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 2023-10-01

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549

 FORM

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
 the fiscal year ended December 31, 2023

 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

INC.

 (Exact
name of registrant as specified in its charter)

 Delaware

 99-0370688

 (State
 or Other Jurisdiction of

 Incorporation
 or Organization)

 (IRS
 Employer

 Identification
 No.)

 Arapeen Drive, Suite 202,

 Salt
 Lake City, Utah

 84108

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

 801 - 994-7383

 (Registrant's
telephone number, including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of Each Class

 Trading
 Symbol(s)

 Name
 of Each Exchange on Which Registered

 Stock, par value $0.0001 per share

 LPCN

 The
 NASDAQ Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act.
Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes: No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§220.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 Outstanding
Shares

 The
aggregate market value of the common stock held by non-affiliates of the registrant was $ 25.6 million as of June 30, 2023. For purposes
of calculating the aggregate market value of shares of our common stock held by non-affiliates as set forth on the cover page of this
Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except for shares held by each of
our executive officers, directors and 10% or greater stockholders. However, this assumption should not be deemed to constitute an admission
that all executive officers, directors and 10% or greater stockholders are, in fact, affiliates of our company, or that there are not
other persons who may be deemed to be affiliates of our company. Further information concerning shareholdings of our officers, directors
and principal stockholders is included or incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.

 As
of March 5, 2024, the registrant had 5,315,830 shares of common stock outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE:

 None

 TABLE
OF CONTENTS

 Page

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 10-K Summary

 FORWARD-LOOKING
STATEMENTS

 THIS
ANNUAL REPORT ON FORM 10-K, IN PARTICULAR "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION," AND "ITEM 1. BUSINESS," CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, that involve risks and uncertainties.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that
does not directly relate to any historical or current fact. Forward-looking statements may refer to such matters as products, product
benefits, pre-clinical and clinical development timelines, clinical and regulatory expectations and plans, REGULATORY DEVELOPMENTS AND
REQUIREMENTS, THE RECEIPT OF REGULATORY APPROVALS, THE EXPECTATIONS FOR AND RESULTS OF CLINICAL TRIALS, PATIENT ACCEPTANCE OF LIPOCINE'S
PRODUCTS, MANUFACTURING AND COMMERCIALIZATION OF LIPOCINE'S PRODUCTS, anticipated financial performance, future revenues or earnings,
business prospects, projected ventures, new products and services, anticipated market performance, future expectations for liquidity
and capital resources needs and similar matters. Such words as "may", "will", "expect", "continue",
"estimate", "project", "intend", and "potential" and similar terms and expressions are
intended to identify forward looking statements. Forward-looking statements are not guarantees of future performance and our actual results
may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in Part I, Item 1A "Risk Factors" of this Form 10-K. Except as required by applicable
law, we assume no obligation to revise or update any forward-looking statements for any reason.

 There
are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking
statements contained in this Annual Report on Form 10-K. Such risks, uncertainties and other important factors include, among others,
the risks, uncertainties and factors set forth in "Risk Factors," and the following risks, uncertainties and factors:

 our
 and our licensee's plans to develop and commercialize any products or future product candidates;

 our
 ongoing and planned clinical trials;

 the
 timing of and our ability to obtain regulatory approvals or fast track or orphan drug designation, breakthrough designation or IND
 clearance for any future product candidates;

 our
 ability to monetize non-core product candidates;

 our
 estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

 the
 rate and degree of market acceptance and clinical utility of any products or future product candidates, if approved;

 significant
 competition in our industry;

 our
 intellectual property position;

 loss
 of key members of management;

 failure
 to successfully execute our strategy; and

 our
 failure to maintain effective internal controls.

 There
may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed
in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
You should evaluate all forward-looking statements made in this Annual Report on Form 10-K in the context of these risks and uncertainties.

 We
caution you that the risks, uncertainties and other factors referred to above may not contain all of the risks, uncertainties and other
factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that
we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in
the way expected. All forward-looking statements in this Annual Report on Form 10-K apply only as of the date made and are expressly
qualified in their entirety by the cautionary statements included in this Annual Report on Form 10-K. We undertake no obligation to publicly
update or revise any forward-looking statements to reflect subsequent events or circumstances.

 PART
I

 ITEM 1. BUSINESS

 Lipocine Inc. ("Lipocine" or the "Company")
is incorporated under the laws of the State of Delaware.

 We
are a biopharmaceutical company focused on leveraging our proprietary Lip'ral platform to develop differentiated products through
the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System ("CNS") disorders.
Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.
Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs. We have a portfolio of differentiated
innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone
supplementation for men and women.

 We
entered into a license agreement for the development and commercialization of our product candidate, TLANDO, an oral treatment indicated
for testosterone replacement therapy ("TRT") in adult males for conditions associated with a deficiency or absence of endogenous
testosterone (primary or hypogonadotropic hypogonadism) comprised of testosterone undecanoate ("TU"). On January 12, 2024,
we entered into a license agreement (the "Verity License Agreement") with Gordon Silver Limited ("GSL") and Verity
Pharmaceuticals, Inc. ("Verity" or our "Licensee"), pursuant to which we granted to Verity an exclusive, royalty-bearing,
sublicensable right and license to commercialize TLANDO for TRT in the U.S. and Canada. Any required post-marketing studies by the United
States Food and Drug Administration ("FDA") will also be the responsibility of our Licensee, Verity. On January 31, 2024,
our license agreement with former licensee, Antares Pharma, Inc. ("Antares"), was terminated and the transition of the U.S.
commercial rights for TLANDO from Antares to Verity was completed on February 1, 2024, for the distribution, marketing and sale of TLANDO.
The Verity License Agreement also provides Verity with a license to develop and commercialize LPCN 1111 (also referred to as TLANDO XR),
the Company's potential next generation, once daily oral product candidate for testosterone replacement therapy comprised of testosterone
tridecanoate ("TT"), in the U.S. and Canada.

 Additional clinical development pipeline candidates include: LPCN 1154
for postpartum depression ("PPD"); LPCN 2101 for epilepsy; LPCN 2203 for essential tremor; and 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 non-core assets for which we expect to seek partnerships to enable further development for which we do not
plan to devote significant resources to developing in the future. These non-core assets include TLANDO for territories outside of North
America, LPCN 1148 which we intend to explore partnering upon completion of the Phase 2 study, 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.

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

 Corporate
Strategy

 Our
goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip'ral drug delivery technology platform
to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders. The key components
of our strategy are to:

 Advance
LPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids ("NAS")
which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated
oral therapeutics. Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression ("PPD")
with potential for outpatient use.

 Support
our Licensee in commercialization of our licensed oral TRT option. We believe the TRT market needs a differentiated, convenient oral
option. We have exclusively licensed rights to TLANDO to Verity for commercialization of TLANDO in the U.S. and Canada and have also
exclusively licensed development and commercialization rights for LPCN 1111 in the U.S. and Canada to Verity. 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.

 Develop
partnership(s) to continue the advancement of non-core pipeline assets. We continuously strive to prioritize our resources in seeking
partnerships of our pipeline assets. 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, and (iii) 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) to third parties outside the United
States and Canada, although no licensing agreement has been entered into by the Company.

 Our
Development Pipeline Product Candidates

 Our pipeline of clinical development candidates includes LPCN 1154
for postpartum depression ("PPD"), LPCN 2101 for epilepsy, LPCN 1148, an androgen therapy for the management of cirrhosis
and LPCN 2203 for essential tremor. 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, LPCN 1148, and LPCN 1107 and for TRT assets (TLANDO and LPCN 1111) outside of the United States and Canada.

 Our
products are based on our proprietary Lip'ral drug delivery technology platform. 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
drug efficiently at the absorption site (gastrointestinal tract membrane) thus improving the absorption process and making the drug less
dependent on physiological variables such as dilution, gastro-intestinal pH and food effects for absorption. Lip'ral-based formulation
enables improved solubilization and higher drug-loading capacity, which can lead to improved bioavailability, reduced dose, faster and
more consistent absorption, reduced variability, reduced sensitivity to food effects, improved patient compliance, and targeted lymphatic
delivery where appropriate.

 Oral
Programs for CNS Disorders

 Some
preferred endogenous or naturally occurring NAS present in central nervous system act as positive allosteric modulators ("PAM")
of the GABA A receptor, the major biological target of the inhibitory neurotransmitter -aminobutyric acid ("GABA A").
To improve oral delivery of these modulators, several synthetic NAS derivatives of endogenous GABA A receptor PAMs, have been
developed for therapeutic use in the past few decades.

 We believe through utilization of our proprietary technology we may have
the ability to enable effective oral delivery of endogenous GABA A receptor PAMs which historically had been deemed to be not
orally bioavailable. As a novel drug class, NAS have received considerable attention because of their potential to treat various neuropsychiatric
conditions including depression, movement disorders, epilepsy, anxiety, and neurodegenerative diseases. We have conducted Phase 1 pharmacokinetic
("PK") studies for each of our three lead NAS candidates which have demonstrated promising PK results, safety, and tolerability,
and we will continue to evaluate additional undisclosed CNS-focused candidates.

 LPCN
1154: Product Candidate for PPD

 Our
most advanced NAS candidate is LPCN 1154, a non-invasive, oral formulation of the neuroactive steroid brexanolone which we are
developing for the treatment of PPD. The FDA 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 an oral PK study, a food
effect study, and a pilot PK bridge study of LPCN 1154, as a prelude to a pivotal study using the scaled up "to be
marketed" formulation required for NDA filing.

 PPD

 PPD
("Postpartum depression"), a type of major depressive disorder with onset either during pregnancy or within four weeks of
delivery, refers to depression persisting up to 12 months after childbirth. PPD can be clinically segmented by the severity of symptoms
and presence of a comorbidity, including epilepsy. Approximately 1 in 8 mothers suffers from PPD in the United States alone; this equates
to approximately 500,000 women being affected by PPD annually.

 Disease
Overview - PPD

 PPD
 is distinct from the "baby blues," a condition that up to 70% of all new mother's experience; "baby blues"
 tend to be short-lived emotional conditions that do not interfere with daily activities.

 Symptoms
 of PPD include hallmarks of major depression, including, but not limited to, sadness, depressed mood, loss of interest, change in
 appetite, insomnia, sleeping too much, fatigue, difficulty thinking/concentrating, excessive crying, fear of harming the baby/oneself,
 and/or thoughts of death or suicide.

 pregnancy, levels of endogenous NAS increase considerably along with levels of progesterone; however, they drop sharply postpartum.
 It has been hypothesized that the rapid perinatal decrease in circulating levels of endogenous NASs may be involved in the development
 of PPD. The first and only approved treatment option for PPD is an injectable containing endogenous NAS.

 Depression
 may persist long after child delivery. 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.

 Associated
Risk Factors

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

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

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

 Unmet
Medical Need

 We
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 choice for women with severe PPD requiring 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.

 Injectable brexanolone (Zulresso, SAGE Therapeutics) became
the first FDA-approved treatment for postpartum depression. However, numerous factors limit the utilization of injectable brexanolone
such as method of administration, cost, and safety concerns. 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.

 We believe LPCN 1154 targets the unmet need for robust rapid relief
with 48-hour treatment duration through a convenient oral treatment candidate comprising bioidentical NAS with good tolerability.

 LPCN
2101: NAS for Epilepsy

 We
are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy ("WWE"). We have completed pre-clinical
and Phase 1 studies for LPCN 2101 which demonstrated promising PK results, safety and tolerability. In July 2022 our IND was accepted
by the FDA for LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the
safety, tolerability, and efficacy of LPCN 2101 in 2024 subject to resource prioritization.

 Disease
Overview – Epilepsy

 Epilepsy
is defined by the 1) occurrence of at least two unprovoked seizures more than 24 hours apart, 2) occurrence of one unprovoked
seizure and a probability of further seizures occurring over the next 10 years, and/or 3) diagnosis of an epilepsy syndrome.
Patients with epilepsy are more likely to be comorbid with other conditions, including depression and anxiety. Patients 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.)

 Epilepsy
is a disorder of the brain that causes seizures, affecting the physical, mental, and social well-being of persons, and is associated
with a 2 to 3 times greater mortality rate compared with the general population. About 60-65% of epilepsy is idiopathic and about 30%
of patients are refractory (i.e., epilepsy not well managed with currently available Anti-Seizure Medications ("ASMs"). Epilepsy
is the most common neurological disorder during pregnancy.

 It
is estimated that approximately 900,000 child-bearing ("CB") age women suffer from active epilepsy in the U.S. Women of CB
age with epilepsy face many additional challenges due to hormonal influences on seizure activity and endocrine function throughout the
different phases of their reproductive cycles. Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency. Often,
these women experience hormonal and endogenous NAS imbalances, coupled with fluctuations in the blood levels of ASMs that impact control
of seizures, efficacy of oral contraceptives, any coexisting anxiety and/or depression and any associated sleep impairment. Epileptic
patients are 5-20 times more likely to develop depression.

