Eton Pharmaceuticals Inc

Previous wording

For the three months ended March 31, 2024, we had $7,966 in total revenue that generated a gross profit of $5,007. We had total revenue of $5,304 for the three-month period ended March 31, 2023 that generated a gross profit of $3,346 for the period. The increase was primarily due to increased sales volume of the Company's ALKINDI SPRINKLE® and Carglumic Acid products.

Current wording

For the three months ended June 30, 2024, we had $9,074 in total revenue that generated a gross profit of $5,626. We had total revenue of $11,997 for the three-month period ended June 30, 2023 that generated a gross profit of $9,682 for the period. The decrease was primarily due to a $5,500 sale of royalty interests to Azurity in June 2023 offset by increased sales volume of the Company's ALKINDI SPRINKLE® and Carglumic Acid products.

Previous wording

For the three months ended March 31, 2024, we incurred $651 of research and development (“R&D”) expenses as compared to the $535 for the same period in 2023. The increase was primarily due to increased expenses associated with ET-400 project development activities.

Current wording

For the three months ended June 30, 2024, we incurred $2,970 of research and development (“R&D”) expenses as compared to $1,125 for the same period in 2023. The increase was primarily due to increased expenses associated with ET-400 project development activities.

Previous wording

For the three-month periods ended March 31, 2024 and 2023, we incurred $5,156 and $5,345, respectively, of G&A expenses. The slight decrease in G&A expenses was mainly due to decreased employee-related expenses along with decreased legal and consulting expenses.

Current wording

For the three-month periods ended June 30, 2024 and 2023, we incurred $5,591 and $4,674, respectively, of G&A expenses. The increase in G&A expenses was mainly due to increased sales and marketing expenses, legal fees, and consulting expenses.

Previous wording

As of March 31, 2024, we had total assets of $30.8 million, cash and cash equivalents of $16.7 million and working capital of $9.0 million. We believe that our existing funding and revenues from our approved products will be sufficient for at least the next twelve months of our operations. However, our projected estimates for our product development spending, administrative expenses, and our working capital requirements could be inaccurate, or we may experience growth more quickly or on a larger scale than we expect, any of which could result in the depletion of capital resources more rapidly than anticipated and could require us to seek additional financing earlier than we expect to support our operations.

Current wording

As of June 30, 2024, we had total assets of $31.8 million, cash and cash equivalents of $17.7 million and working capital of $7.2 million. We believe that our existing funding and revenues from our approved products will be sufficient for at least the next twelve months of our operations. However, our projected estimates for our product development spending, administrative expenses, and our working capital requirements could be inaccurate, or we may experience growth more quickly or on a larger scale than we expect, any of which could result in the depletion of capital resources more rapidly than anticipated and could require us to seek additional financing earlier than we expect to support our operations.

Previous wording

The following table sets forth a summary of our cash flows for the three-month periods ended March 31, 2024 and 2023 (dollars in thousands):

Current wording

The following table sets forth a summary of our cash flows for the six-month periods ended June 30, 2024 and 2023 (dollars in thousands):

Previous wording

The increase in cash used in operating activities was primarily due to increased sales and gross profit from sales of our ALKINDI SPRINKLE® and Carglumic Acid products, offset by a $1,000 milestone payment related to 2023 ALKINDI SPRINKLE® sales and increased inventory purchases for ALKINDI SPRINKLE®, Carglumic Acid, Nitisinone, and PKU GOLIKE®. The increase in cash used in investing activities was due to a $1,868 payment related to the acquisition of the PKU GOLIKE® product license in March 2024. The increase in cash used in financing activities was primarily due to payments on the Company's long-term debt.

Current wording

The decrease in cash (used in) provided by operating activities was primarily due to a $5,500 sale of royalty interests to Azurity in June 2023, a $1,000 milestone payment related to 2023 ALKINDI SPRINKLE® sales in January 2024, and increased inventory purchases for ALKINDI SPRINKLE®, Carglumic Acid, Nitisinone, and PKU GOLIKE® in 2024. The increase in cash used in investing activities was due to a $1,868 payment related to the acquisition of the PKU GOLIKE® product license in March 2024. The increase in cash used in financing activities was primarily due to payments on the Company's long-term debt.

Previous wording

The Company accounts for stock-based compensation under the provisions of ASC 718 Compensation – Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards. Compensation expense is recognized over the period during which services are rendered by consultants and non-employees until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of our common stock and updated assumption inputs in the Black-Scholes option-pricing model (“BSM”).

Current wording

The Company accounts for stock-based compensation under the provisions of ASC 718 Compensation – Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards.