the milestone achievement, and/or

the dependence on sales of our licensee, variable consideration for contingent milestones is fully constrained and is not recognized

as revenue until the milestone is achieved by our licensee, to the extent collectability is reasonably certain.

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

Sales-based royalties revenue

represents variable consideration under license agreements and is recognized in the period a customer sells products incorporating the

Company’s licensed technologies/products.

The Company estimates sales-based royalties revenue earned but unpaid at each reporting

5 unchanged sentences

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

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 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.

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

For the three months ended

March 31, 2024, the Company recognized licensing revenue of $ 7.5 million and royalty revenue of $ 51,000 relating to the Verity License

The revenue recognized in 2024 was 99 % from one major customer, Verity.

License revenue recognized in the three months ended

March 31, 2023 of $ 55,000 , was 100 % from a related-party, Spriaso.

(3) Earnings (Loss) per Share

4 unchanged sentences

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

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

ended September 30, 2023 and 2022:

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

Three Months Ended September 30,

Nine Months Ended September 30,

Basic loss per share attributable to common stock:

$ ( 6,650,970 )

$ ( 2,409,165 )

$ ( 14,069,829 )

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

March 31, 2024 and 2023:

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

Three Months Ended March 31,

Basic earnings (loss) per share attributable to common stock:

Net earnings (loss)

$ ( 3,870,319 )

1 unchanged sentence

common shares outstanding

Basic loss per share attributable to common stock

Diluted loss per share attributable to common stock:

$ ( 6,650,970 )

$ ( 2,409,165 )

$ ( 14,069,829 )

Basic earnings (loss) per share attributable to common stock

Diluted earnings (loss) per share attributable to common stock:

Net earnings (loss)

$ ( 3,870,319 )

Effect of dilutive securities on net loss:

Effect of dilutive securities on net earnings (loss):

Common stock warrants

Total net loss for purpose of calculating diluted net loss per common share

$ ( 6,725,797 )

$ ( 2,735,405 )

$ ( 14,270,245 )

Total net earnings (loss) for purpose of calculating diluted net earnings (loss)

per common share

$ ( 3,968,453 )

2 unchanged sentences

Weighted average effect of dilutive securities:

Common stock warrants

Stock options

Restricted stock units

Dilutive securities

Total shares for purpose of calculating diluted net loss per common share

Diluted loss per share attributable to common stock

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,

computation of diluted loss per share for the three months ended March 31, 2024 and 2023 does not include the following stock options

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

these instruments were antidilutive:

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

Stock options

Unvested restricted stock

(4) Marketable Investment Securities

7 unchanged sentences

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 September 30, 2023, and December 31, 2022, were as follows:

securities by major security type and class of security as of March 31, 2024, and December 31, 2023, were as follows:

of Available for Sale Securities

September 30, 2023

March 31, 2024

Amortized Cost

3 unchanged sentences

Government treasury bills

Corporate bonds, notes and commercial paper

government agency securities

5 unchanged sentences

Government treasury bills

Commercial paper

government agency securities

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

September 30, 2023

of debt securities classified as available-for-sale securities as of March 31, 2024 are as follows:

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

March 31, 2024

Amortized Cost

1 unchanged sentence

Due within one year

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.

were no sales of marketable investment securities during the three months ended March 31, 2024 and 2023 and therefore no realized gains

Additionally, during the three months ended March 31, 2024 and 2023, $ 6.7 million and $ 12.0 million of marketable investment

securities matured, respectively.

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

31, 2024 and 2023.

(5) Fair Value

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

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

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

of Fair Value, Assets Measured on Recurring Basis

value measurements at reporting date using

equivalents - money market funds

treasury bills

bonds and notes

and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:

of Fair Value, Assets and Liabilities Measured on Recurring Basis

Fair value measurements at reporting date using

March 31, 2024

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

Government treasury bills

Government agency securities

value measurements at reporting date using

equivalents - money market funds

treasury bills

bonds and notes

Warrant liability

Fair value measurements at reporting date using

Deember 31, 2023

Level 1 inputs

Level 2 inputs

Level 3 inputs

Cash equivalents - money market funds

Government treasury bills

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

10 unchanged sentences

and reportable trades.

bonds, notes, commercial paper and U.S.

government agency securities:

The Company uses a third-party pricing service to value these investments.

Corporate bonds, notes and commercial paper and U.S.

government agency securities are classified within Level 2 of the fair value hierarchy

because they are valued using broker/dealer quotes, bids and offers, benchmark yields and credit spreads and other observable inputs.

government agency securities

are classified within Level 2 of the fair value hierarchy because they are valued using broker/dealer quotes, bids and offers, benchmark

yields and credit spreads and other observable inputs.

The warrant liability (which relates to warrants to purchase shares of common stock)

4 unchanged sentences

The significant

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

assumptions used in preparing the option pricing model for valuing the warrant liability as of March 31, 2024, include (i) volatility

of 100 %, (ii) risk free interest rate of 5.38 %, (iii) strike price of $ 8.50 , (iv) fair value of common stock of $ 5.20 , and (v) expected

5 unchanged sentences

in circumstances that caused the transfer.

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

months ended September 30, 2023.

Loan and Security Agreements

Valley Bank Loan

January 5, 2018, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Silicon

Valley Bank (“SVB”) pursuant to which SVB agreed to lend the Company $ 10.0 million.

The principal borrowed under the Loan

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

or any successor publication representing the rate of interest per annum then in effect, plus one percent per annum, which interest was

payable monthly.

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

Under the Deferral Agreement,

principal repayments were deferred by six months and the Company was only required to make monthly interest payments.

The loan matured

and was paid in full on June 1, 2022 .

The Company 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.

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

(6) Income Taxes

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

2 unchanged sentences

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

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.

March 31, 2024 and December 31, 2023, the Company had a full valuation allowance against its deferred tax assets, net of expected reversals

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

(7) Contractual Agreements

10 unchanged sentences

TLANDO was commercially launched on June 7, 2022.

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,

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

pursuant to which the Company granted to Antares an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize,

upon final approval of TLANDO® from the U.S.

Food and Drug Administration (“FDA”), the Company’s TLANDO product

with respect to testosterone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone,

as indicated in New Drug Application (“NDA”) No.

208088, treatment of Klinefelter syndrome, and pediatric indications relating

to testosterone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone (the “Field”),

in each case within the United States.

The Company incurred royalty expense of approximately $ 9,000 and $ 4,000 during the

three months ended March 31, 2024 and 2023, respectively.

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

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

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

therapy in males for conditions associated with a deficiency or absence of endogenous testosterone, as indicated in New Drug Application

208088, treatment of Klinefelter syndrome, and pediatric indications relating to testosterone replacement therapy

in males for conditions associated with a deficiency or absence of endogenous testosterone, in each case within

the United States.

TLANDO received FDA approval on March 29, 2022.

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

Antares will also make additional

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

The Company is also eligible to receive milestone payments of up to $ 160.0 million in the aggregate, depending on the achievement of

Antares agreed to make additional

payments of $ 5.0 million to the Company on each of January 1, 2025, and January 1, 2026, provided that certain conditions were satisfied.

The Company was 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 TLANDO, as licensed by Antares under the Antares License Agreement.

In addition, the Company will receive tiered royalty payments at rates ranging from percentages in the mid-teens to up to 20 % of net

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

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 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

responsible for expenses relating to development activities outside of the Field and/or the United States.

The Antares License Agreement

also provided Antares with an option, exercisable on or before March 31, 2022, to license TLANDO XR (LPCN 1111), the Company’s

potential once-daily oral product candidate for testosterone replacement therapy.

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

Amendment to the License Agreement (the “Amendment”), pursuant to which the License Agreement was amended to extend the deadline

by which Antares was to exercise its option to license TLANDO XR to June 30, 2022.

As consideration for the Company agreeing to enter

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

On June 30, 2022, Antares’ option

to license TLANDO XR expired and was not exercised.

Lipocine retains all development and commercialization rights to TLANDO XR.

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

through the 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.

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 $ 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.

In addition, the Company was to receive tiered royalty payments at rates ranging from percentages in the mid-teens up to 20 % of net sales

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

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

terminated effective January 31, 2024.

On January 12, 2024, the Company entered into a license agreement (the “Verity License Agreement”)

with Verity Pharmaceuticals Inc.

See Note 7(c) for a description of the Verity License Agreement.

Upon termination

of the Antares License Agreement, all rights and licenses granted by the Company to Antares under the Antares License Agreement terminated

and all rights in TLANDO were transferred to the Company’s new licensing partner, Verity.

Company recognized revenue of approximately $ 67,000 and $ 0 for the three months ended March 31, 2024 and 2023, respectively, under the

Antares License Agreement and does not expect to receive any further royalties in the future.

Verity Pharmaceuticals, Inc.

January 12, 2024, the Company entered into a License Agreement (the “License Agreement”) with Gordon Silver Limited (“GSL”)

and Verity, pursuant to which the Company granted to GSL (an affiliate of Verity Pharma) an exclusive, royalty-bearing, sublicensable

right and license to commercialize the Company’s TLANDO product with respect to testosterone replacement therapy in males for conditions

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

208088, treatment of Klinefelter syndrome,

and pediatric indications relating to testosterone replacement therapy in males for conditions associated with a deficiency or absence

of endogenous testosterone (the “Field”), in each case within the United States and Canada.

The Verity License Agreement

also provides GSL with a license to develop and commercialize TLANDO XR (LPCN 1111), the Company’s potential once-daily oral product

candidate for testosterone replacement therapy.

The Company retains rights to TLANDO and TLANDO XR in applications outside of the Field

and to development and commercialization rights in the field outside of the United States and Canada.

execution of the Verity License Agreement, GSL agreed to pay the Company a license fee of $ 11.0 million with an initial payment of $ 2.5

million which was received on signing of the Verity License Agreement, $ 5.0 million which was received on February 1, 2024, $ 2.5 million

to be paid no later than January 1, 2025, and $ 1.0 million to be paid no later than January 1, 2026.

The Company is also eligible to

receive development and sales milestone payments of up to $ 259.0 million in the aggregate, depending primarily on the achievement of

certain sales milestones in a single calendar year with respect to all products licensed by GSL under the Verity License Agreement.

is generally responsible for expenses relating to the development (including the conduct of any clinical trials) and commercialization

of licensed products in the Field in the United States and Canada, while the Company is generally responsible for expenses relating to

development activities outside of the Field and/or the United States and Canada.

Company concluded that licensing revenue recognized in conjunction with the Verity License Agreement met the requirements under ASC 606,

Revenue from Contracts with Customers.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts

the measure of performance and related revenue recognition.

License revenue from payments to be received in the future will be recognized

when it is probable that we will receive license payments under the terms of the Verity License Agreement.

the three months ended March 31, 2024, the Company recognized $ 7.5 million in licensing revenue and $ 51,000 in royalty revenue.

Contract 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 $ 1.9 million and $ 2.1 million, respectively, for the three months ended

March 31, 2024 and 2023 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, 2025.

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

of Future Minimum Lease Payments for Operating Leases

minimum lease payments under the non-cancelable operating lease as of March 31, 2024 are:

Schedule of Future Minimum Rental 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 September 30, 2023 and 2022, respectively.

The Company’s

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

Company’s rent expense was $ 90,000 and $ 87,000 for the three months ended March 31, 2024 and 2023, respectively.

(9) Stockholders’ Equity

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

Amended and Restated Certificate of Incorporation to effect a reverse stock split at a ratio not less than 1-for-5 and not more than

1-for-20, with the exact ratio to be set within that range at the discretion of the Board without further approval or authorization from

our stockholders.

May 10, 2023, the Company’s Board approved a reverse stock split ratio of 1-for-17 .

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common stock share data and per share price data of the Company reflect the reverse stock split effective May 11, 2023.

June 8, 2022, at the 2022 annual meeting of the stockholders, the Company’s stockholders approved an amendment to the Company’s

Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock, par

value $ 0.0001 , from 100,000,000 shares to 200,000,000 shares.

