[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For the three months ended March 31, 2019, Lipocine Inc. reported a **net loss of $3.2 million**, compared to a **net loss of $2.7 million** for the same period in 2018, ending the quarter with **$13.2 million** in cash, cash equivalents, and restricted cash, an increase primarily driven by proceeds from an ATM stock offering and a debt agreement, with total assets at **$23.0 million** Condensed Consolidated Balance Sheets Balance Sheet Summary (as of March 31, 2019) | Account | March 31, 2019 (USD) | December 31, 2018 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $8,222,103 | $8,077,539 | | Restricted cash | $5,000,000 | $5,000,000 | | Marketable investment securities | $9,300,338 | $7,173,037 | | **Total Assets** | **$22,989,108** | **$20,851,953** | | **Liabilities & Equity** | | | | Total liabilities | $10,437,414 | $11,418,280 | | Total stockholders' equity | $12,551,694 | $9,433,673 | | **Total Liabilities & Equity** | **$22,989,108** | **$20,851,953** | Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Summary (Three Months Ended March 31) | Account | 2019 (USD) | 2018 (USD) | | :--- | :--- | :--- | | License revenue | $0 | $428,031 | | Research and development | $1,949,321 | $1,377,527 | | General and administrative | $1,175,927 | $1,687,490 | | **Operating loss** | **($3,125,248)** | **($2,636,986)** | | **Net loss** | **($3,224,472)** | **($2,719,971)** | | **Basic and Diluted loss per share** | **($0.14)** | **($0.13)** | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Three Months Ended March 31) | Activity | 2019 (USD) | 2018 (USD) | | :--- | :--- | :--- | | Cash used in operating activities | ($3,002,879) | ($3,746,211) | | Cash used in investing activities | ($2,082,438) | ($903,225) | | Cash provided by financing activities | $5,229,881 | $10,000,000 | | **Net increase in cash** | **$144,564** | **$5,350,564** | Notes to Condensed Consolidated Financial Statements - The company entered into a **$10.0 million** Loan and Security Agreement with Silicon Valley Bank in January 2018, bearing interest at Prime + **1%**. As of March 31, 2019, the company is required to maintain **$5.0 million** of restricted cash as collateral until TLANDO is approved by the FDA[34](index=34&type=chunk)[35](index=35&type=chunk) - During Q1 2019, the company sold **2,843,467 shares** of common stock through its "at the market" (ATM) offering agreement with Cantor Fitzgerald & Co., generating aggregate gross proceeds of **$6.2 million** and net proceeds of **$6.1 million**[46](index=46&type=chunk)[48](index=48&type=chunk) - A shareholder derivative complaint was filed against certain current and former officers and directors on February 15, 2019, alleging breaches of fiduciary duty related to statements about the TLANDO New Drug Application (NDA) The company intends to defend itself vigorously[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion focuses on addressing the FDA's Complete Response Letter for TLANDO, with plans to resubmit the NDA in May 2019, highlighting progress in its pipeline, particularly with LPCN 1144 for NASH, noting R&D expenses increased to **$1.9 million** in Q1 2019 from **$1.4 million** in Q1 2018 due to the TLANDO ABPM study, while G&A expenses decreased, and the company raised **$6.1 million** net proceeds from its ATM offering, believing existing capital is sufficient through at least March 31, 2020 Overview of Our Business - Lipocine is a pharmaceutical company focused on developing products for metabolic and endocrine disorders using its proprietary oral drug delivery technology[74](index=74&type=chunk) - The most advanced product candidate is TLANDO™, an oral testosterone replacement therapy (TRT) The company received a Complete Response Letter (CRL) from the FDA in May 2018, identifying four deficiencies that need to be addressed before potential approval[74](index=74&type=chunk) - The company has incurred losses in most years, with an accumulated deficit of **$141.3 million** as of March 31, 2019 The net loss for Q1 2019 was **$3.2 million**[78](index=78&type=chunk) Our Product Candidates - **TLANDO:** Following a second CRL, the company completed an Ambulatory Blood Pressure Monitoring (ABPM) study and a definitive phlebotomy study to address FDA deficiencies An NDA resubmission was expected in May 2019[87](index=87&type=chunk) - **LPCN 1144 (NASH):** A Proof-of-Concept liver imaging study showed substantial liver fat reductions in hypogonadal males at risk for NASH The company received IND clearance and is initiating a Phase 2 clinical study[113](index=113&type=chunk)[114](index=114&type=chunk) - **TLANDO XR (LPCN 1111):** A next-generation, once-daily oral TRT candidate that has completed Phase 2 testing Further pre-clinical or clinical trials may be required before initiating a Phase 3 study[75](index=75&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) - **LPCN 1107 (Preterm Birth):** An oral candidate for preventing preterm birth While an End-of-Phase 2 meeting with the FDA is complete, initiation of a Phase 3 study is not anticipated in 2019 due to capital constraints, unless the product is out-licensed[124](index=124&type=chunk) Results of Operations Comparison of Operations (Three Months Ended March 31) | Account | 2019 (USD) | 2018 (USD) | Variance (USD) | | :--- | :--- | :--- | :--- | | License revenue | $0 | $428,031 | ($428,031) | | Research and development expenses | $1,949,321 | $1,377,527 | $571,794 | | General and administrative expenses | $1,175,927 | $1,687,490 | ($511,563) | - R&D expenses increased primarily due to costs for the TLANDO ABPM study[140](index=140&type=chunk) - G&A expenses decreased mainly due to lower personnel costs, including a reduction in the commercial sales and marketing team compared to 2018[141](index=141&type=chunk) Liquidity and Capital Resources - As of March 31, 2019, the company had **$17.5 million** in unrestricted cash, cash equivalents, and marketable securities, plus **$5.0 million** in restricted cash[144](index=144&type=chunk) - In Q1 2019, the company raised net proceeds of approximately **$6.1 million** from its ATM offering and made **$833,000** in debt principal repayments[160](index=160&type=chunk) - Management believes existing capital resources are sufficient to meet projected operating requirements through at least March 31, 2020, but additional capital will be needed to support long-term development and potential commercialization[150](index=150&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company's primary market risk exposure is to interest rate fluctuations, affecting interest income from its investment portfolio of high-quality, investment-grade securities and interest expense on its variable-rate **$10.0 million** loan from SVB, without using derivative financial instruments for speculative purposes - The company's investment portfolio is subject to interest rate risk, but a hypothetical **10%** increase in rates is expected to have an insignificant impact on the fair value of its marketable securities[169](index=169&type=chunk) - The **$10.0 million** Loan and Security Agreement with SVB has a variable interest rate A **1%** increase in the prime rate would result in a **$115,000** increase in future annual interest expense[170](index=170&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2019, the company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2019[172](index=172&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the most recent fiscal quarter[173](index=173&type=chunk) [PART II—OTHER INFORMATION](index=40&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is engaged in multiple legal matters, including ongoing patent litigation with Clarus Therapeutics, where Clarus is appealing a PTAB judgment that favored Lipocine, a separate lawsuit filed by Lipocine alleging Clarus's **JATENZO®** product infringes on six of its patents, and a shareholder derivative complaint filed against the company's management in February 2019 - On February 19, 2019, Clarus appealed a Patent Trial and Appeal Board (PTAB) judgment that granted Lipocine priority and canceled claims in a Clarus patent[175](index=175&type=chunk) - On April 3, 2019, Lipocine filed a lawsuit against Clarus, alleging that its product **JATENZO®** infringes on six of Lipocine's U.S. patents[177](index=177&type=chunk) - A shareholder derivative complaint was filed on February 15, 2019, against certain officers and directors, alleging breaches of fiduciary duty related to statements made about the TLANDO NDA filing[176](index=176&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company's primary risk is its dependence on the successful regulatory approval and commercialization of its lead product, TLANDO, which has received two Complete Response Letters from the FDA, facing significant competition in the testosterone replacement therapy market, including from the recently approved oral product **Jatenzo®**, with its NASH candidate LPCN 1144 in early development, and a history of significant operating losses necessitating future capital raises - The company's business depends primarily on the success of TLANDO, which has received two CRLs from the FDA and may not receive regulatory approval The NDA resubmission was expected in May 2019[179](index=179&type=chunk)[183](index=183&type=chunk) - The company faces substantial competition in the TRT market from established products and newly approved oral therapies like **Jatenzo®**, marketed by Clarus Therapeutics[191](index=191&type=chunk)[193](index=193&type=chunk) - LPCN 1144 for NASH is in a very early stage of development, and positive results from a small Proof-of-Concept study may not be indicative of success in larger, more rigorous clinical trials[197](index=197&type=chunk) - The company has a history of significant operating losses, with an accumulated deficit of **$141.3 million** as of March 31, 2019, and anticipates continued losses, which will require raising additional capital in the future[203](index=203&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None [Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable, the company reported no mine safety disclosures - None [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed in a report on Form 8-K during the fourth quarter that was not previously reported - None [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) The report lists the exhibits filed, which include certifications by the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as XBRL interactive data files - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906[209](index=209&type=chunk) - XBRL Instance Document and related taxonomy files were also submitted as part of the filing[209](index=209&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K 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 from ____ to ____ Commission File Number: 001-36357 LIPOCINE INC. (Exact name of registrant as specified in its charter) Delaware 99-0370688 (State or Other Jurisdiction of (IRS E ...