 Clinical
segmentation can be categorized by epilepsy type, comorbidities and patient subgroups. Categorization of focal epilepsy, generalized
epilepsy, combined focal and generalized epilepsy, and unknown epilepsy can guide the choice of ASM. Special patient subgroups, including
WWE of CB age and elderly patients, require special care and management of epilepsy. Comorbidities such as depression and anxiety may
be co-treated with therapies that do not aggravate seizures and have no drug interaction with the ASM used for epilepsy. While lowest
effective dose and monotherapy are preferred, management of patients with epilepsy is focused on controlling seizures, avoiding adverse
events, and maintaining quality of life. Despite a wide range of ASMs available, about 30 % of all people with epilepsy still fail to
respond to treatment effectively. Women with epilepsy face specific challenges throughout their lifespan because of seizures, ASMs, and
hormonal fluctuations.

 Women
with epilepsy were once counseled to avoid pregnancy, but epilepsy is no longer considered a contraindication to pregnancy. Caregivers
for WWE in the preconception phase either intending to start a family (planning pregnancy) or using contraception to prevent an unplanned
pregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of ASMs and ASM-related risks
such as, among other risks, fetal-neonatal toxicity, contraception failure, and psychiatric side effects.

 Several
ASMs are known to have teratogenic effects on the developing fetus (converging evidence from registry studies indicates that teratogenic
risks are highest with valproate, followed by carbamazepine and topiramate). Other commonly prescribed ASMs, including older generation
agents, such as phenobarbital and phenytoin, have been associated with higher risks as compared with lamotrigine, levetiracetam, clonazepam
and gabapentin (Vajda et al., 2014; Voinescu and Pennell, 2015). Moreover, risks associated with ASMs are considerable early in pregnancy;
therefore, it is necessary that WWE of CB age undergo counseling, monitoring, and adjustment to the most appropriate ASM prior to becoming
pregnant. It is preferable that WWE of CB age discuss seizure control with their doctor for at least 6 months before conception and,
if possible, cease ASM therapy or use the lowest effective dose of a single anticonvulsant according to the type of epilepsy and the
fetal toxicity of the ASM. Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women who
are worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned. ASMs can reduce the efficacy of oral
contraceptives, compounding this problem.

 Complex,
multidirectional interactions between female hormones, seizures, and ASMs exist. Most hormones act as NAS and can thus modulate brain
excitability. Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK
interactions that modify the plasma levels of ASMs (Harden, 2008). The PK interactions between oral contraceptives and ASMs are bidirectional
(Johnston and Crawford, 2014). The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs.
Epilepsy is not a medical condition in which contraceptives are contraindicated. Contraceptive failure, possibly related to ASMs, may
be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women.

 Unmet
need to treat WWE in CB age

 It
is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S. Women of CB age with epilepsy face many
additional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of their
reproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making consideration
of newer pharmacological treatment development options important.

 Managing
uncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases. Therefore, uncompromised
ASM efficacy with acceptable variability and less or no drug-drug interactions achieved with lowest possible monotherapy dose to address
fetal toxicity concerns remain highly unmet needs. Moreover, control of seizures including prevention of breakthrough seizures is critical
when planning for pregnancy and also during pregnancy, as it can also lead to undesired falls or auto-accidents and compromise freedom
to drive.

 Select
ASMs have the potential to induce contraception failures, reproductive hormone imbalance, anxiety, and depression. There remains an unmet
need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns
as well as potential to treat associated comorbidities.

 While
over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE
of CB age. We believe our endogenous NASs as GABA A PAMs, while targeting the goal of seizure control, also have the potential
for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment. Moreover, these
oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE. (1)

 (1)
Ref: S.Bangar et al. Functional Neurology 2016; 31(3): 127-134; Reimers et al. Seizure. 2015 May; 28: 66-70.

 LPCN
1148: Oral Product Candidate for the Management of Decompensated Cirrhosis

 We
are currently evaluating LPCN 1148 comprising testosterone laurate ("TL") for the management of decompensated cirrhosis.
We believe LPCN 1148 targets unmet needs for subjects with cirrhosis including improvement in the quality of life of patients while on
the liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as hepatic encephalopathy
("HE"), and improvement in post liver transplant survival, including outcomes and costs.