The Company filed the amendment to the Restated Certificate with the Secretary

of State of the State of Delaware on June 28, 2022.

The amendment to the Restated Certificate became effective upon filing with the Secretary

of State of the State of Delaware.

Company is authorized to issue up to 200,000,000 shares of its common stock, par value $ 0.0001 .

of Common Stock

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

(“Cantor”) pursuant to which

the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to the amount

the Company registered on an effective registration statement pursuant to which the offering is being made.

The Company currently has

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

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

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

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

currently has registered up to $ 50.0 million for sale under the Sales Agreement, pursuant to the Registration Statement on Form S-3 (File

333-250072) through Cantor as the Company’s sales agent.

Cantor may sell the Company’s 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, 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

Cantor may sell the Company’s 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, 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.

The Company pays Cantor 3.0 % of the aggregate gross proceeds from each sale of shares under the Sales Agreement.

the Company has also provided Cantor with customary indemnification rights.

In addition, the Company has also provided Cantor with customary indemnification rights.

shares of the Company’s common stock sold under the Sales Agreement are sold and issued pursuant to the Registration Statement

on Form S-3 (File No.

333-250072) (the “Form S-3”), which was previously declared effective by the Securities and Exchange

Commission, and the related prospectus and one or more prospectus supplements.

Company is not obligated to make any sales of its common stock under the Sales Agreement.

The offering of common stock pursuant to the

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

The Company and Cantor may each terminate

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

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 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.

333-250072), which was previously declared effective by the Securities and Exchange Commission, and the related

prospectus and one or more prospectus supplements.

The Company is not obligated to make any sales of its common stock under the Sales

The offering of common stock pursuant to the Sales Agreement will terminate upon the termination of the Sales Agreement as

permitted therein.

of March 31, 2024, 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 months ended March 31, 2024 and 2023,

the Company did not sell any shares of its common stock pursuant to the Sales Agreement.

As of March 31, 2024, the Company had $ 40.8

million available for sale under the Sales Agreement, however, the Company is subject to General Instruction I.B.6 of Form S-3 which

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

April 24, 2024 the Sales Agreement with Cantor was terminated and a new sales agreement was entered into with Alliance Global Partners

(“A.G.P.”) on April 26, 2024 as noted in Note 13, Subsequent Events.

B Preferred Stock

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Redemption”).

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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issuance, the shares of Series B Preferred Stock were measured at redemption value.

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

As of May 10, 2023, all shares of Series B Preferred

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

the Certificate of Designation, which is filed as Exhibit 3.2 to the Form 8-K filed with the SEC on March 10, 2023.

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

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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 $ 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:

operations amounted to approximately $ 99,000 and $ 178,000 , respectively, for the three months ended March 31, 2024 and 2023, respectively,

and is allocated as follows:

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development

General and administrative

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.

Company issued 25,626 and 17,647 stock options, respectively, during the three months ended March 31, 2024 and 2023.

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

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The expected term was estimated

using the simplified method in accordance with the provisions of Staff Accounting Bulletin (“SAB”) No.

107, Share-Based

Payment for awards with stated or implied service periods.

The simplified method defines the expected term as the average of the

contractual term and the vesting period of the stock option.

For awards with performance conditions, and that have the contractual term

to satisfy the performance condition, the contractual term was used.

using the average of the contractual term and the vesting period of the stock option.

For awards with performance conditions, and that

have the contractual term to satisfy the performance condition, the contractual term was used.

Interest Rate:

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

options granted during the nine months ended September 30, 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 three months ended March 31, 2024 and 2023, 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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Expected volatility

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

Therefore, the Company applied estimated forfeiture rates that were derived from historical employee termination behavior.

the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required

in future periods.

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.

Company recognizes compensation expense for the portion of options that are expected to vest.

Therefore, the Company applied estimated

forfeiture rates that were derived from historical employee termination behavior.

If the actual number of forfeitures differs from those

estimated by management, additional adjustments to compensation expense may be required in future periods.

of March 31, 2024, there was approximately $ 435,000 of total unrecognized compensation cost related to unvested stock option compensation

granted under the Company’s stock option plan.

That cost is expected to be recognized over a weighted average period of 0.8 years

and will be adjusted for subsequent changes in estimated forfeitures.

Additionally, as of March 31, 2024, there was $ 79,000 of total

unrecognized compensation costs related to unvested restricted stock units that have either time-based or performance vesting.

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

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stock units, restricted stock and dividend equivalents.

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

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 .

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

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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 46,600

shares remaining available for grant as of September

An aggregate of 336,582 shares

of common stock are authorized for issuance under the 2014 Plan, with 2,448 shares remaining available for grant as of March 31, 2024.

summary of stock option activity is as follows:

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Options cancelled

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:

Balance at March 31, 2024

Options exercisable at March 31, 2024

following table summarizes information about stock options outstanding and exercisable at March 31, 2024:

of Share-based Compensation of Stock Options Outstanding and Exercisable

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

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 options exercised during the three months ended March 31, 2024 and 2023, respectively.

(f) Restricted

summary of restricted stock unit activity is as follows:

of Restricted Stock Unit Activity

Number of unvested restricted stock units

Balance at December 31,2023

Balance at March 31, 2024

weighted average grant date fair value of restricted stock units awarded during the three months ended March 31, 2024 was $ 3.61 per share.

No restricted stock units were awarded during the three months ended March 31, 2023.

Stock Warrants

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upon a fundamental transaction.

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

of March 31, 2024, 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 March 31, 2024 and on December 31, 2023 was determined using the Black-Scholes

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

Schedule of Fair Value of Warrants

March 31, 2024

December 31, 2023

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Dividend yield

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 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:

of Reconciliation of Warrant Liability

the three months ended March 31, 2024, the Company recorded a non-cash loss of approximately $ 40,000 from the change in fair value of

the November 2019 Offering warrants.

During the three months ended March 31, 2023, the Company recorded a non-cash gain of approximately

$ 98,000 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:

Schedule of Reconciliation of Warrant Liability

Warrant Liability

Balance at December 31, 2023

Settlement of liability on warrant exercise

Change in fair value of common stock warrants

Balance at September 30, 2023

Balance at March 31, 2024

Additionally,

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

As of September 30, 2023, and 2022,

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

As of March 31, 2024, and 2023, 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

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

Weighted Average Exercise Price

Outstanding at December 31, 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

Balance at March 31, 2024

were no common stock warrants exercised during either the three months ended March 31, 2024 or 2023.

following table summarizes information about common stock warrants outstanding at March 31, 2024:

of Common Stock Warrants Outstanding

Warrants outstanding

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The Company records a liability when a particular contingency is probable and estimable.

April 2, 2019, the Company filed a lawsuit against Clarus in the United States District Court for the District of Delaware alleging that

Clarus’s JATENZO® product infringes six of Lipocine’s issued U.S.

and 6,923,988.

However, on February 11, 2020, the Company voluntarily dismissed allegations of patent infringement for expired

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

Clarus answered the

complaint and asserted counterclaims of non-infringement and invalidity.

The Company answered Clarus’s counterclaims on April 29,

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

hearing on January 15, 2021.

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

Lipocine’s U.S.

patents 9,034,858;

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

Clarus still had remaining claims before the Court.

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

(the “Global Agreement”) with Clarus which resolved all outstanding claims of this litigation as well as the on-going United

States Patent and Trademark Office (“USPTO”) Interference No.

106,128 between the parties.

Under the terms of the Global

Agreement, the Company agreed to pay Clarus $ 4.0 million payable as follows:

$ 2.5 million immediately, $ 1.0 million on July 13, 2022

and $ 500,000 on July 13, 2023.

On April 29, 2022, the Company agreed to an amendment to Section 3.1 of the Global Agreement (the “Amendment

to the Global Agreement”), pursuant to which the Company agreed to pay Clarus $ 1,250,000 in May 2022, with no additional payments

required thereafter.

No future royalties are owing from either party.

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

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On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action.

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

Company is not currently aware of any matter, individually or in the aggregate, that could have a material adverse effect on our financial

condition, liquidity, or results of operations.

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Additionally, during

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

the three months ended March 31, 2024 and 2023, the Company received licensing revenue from Spriaso of approximately $ 0 and $ 55,000 ,

respectively.

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.

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.

(12) Recent Accounting Pronouncements

Pronouncements Issued Not Yet Adopted

November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic

Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280.

The enhanced disclosure

requirements include:

title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM,

extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety,

and permitting more than one measure of segment profit or loss to be reported under certain circumstances.

This change is effective for

fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

This change will apply retrospectively

to all periods presented.

Management is currently assessing the impact of the adoption of this ASU on the financials statements of the

(13) 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.

April 24, 2024, the Company terminated the Sales Agreement with Cantor and on April 26, 2024, the Company entered into a sales agreement

Sales Agreement”) pursuant to which the Company may issue and sell, from time to time, shares of

its common stock having an aggregate offering price of up to the amount the Company registered on an effective registration statement

pursuant to which the offering is being made.

The Company currently has registered $ 10,616,169 shares of common shares for sale under

the Sales Agreement, pursuant to the Registration Statement on Form S-3, as amended (File No.

333-275716) (the “Form S-3”),

through A.G.P.

as the Company’s sales agent.

may sell the Company’s 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, 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.

its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell

shares under the A.G.P.

Sales Agreement.

The Company will pay A.G.P.

3.0 % of the aggregate gross proceeds from each sale of shares under

Sales Agreement.

In addition, the Company has also provided A.G.P.

with customary indemnification rights.

shares of the Company’s common stock to be sold under the A.G.P.

Sales Agreement will be sold and issued pursuant to the Form S-3,

as amended, which was previously declared effective by the Securities and Exchange Commission, and the related prospectus and one or

more prospectus supplements.

Company is not obligated to make any sales of its common stock under the A.G.P.

Sales Agreement.

The offering of common stock pursuant

to the A.G.P.

Sales Agreement will terminate upon the termination of the A.G.P.

Sales Agreement as permitted therein.

The Company and

may each terminate the A.G.P.

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

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

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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

and analysis included in our Form 10-K, filed with the SEC on March 7, 2024, as well as the financial statements and related notes contained

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

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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 7, 2024.

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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).

January 12, 2024, we entered into a license agreement (the “Verity License Agreement”) for the development and commercialization

of our approved product, TLANDO®, an oral testosterone replacement therapy (“TRT”) comprised of testosterone undecanoate

(“TU”), with Verity Pharmaceuticals, Inc.

(“Verity” or our “Licensee”), pursuant to which we granted

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

Any FDA required post-marketing studies will also be the responsibility of our Licensee, Verity.

On March 28, 2022,

the FDA approved TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also known as

hypogonadism.

On June 7, 2022, our former commercial partner Antares (a wholly owned subsidiary of 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:

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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.

2203 for essential tremor and LPCN 2401 as an adjunct therapy to incretin mimetics as an aid for improved body composition in chronic

weight management.

In addition to our clinical development product candidates, we have assets for which we expect to seek partnerships

to enable further development including TLANDO for territories outside of North America, LPCN 1148 comprising a novel prodrug of testosterone

and testosterone laurate (“TL”), for the management of decompensated cirrhosis, 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;

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:

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LPCN 1154 and other CNS product candidates.

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

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

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

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with potential for outpatient use.

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

our Licensee in commercialization of our licensed oral TRT option.

We believe the TRT market needs a differentiated, convenient oral

We have exclusively licensed rights to TLANDO to Verity for commercialization of TLANDO in the U.S.

We plan to support

our Licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving

milestone and royalty payments associated with TLANDO commercialization as agreed to in the Verity License Agreement.

partnership(s) to continue the advancement of 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 are currently exploring partnerships for our liver programs LPCN 1144, our candidate for treatment

of non-cirrhotic NASH and LPCN 1148 for the management of decompensated cirrhosis including prevention of the recurrence of overt hepatic

encephalopathy, and LPCN 2401 as an adjunct therapy to incretin mimetics as an aid for improved body composition in chronic weight management,

and LPCN 1107, our candidate for prevention of pre-term birth.

We are also exploring the possibility of licensing LPCN 1021 (known as

TLANDO in the United States) and LPCN 1111 to third parties outside the United States and Canada, although no licensing agreement has

been entered into by the Company.

Pipeline Product Candidates

pipeline of clinical development candidates includes LPCN 1154 for PPD, LPCN 2101 for epilepsy, LPCN 2203 for essential tremor, LPCN

2401 as an aid for improved body composition in chronic weight management, and LPCN 1148, an androgen therapy for the management of

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

We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing of LPCN 1144,

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

LPCN 1148, LPCN 2401, LPCN 1107 as well as for the TRT assets (TLANDO and LPCN 1111) outside of the United States and

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.

Lip’ral-based TLANDO was approved by the

FDA in March 2022.

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

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Programs for CNS Disorders

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

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

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

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

As a novel drug class, NAS have received considerable

As a novel drug class, NASs 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

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

most advanced NAS candidate is LPCN 1154, a non-invasive, 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.

The company has completed clinical oral PK studies

including a pilot food effect study, and a pilot PK bridge study.

In addition, as a prelude to a LPCN 1154 pivotal study, a multi-dose

study was done confirming the dosing regimen for the pivotal study using the scaled up “to be marketed” formulation required

for NDA filing.

In March 2024, we completed enrollment and dosed the first cohort of patients in our pivotal PK study.

We expect to have

top line results from the pivotal study in the second quarter of 2024.

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

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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;

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

“baby blues” 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 NASs 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.

It has been hypothesized that the rapid perinatal

decrease in circulating levels of endogenous NASs may be involved in the development of PPD.

The first approved treatment option for PPD was an injectable containing endogenous NASs.

may persist long after child delivery.

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

Additionally, approximately 40% of women relapse in

subsequent pregnancies or on other occasions.

● Psychiatric

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.

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

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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

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

Serotonin Reuptake Inhibitors (“SSRIs”) have been the traditional first-line 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 mothers with moderate to severe depression prone to harmful actions.

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

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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.

In addition to Zulresso,

SAGE Therapeutics received FDA approval for zuranolone (brand name ZURZUVAE™) in August 2023 and Zurzuvae was launched commercially

in December 2023.

Zuranolone, a synthetic neuroactive steroid derivative, is an oral, once daily 14-day treatment for postpartum depression

and is the first oral medication approved by the FDA for the treatment of postpartum depression.

Per label, besides long terminal half-life

of approximately 19.7 to 24.6 hours and dosage modifications needed for concomitant use with CYP3A4 modulators, warnings and precautions

include CNS depressant effects, impaired ability to drive or engage in other potentially hazardous activities and embryo-fetal toxicity.

believe LPCN 1154 targets the current unmet need for robust, rapid relief with 48-hour treatment duration through a convenient oral therapy

candidate comprising bioidentical NASs with good tolerability.

NAS for Epilepsy

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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.

safety, tolerability, and efficacy of LPCN 2101, subject to resource prioritization.

Overview – Epilepsy

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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.)

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

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

Most hormones act as NAS and can thus modulate brain

Most hormones act as NASs and can thus modulate brain

excitability.

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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.

as well as the 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

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Moreover, these

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

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

S.Bangar et al.

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Reimers et al.

Oral Product for Management of Essential Tremor

2203 is an oral candidate for management of essential tremor comprising a bioidentical GABA modulating NAS.

We have successfully completed

oral pharmacokinetics with bioidentical GABA Modulating NAS and are planning to submit a protocol for a proof-of-concept phase 2 study

Overview - Essential Tremor

Tremor (“ET”) is one of the most common movement disorders in the United States, affecting an estimated 7 million in the

For ET patients, uncontrollable shaking of the hands, head, voice, or legs creates difficulty eating, dressing, writing, and pursuing

other day-to-day tasks.

The etiology of ET is largely unknown, but reduced GABA A receptor levels and decreased GABAergic activity

have been observed in ET.

ET is often associated with aging populations, ET can begin much earlier in life, with a progressive disease course that can eventually

necessitate a care partner.

Social anxiety and depressive symptoms can manifest in patients with ET as tremor severity increases, and

may negatively impact a patient’s ability to work and engage in hobbies.

In an interview study of ET patients and care partners,

the most common impacts on activities of daily living are pouring liquids and writing/typing (100%) and grooming/hygiene, drinking, dressing,

eating, and reading (80-85%).

Overall, 90% of participants noted the emotional impact of ET, with 75% reporting tremor-related worry

only FDA approved pharmacological treatment for ET was approved more than 50 years ago, and the majority of patients with ET experience

a sub-optimal response with standard-of-care treatments, highlighting numerous and compelling unmet needs in care such as daytime efficacy

and improved tolerability, a PRN (pro re nata) or “as needed” option, and a superior benefit-to-risk profile.

Louis ED, Ottman R.

Tremor Other Kyperkinet Mov (NY).

Gerbasi et.al.

Patient experiences in essential tremor:

Mapping functional impacts to existing measures using qualitative research.

TRT Franchise – TLANDO and LPCN 1111 (TLANDO XR)

An Oral Product for Testosterone Replacement Therapy

previously described, under the Verity License Agreement, we granted to Verity in January 2024 an exclusive, royalty-bearing, sublicensable

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

and Canada effective February 1, 2024.

received FDA approval on March 28, 2022.

Any FDA requirement to conduct certain post-marketing studies will be the responsibility of

our Licensee, Verity.

Proof-of-concept

for TLANDO was initially established in 2006, and subsequently TLANDO was subsequently 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

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.

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

TLANDO was commercially launched on June 7,

During the three months ended March 31, 2024 and 2023, we incurred royalty expense of approximately $5,000 and $4,000, respectively,

under the Antares license agreement.

TLANDO received full FDA approval, under the terms of the Verity License Agreement, Verity will need to assess the safety and effectiveness

of TLANDO in pediatric patients, as required by the Pediatric Research Equity Act.

