Part I - Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Eton Pharmaceuticals reported its first revenues of **$0.5 million** in Q1 2019, with a net loss of **$7.4 million** primarily due to increased R&D expenses, and total assets decreasing to **$23.0 million** [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to **$23.0 million** as of March 31, 2019, primarily due to a decline in cash, while total liabilities increased to **$3.8 million**, leading to a decrease in stockholders' equity Condensed Balance Sheet Data (in thousands) | Account | March 31, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $19,584 | $26,735 | | Total current assets | $21,527 | $27,502 | | Total assets | $23,017 | $28,327 | | **Liabilities & Equity** | | | | Accounts payable | $3,208 | $1,421 | | Total current liabilities | $3,656 | $2,024 | | Total liabilities | $3,775 | $2,024 | | Accumulated deficit | $(53,278) | $(45,868) | | Total stockholders' equity | $19,242 | $26,303 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) First-quarter 2019 revenue was **$0.5 million**, but net loss increased to **$7.4 million** due to a substantial rise in research and development expenses to **$6.5 million** Condensed Statements of Operations (in thousands, except per share amounts) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Revenues | $500 | $— | | Research and development | $6,465 | $1,274 | | General and administrative | $1,589 | $1,690 | | Total operating expenses | $8,054 | $2,964 | | Loss from operations | $(7,554) | $(2,964) | | Net loss | $(7,410) | $(3,018) | | Net loss per share | $(0.42) | $(1.05) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$6.8 million** in Q1 2019, leading to a **$7.2 million** decrease in cash and cash equivalents, ending at **$19.6 million** Condensed Statements of Cash Flows (in thousands) | Activity | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,767) | $(1,850) | | Cash used in investing activities | $(388) | $(91) | | Net cash provided by financing activities | $4 | $— | | **Change in cash and cash equivalents** | **$(7,151)** | **$(1,941)** | | Cash and cash equivalents at end of period | $19,584 | $11,215 | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's 505(b)(2) pathway focus, November 2018 IPO, cash sufficiency, first revenue from EM-100 rights sale, and various licensing and development commitments - The company is a specialty pharmaceutical firm focused on developing products via the FDA's 505(b)(2) pathway. It completed its IPO in November 2018, raising net proceeds of **$21.96 million**[18](index=18&type=chunk)[19](index=19&type=chunk) - Management believes its cash and cash equivalents of **$19.6 million** as of March 31, 2019, are sufficient to fund operations for at least the next twelve months[21](index=21&type=chunk) - First-ever revenue of **$500,000** was recognized in Q1 2019 from an upfront payment from Bausch Health for the sale of EM-100 product rights. The agreement also includes potential future milestones and royalties[60](index=60&type=chunk) - The company entered into several licensing agreements in early 2019, including for ET-104 with Liqmeds Worldwide and for ET-202 and ET-203 with Sintetica SA, involving upfront payments and future milestone/royalty obligations[123](index=123&type=chunk)[126](index=126&type=chunk) - Subsequent to the quarter end, on May 6, 2019, the company sold its rights to the CT-100 product to its former parent company, Harrow Health, for potential future milestones and royalties[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's 505(b)(2) pathway focus, increased Q1 2019 net loss of **$7.4 million** due to higher R&D expenses, first revenue of **$0.5 million**, and increased cash used in operations - The company's strategy is to develop low-risk product candidates using the 505(b)(2) pathway, with four candidates already submitted to the FDA for review[134](index=134&type=chunk)[135](index=135&type=chunk) Research and Development Spending by Product (in thousands) | Product candidate | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | DS-200 | $1,656 | $190 | | DS-300 | $559 | $65 | | EM-100 | $96 | $605 | | ET-202 | $2,000 | $— | | ET-203 | $1,000 | $— | | ET-104 | $350 | $— | | Other products | $158 | $93 | | Indirect expenses | $637 | $256 | | **TOTAL** | **$6,465** | **$1,274** | - The increase in cash used in operating activities to **$6.8 million** in Q1 2019 from **$1.9 million** in Q1 2018 was primarily due to higher operating losses from increased product candidate licensing and development activity[143](index=143&type=chunk) - The company's first revenue of **$500,000** resulted from the sale of EM-100 product rights to Bausch Health, which includes potential future commercial milestones up to **$2.5 million** and royalties[147](index=147&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on cash and equivalents, deemed immaterial, with no foreign currency risk or hedging activities - The company's primary market risk is interest rate risk on its cash and cash equivalents[164](index=164&type=chunk) - Management does not believe there is any material exposure to interest rate risk, and the company has no exposure to foreign currency risk[164](index=164&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2019, the company's disclosure controls and procedures were effective[167](index=167&type=chunk) - No changes occurred during the quarter that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[169](index=169&type=chunk) Part II - Other Information [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings - None[171](index=171&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2018 Annual Report on Form 10-K - There have been no material changes in the risk factors included in the 2018 10-K[171](index=171&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=29&type=section&id=Other%20Items) The company reported no unregistered equity sales, no defaults on senior securities, and no mine safety disclosures or other information - Item 2: Unregistered Sales of Equity Securities and Use of Proceeds - None[172](index=172&type=chunk) - Items 3, 4, and 5 are all 'Not applicable'[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) The report lists various asset purchase and licensing agreements as exhibits, along with required CEO and CFO certifications - Exhibits filed include agreements with Bausch Health, Sintetica SA, Liqmeds Worldwide, Harrow Health, and Eyemax LLC, all dated in 2019[179](index=179&type=chunk) - Certifications by the CEO and CFO pursuant to Sarbanes-Oxley Sections 302 and 906 are included as exhibits[179](index=179&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |------------------------------------------------------------------------------------------|-----------------------------------------------------| | FOR THE TRANSITION PERIOD F ...