 We
recently completed a Phase 2 proof of concept ("POC") study (NCT04874350) in male cirrhotic subjects 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 mortality. 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. In July 2023, we announced that the Phase 2 study met the study primary endpoint, increased skeletal muscle
index (L3-SMI) relative to placebo (P<.01), in patients with cirrhosis. The study also demonstrated improvements in clinical
outcomes such as prevention of new decomposition events including HE, rates of hospitalizations, and patient reported outcomes
("PROs"). LPCN 1148 was well-tolerated, with adverse event ("AE") rates and severities similar to placebo
and no mortality was noted in the LPCN 1148 treatment group, nor were there any cases of drug-induced liver injury.

 End
of study results are expected by the end of the first quarter of 2024. Possible outcomes of interest from the Phase 2 study include continuation
and/or extension of clinical outcomes observed after 24 weeks such as overall survival and new decompensation events (including HE and/or
ascites occurrences), rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as muscle mass,
body composition, myosteatosis (muscle fat), functional capacity changes such as liver frailty index ("LFI"), PROs, and biochemical
markers including hematocrit for anemia status, albumin, creatinine/kidney function, etc. We plan to request a Type C meeting with the
FDA to discuss the clinical development plan for LPCN 1148 in mid-2024.

 Disease
Overview – Cirrhosis

 There
are over 2 million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S. and nonalcoholic
fatty liver disease is the most rapidly increasing indication for liver transplant. 62% of those on the liver transplant ("LT")
waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues to increase. Each year about half
of the approximately 17,000 people in U.S. on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed
from the list because they were "too sick to transplant."

 Liver
cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands. Cirrhotic patients typically
have a years-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure move
the patient into the symptomatic phase (decompensated cirrhosis). Transition to decompensated cirrhosis is marked by clinical events
including ascites, encephalopathy, jaundice, and/or variceal hemorrhage. Decompensated subjects survive on average less than 2 years.
Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease ("NAFLD"), chronic hepatitis
B and C, primary biliary cirrhosis ("PBC"), primary sclerosing cholangitis ("PSC") and cryptogenic.

complications in cirrhotic patients may include: compromised liver function, portal hypertension, varices in GI tract with internal bleeding,
edema, ascites, hepatic encephalopathy, compromised immunity with post-transplant acute rejection risk, high sodium levels, increased
bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle disorder
in the form of sarcopenia, myosteotosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline phosphatase
("ALP"), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia,
sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and
infection risk leading to hospital admissions and possibly death.

 HE,
a significant decompensation event in patients with cirrhosis, is a brain dysfunction caused by liver insufficiency and/or portal systemic
shunting. Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such as ammonia are inadequately removed
from systemic circulation and travel to the brain, where they affect neurotransmission. This can cause episodes of HE, which may present
as alterations in consciousness, cognition, and behavior that range from minimal to severe. Overt HE occurs in 30% to 40% of patients
with cirrhosis at some point during the clinical course of their disease. As the burden of chronic liver disease and cirrhosis is increasing,
the frequency of HE is also increasing.

 LPCN
2203: Oral Product for Management of Essential Tremor

 About
Essential Tremor:

 Essential
Tremor ("ET") is one of the most common movement disorders in the United States, affecting an estimated 7 million in the U.S. 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 GABAA receptor levels and decreased GABAergic activity have been
observed in ET.

 While
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 or anxiety.

 The
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, PRN or "as needed use" option, and a superior benefit-to-risk
profile.

 LPCN
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
for ET in the first half of 2024. (1) (2)

 (1)
 Ref:
 Louis ED, Ottman R. Tremor Other Kyperkinet Mov (NY). 2014;4:259.

 (2)
 Ref:
 Gerbasi et.al. Patient experiences in essential tremor: Mapping functional impacts to existing
 measures using qualitative research. MDS 2023.

 Our
Partnership Pipeline Product Candidates

 We
continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148,
LPCN 1107, in addition to TLANDO and LPCN 1111 outside of the U.S. and Canada. 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.

 TLANDO:
An Oral Product for Testosterone Replacement Therapy

 As
previously described, under the Verity License Agreement, in January 2024 we granted to Verity 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. TLANDO
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 licensed in 2009 to Solvay Pharmaceuticals, Inc., which was
then acquired by Abbott Products, Inc. ("Abbott"). 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. If generic
versions of any such product are introduced, then royalties are reduced by 50%. TLANDO was commercially launched on June 7, 2022. During
the years ended December 31, 2023 and December 31, 2022, we incurred royalty expense of approximately $34,000 and $12,000, respectively,
resulting from net sales of TLANDO.