The FDA may also require certain post-marketing studies

to be conducted which will also be the responsibility of Verity.

execution of the Verity License Agreement, Verity paid us an initial payment of $2.5 million which was received on signing of the License

Agreement and $5 million which was received on February 1, 2024.

Verity is also required to make an additional payment of $2.5 million

to us before January 1, 2025 and an additional payment of $1 million to us before January 1, 2026.

We are also eligible to receive milestone

payments of up to $259 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year and/or

development milestones with respect to products licensed by Verity under the Verity License Agreement.

In addition, we will receive tiered

royalty payments at rates ranging from 12% up to 18% of net sales of all products licensed under the Verity License Agreement in the

United States and Canada.

During the three months ended March 31, 2024, we incurred royalty expense of approximately $4,000 under the

Verity license agreement.

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

and Canada, 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 partially contingent upon 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.

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

previously described, under the terms of the Verity License Agreement, we have licensed the development and commercialization rights

to LPCN 1111 (TLANDO XR) in the U.S.

and Canada to Verity.

We will continue to explore the possibility of partnering LPCN 1111 with third

parties outside the United States and Canada, although no partnering agreement has been entered into by the Company.

No assurance can

be given that any license agreement outside North America 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 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

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.

All future development and commercialization of LPCN 1111 in the U.S.

and Canada will be the responsibility

of our Licensee, Verity.

Pipeline Candidates

continue to pursue opportunities for partnering arrangements for partnering and/or development arrangements for the continued development

and/or marketing of LPCN 1148, LPCN 1144, LPCN 2401, and LPCN 1107.

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.

we do enter into partnering arrangements, such arrangements may not be sufficient to successfully develop and commercialize these products.

Oral Product Candidate for the Management of Decompensated Cirrhosis

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(“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.

We are exploring the possibility of partnering with a third party for the development and/or marketing of LPCN 1148,

although no partnering agreement has been entered into by the Company.

No assurance can be given that any partnering agreement will be

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

conducted 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 Phase 2 POC study was a prospective, multi-center, randomized, placebo-controlled

study in male sarcopenic cirrhotic patients.

Subjects were initially randomized 1:1 to 1 of 2 arms.

The treatment arm was an oral dose

of LPCN 1148, and the second arm was a matching placebo.

There were no restrictions on patients with respect to background therapies,

including current standard of care, diet or exercise.

The primary endpoint was a 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

Total treatment was 52 weeks, with 24-week placebo-controlled treatment subjects receiving LPCN 1148 in the 28-week open-label

extension (“OLE”) phase of the study 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

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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.

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.

March 2024 we announced that 24-week L3-SMI increases were maintained through 52 weeks of LPCN 1148 intervention and that placebo patients

who switched to LPCN 1148 in the open label extension period of the study had increases in L3-SMI.

Furthermore, fewer overt hepatic encephalopathy

(“OHE”) events were observed in LPCN 1148 treated patients and time to first recurrent OHE event was longer for treated patients.

LPCN 1148 was well-tolerated, with AE rates and severities similar to placebo and fewer participants experienced serious or sever adverse

events when switched from placebo to LPCN 1148 and patients on therapy were hospitalized for fewer days.

We plan to request a Type C

meeting with the FDA to discuss the clinical development plan for LPCN 1148 in mid-2024.

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

Non-alcoholic

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

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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

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

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

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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.

are exploring the possibility of partnering with a third party for LPCN 1144, 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.

Overview – NASH

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

is an advanced state of non-alcoholic fatty liver disease (“NAFLD”) that 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.

disease is one of the leading 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.

NASH and NAFLD patients additionally suffer heightened cardiovascular risk and 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.

20% to 30% of the U.S.

population is estimated

to suffer from NAFLD, with a large proportion of that group, 15% to 20%, progressing to NASH, which lacks an effective therapy.

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

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.

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

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

Prespecified biopsy analyses

Pre-specified biopsy analyses

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

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forward with LPCN 1144.

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

The FDA acknowledged that the NDA submission of LPCN 1144 would be via the 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.

The FDA acknowledged that subjects 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 pathway.

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 the FDA for LPCN 1144 for 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.

An Adjunct Therapy to Incretin Mimetics, as an Aid for Improved Body Composition in Chronic Weight Management

2401 is an oral formulation of a proprietary combination of anabolic androgen receptor agonist and α-alpha tocopherol, an antioxidant

metabolic modifier.

Data from preclinical and clinical studies support the potential of LPCN 2401 in gaining lean mass while losing fat

As an adjunct therapy to incretin mimetics, LPCN 2401 has the potential to attenuate weight rebound, ameliorate loss of muscle

mass, improve muscle quality and functionality, amplify fat mass loss with improved body composition, maintain weight, prevent “fat

overshoot,” and accelerate muscle rebound post incretin mimetic discontinuation.

We plan to request a meeting with the FDA to discuss

the study design for a proof-of-concept phase 2 study for LPCN 2401.

We may explore the possibility of partnering 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.

Overview – Obesity Management

Approximately

74% of US adults age 20 and older are either obese or overweight, and an estimated 30% of the US adult population has a BMI ≥ 30 kg/m 2 .

Obesity is a chronic, relapsing health risk defined by excess body fat.

Excess body fat increases the risk of death and major comorbidities

such as type 2 diabetes, hypertension, dyslipidemia, cardiovascular disease, osteoarthritis of the knee, sleep apnea, and some cancers

(Caterson and Hubbard et al.

Calle and Thun et al.

Reportedly, ~24M (Flynn et al.

Morgan Stanley, February 27, 2024) obese

elderly are most vulnerable to losing muscle mass.

rapid weight loss observed with the approved weight management medications includes unwanted lean mass loss, up to 40% of the patient’s

total weight lost.

Moreover, discontinuation of these therapies frequently results in a rapid regain in weight.

Loss of lean mass has

multiple negative health implications including weakness/fatigue, lowered metabolism which can cause a regain in fat mass, declines in

neuromuscular function, potential effects on emotion and psychological states, and increased risk of injury.

recent studies showed that body composition, especially lean body mass (muscle) may play an independent role in survival of patients

with diseases such as cancer and cardiovascular diseases (DH Lee and EL Giovannucci, Exp Biol Med.

Therefore, a focus on body

composition in obesity management to sustainably lose fat mass while maintaining lean mass should be an essential goal.

is a significant unmet need for an oral, efficacious, muscle preserving/gaining option for chronic obesity/weight management that ameliorates

the loss of LM associated with GLP-1/GIP agonist treatment, resulting in a higher quality weight loss.

Moreover, there is a need for

a chronic long-term pharmacotherapy option to maintain weight upon cessation of incretin mimetic therapy, prevent fat/weight rebound

“overshoot” and minimize lag in muscle recovery to prevent collateral fattening.

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.

are exploring the possibility of partnering with a third party for the development and/or marketing of LPCN 1107, although no partnering

agreement has been entered into by the Company.

No assurance can be given that any partnering 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

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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.

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

The FDA stated that in light of the unmet need for

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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

date, we have not generated any revenues from product sales and do not expect to do so 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 March 31, 2024, we have generated $49.5 million in revenue under our various license

and collaboration arrangements and from government grants.

We have entered into the Verity License Agreement with the potential for revenue

from future milestones and royalties, but we may never generate revenues from any of our clinical or preclinical development programs

or licensed products as we may never succeed in obtaining regulatory approval or commercializing any of these product candidates.

and Development Expenses

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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.

our inception, we have spent approximately $150.1 million in research and development expenses through March 31, 2024.

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.

wind down of the 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,

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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

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

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

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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.

LPCN 2101, LPCN 2203, LPCN 2401, 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.

If we are successful in progressing LPCN 1154, LPCN 2101, LPCN 2203 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 2401, LPCN 1107 and

TLANDO and LPCN 1111 outside of North America.

expect to continue to incur significant research and development expenses in the future as we complete on-going clinical studies, including

the studies for our CNS product candidates 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, and LPCN

We are also exploring the possibility of licensing LPCN 1144, LPCN 1148, LPCN 2401 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.

finance, business development and administrative support functions.

Other general and administrative expenses include rent and utilities,

travel expenses, and professional fees for auditing, tax, legal, 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.

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

These fees include 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.

interest on minimum royalties under the Antares Licensing Agreement in 2023, and losses (gains) on our warrant 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 )

of the Three Months Ended March 31, 2024

following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:

Months Ended March 31,

Research and development expenses

General and administrative expenses

General and administrative

Interest and investment income

Interest expense

Gain on warrant liability

Gain on litigation settlement

Unrealized gain (loss) on

warrant liability

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

recognized revenue of $7.6 million primarily consisting of licensing revenue received from our Verity License Agreement during the three

months ended March 31, 2024, and revenue of $55,000 in licensing revenue during the three months ended March 31, 2023, respectively.

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.

decrease in research and development expenses during the three months ended March 31, 2024, as compared to the three months ended March

31, 2023 consists of an $853,000 decrease in contract research organization expense and outside consulting costs related to the completion

of our LPCN 1148 study in 2023, a $89,000 decrease in personnel related costs, a $60,000 decrease in LPCN 1111 costs, offset by a $542,000

increase in costs related to our LPCN 1154 clinical studies, a $128,00 increase in TLANDO manufacturing related costs, and a $44,000

increase in other research and development related costs.

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.

increase in general and administrative expenses during the three months ended March 31, 2024 as compared to the three months ended March

31, 2023 consists of a $521,000 increase in business development expenses and a $39,000 increase in other various general and administrative

These increases are offset by a $115,000 decrease in various administrative consulting fees, an $83,000 decrease in corporate

insurance expense, a $43,000 decrease in personnel salaries and benefits, and a $31,000 decrease in legal 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.

decrease in interest and investment income during the three months ended March 31, 2024 compared to interest and investment income during

the three months ended March 31, 2023 was due to lower cash and marketable investment securities balances, in addition to no longer having

imputed interest on the Antares License Agreement contract asset in the three months ended March 31, 2024.

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.

recorded a loss of approximately $40,000 and a gain of approximately $98,000 on warrant liability during the three months ended March

31, 2024 and 2023, respectively, related to the change in the fair value of outstanding common stock warrants issued in the November

2019 Offering.

The loss in 2024 resulted from an increase in the fair value of warrants mainly due to a higher stock price at the end

of the first quarter of 2024 compared to the stock price at the end of the fourth quarter of 2023.

The gain in 2023 was attributable

to a decrease in the fair value of warrants outstanding as of March 31, 2023 as compared to December 31, 2022, primarily due to the decrease

in our stock price at the end of the first quarter 2023 compared to the stock price at the end of the fourth quarter of 2022, in addition

to higher interest rates.

No common stock warrants from the November 2019 Offering were exercised during the three months ended March

31, 2024 or the three months ended March 31, 2023.

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.

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

and Capital Resources

2 unchanged sentences

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

research, pre-clinical and clinical development activities.

research, preclinical 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

LPCN 2203, LPCN 2401 and any other future product candidates, including continued research efforts.

of March 31, 2024, we had $24.6 million of unrestricted cash, cash equivalents and marketable investment securities compared to $22.0

million at December 31, 2023.

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.

January 12, 2024, we entered into the Verity License Agreement with Verity, pursuant to which we granted to Verity an exclusive, royalty-bearing,

sublicensable right and license to develop and commercialize our TLANDO product with respect to TRT in the U.S.

Upon execution

of the Verity License Agreement in January 2024 and upon transition of the commercialization of TLANDO from Antares to Verity in February

2024, Verity paid to us initial payments of $2.5 million and $5 million, respectively.

Verity has also agreed to make additional payments

to us of $2.5 million before January 1, 2025, and $1 million before January 1, 2026.

The Verity License Agreement also provides Verity

with a license to develop and commercialize TLANDO XR (LPCN 1111), the Company’s potential next generation, once daily oral product

candidate for testosterone replacement therapy comprised of testosterone tridecanoate (“TT”) in the U.S.

also eligible to receive milestone payments of up to $259 million in the aggregate, depending on the achievement of certain development

milestones and sales milestones in a single calendar year with respect to all products licensed by Verity under the Verity License Agreement.

In addition, we receive tiered royalty payments at rates ranging from 12% up to 18% of net sales of all products licensed to Verity in

the United States and Canada.

Our ability to realize benefits from the Verity License Agreement, including milestone and royalty payments,

is subject to a number of risks.

We may not realize milestone or royalty payments in anticipated amounts, or at all.

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.

pursuant to which we sold shares of our common stock, having registered up to $50.0 million for sale under the Sales Agreement, pursuant

to our Registration Statement on Form S-3 (the “Form S-3”), through Cantor as our sales agent.

We were not obligated to make

any sales of our common stock under the Sales Agreement.

During the three months ended March 31, 2024, we did not sell any shares of

our common stock under the Sales Agreement.

Since March 6, 2017 and as of March 31, 2024, we had sold 964,711 shares of our common stock

for $33.3 million pursuant to the Sales Agreement and had approximately $40.8 million available for sale under the Sales Agreement.

offering of our common stock pursuant to the Sales Agreement could terminate upon the termination of the Sales Agreement as permitted

therein at any time upon ten days’ prior notice, and on April 24, 2024, the Company terminated the Sales Agreement with Cantor.

On April 26, 2024, the Company entered into a sales agreement with A.G.P.

Sales Agreement”) pursuant to which

the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to the amount

the Company registered on an effective registration statement pursuant to which the offering is being made.

The Company currently has

registered $10,616,169 shares of common shares for sale under the Sales Agreement, pursuant to the Registration Statement on Form S-3,

as amended (File No.

333-275716) (the “Form S-3”), through A.G.P.

as the Company’s sales agent.

Company’s 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, 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.

will use its commercially reasonable efforts consistent with its normal trading and sales

practices and applicable law and regulations to sell shares under the A.G.P.

Sales Agreement.

The Company will pay A.G.P.

aggregate gross proceeds from each sale of shares under the A.G.P.

Sales Agreement.

In addition, the Company has also provided A.G.P.

with customary indemnification rights.

shares of the Company’s common stock to be sold under the A.G.P.

Sales Agreement will be sold and issued pursuant to the Form S-3,

as amended, which was previously declared effective by the Securities and Exchange Commission, and the related prospectus and one or

more prospectus supplements.

Company is not obligated to make any sales of its common stock under the A.G.P.

Sales Agreement.

The offering of common stock pursuant

to the A.G.P.

Sales Agreement will terminate upon the termination of the A.G.P.

Sales Agreement as permitted therein.

The Company and

may each terminate the A.G.P.

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

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.

through at least May 9, 2025 which include on-going clinical studies for LPCN 1154, and/or LPCN 2101 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 2203, LPCN 1148, LPCN 1144, LPCN 2401, LPCN 1111, and/or 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:

resources to fund our projected operating requirements through at least May 9, 2025, we will need to raise additional capital at some

point through the equity or debt markets or through additional out-licensing activities, either before or after May 9, 2025, to support

our operations.

If we are unsuccessful in raising additional capital as necessary, our ability to continue as a going concern will be

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 2203, LPCN 2401, LPCN 1148, LPCN

1144, 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 A.G.P.

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;

other related activities for all of our product candidates, including LPCN 1154, LPCN 2101

LPCN 2203, LPCN 2401, LPCN 1148, LPCN 1144, and LPCN 1107;

cost of manufacturing clinical supplies and establishing commercial supplies, of our product

36 unchanged sentences

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 )

following table provides a summary of our cash flows for the three months ended March 31, 2024 and 2023:

Months Ended March 31,

Cash provided

by (used in) operating activities

$ (3,928,057 )

Cash provided by investing activities

Cash provided by (used in) financing activities

Cash provided by (used in)

investing activities

Cash 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.

the three months ended March 31, 2024, net cash provided by operating activities was $2.4 million and during the three months ended March

31, 2023, net cash used in operating activities was $3.9 million.

cash provided by operating activities during the three months ended March 31, 2024, was primarily attributable to cash inflow from the

Verity License Agreement of $7.5 million which exceeded cash required to support ongoing operations, including research and development

expenses and general and administrative expenses of $4.4 million.

Net cash used in operating activities during the three months ended

March 31, 2023, was mainly attributable to activities primarily related to our Phase 2 POC study in male subjects with cirrhosis with

LPCN 1148 and clinical studies related to LPCN 1154.

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.

the three months ended March 31, 2024, net cash used in investing activities was $4.1 million and during the three months ended March

31, 2023, net cash provided by investing activities was $5.6 million.

cash used in investing activities during the three months ended March 31, 2024, was primarily the result of purchases of marketable

investments securities, net of $4.1 million.

Net cash provided by investment activities for the three months ended March 31, 2023,

was primarily the result of the maturity of marketable investment securities, net of $5.6 million.

There were no capital

expenditures during the three months ended March 31, 2024, and approximately $4,000 in capital expenditures during the three months

ended March 31, 2023.

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.

the three months ended March 31, 2024 and 2023, net cash used in financing activities was approximately $8,000 and $6,000, respectively.

cash used in financing activities during the three months ended March 31, 2024 and 2023 was related to costs associated with our ATM

offering with Cantor.

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

8 unchanged sentences

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.

generally accepted accounting principles (US GAAP).

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.

We concluded that licensing revenue recognized in conjunction with the Verity License Agreement met the requirements

under ASC 606, Revenue from Contracts with Customers.

We evaluate the measure of progress each reporting period and, if necessary, adjust

the measure of performance and related revenue recognition.

License revenue from payments to be received in the future will be recognized

when it is probable that we will receive license payments under the terms of the Verity License Agreement.

There have been no significant and material changes in our critical accounting policies during the three

months ended March 31, 2024, 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 7, 2024.

Standards Issued Not Adopted

November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic

Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280.

The enhanced disclosure

requirements include:

title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM,

extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety,

and permitting more than one measure of segment profit or loss to be reported under certain circumstances.

This change is effective for

fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

This change will apply retrospectively

to all periods presented.

Management is currently assessing the impact of the adoption of this ASU on the financials statements of the

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