 Under
the Pediatric Research Equity Act ("PREA"), since TLANDO received full FDA approval, under the Verity Licensing Agreement,
Verity will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients. The FDA may
also require certain post-marketing studies to be conducted which will also be the responsibility of our Licensee, Verity.

 Upon
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 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% to up to 18% of net sales of TLANDO in the United States and Canada.

 We
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.

 LPCN
1144: An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of NASH

 We
are exploring the possibility of partnering LPCN 1144 to 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.

 Disease
Overview – NASH

 NASH
is a more advanced state of non-alcoholic fatty liver disease ("NAFLD") and can progress to a cirrhotic liver or liver failure,
require liver transplant, and can result in hepatocellular carcinoma/ liver cancer, and death. Progression of NASH to end stage liver
disease will soon surpass all other causes of liver failure requiring liver transplantation. Importantly, beyond these critical conditions,
NASH and NAFLD patients additionally suffer heightened cardiovascular risk and, in fact, die more frequently from cardiovascular events
than from liver disease. NAFLD/NASH is becoming more common due to its strong correlation with obesity and metabolic syndrome, including
components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure. In the U.S., 20% to 30% of the population
is estimated to suffer from NAFLD and 15% to 20% percent of this group progress to NASH, which is a substantially large population that
lacks effective therapy. NASH is a silent killer that affects millions in the U.S. Diagnoses have been on the rise and are expected to
increase dramatically in the next decade. Approximately 50% of NASH patients are in 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.

 The
critical pathophysiologic mechanisms underlying the development and progression of NASH include reduced ability to handle lipids, increased
insulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury. NASH patients have an excessive accumulation
of fat in the liver resulting primarily from a caloric intake above and beyond energy needs. A healthy liver contains less than 5% fat,
but a liver in someone with NASH can contain more than 20% fat. This abnormal liver fat contributes to the progression to NASH, a liver
necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure.

 Current
Status

 We
have completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects. The LiFT clinical study
was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal and
eugonadal male NASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score 4 with a 36-week treatment period. The
 LiFT clinical study enrolled 56 biopsy confirmed NASH male subjects. Subjects were randomized 1:1:1 to one of three arms (Treatment
A is a twice daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent
formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo).

 The
primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver
fat/marker end points post 12 weeks of treatment. Additionally, key secondary endpoints post 36 weeks of treatment included
assessment of histological change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF). The LiFT
clinical study was not powered to assess statistical significance of any of the secondary endpoints. Other important endpoints
included the following: change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and
inflammatory/fibrosis markers; as well as patient reported outcomes.

 Treatments
with LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, and
showed improvement of liver injury markers with no observed tolerability issues.

 Liver
biopsies were performed at baseline ("BL") and after 36 weeks of treatment ("EOS"). Prespecified biopsy analyses
included NASH Clinical Research Network ("CRN") scoring as well as a continuous paired ("Paired Technique") and
digital technique ("Digital Technique-Fibronest"). All biopsy analyses were performed on the same slides and the reads for
the 3 techniques were done independently. Analysis sets included the NASH Resolution Set (all subjects that have BL and EOS biopsy with
NASH at BL [NAS 4 with lobular inflammation score 1 and hepatocyte ballooning score 1 at BL] (n=37)), the Biopsy Set (all
subjects with baseline and EOS biopsies (n=44)), and the Safety Set (all randomized subjects (n=56)).

 Both
LPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of NASH resolution
with no worsening of fibrosis based on NASH CRN scoring. Additionally, both treatment arms showed substantial improvement of the observed
NASH activity in steatosis, inflammation, and ballooning.

the 36 weeks of treatment, LPCN 1144 was well tolerated with an overall safety profile comparable to placebo. Additionally, subjects
were given the option to have access to LPCN 1144 through an open label extension ("OLE") study. The extension study enabled
the collection of additional data on LPCN 1144 for up to a total of 72 weeks of therapy, as well as data for 36 weeks of therapy for
those subjects on placebo in the LiFT study. Key results from the OLE study are as follows:

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

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

 Observed
 liver histology improvements support further development

 In
November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic NASH. The Fast Track program is designed
to accelerate the development and expedite the review of products, such as LPCN 1144, which are intended to treat serious diseases and
for which there is an unmet medical need.

 We
had a written only response from FDA for a LPCN 1144 Type C meeting with the FDA in January 2022 to discuss the development path forward
with LPCN 1144. The FDA acknowledged that the NDA submission of LPCN 1144 would be via 505(b)2 regulatory pathway and agreed that no
additional non-clinical studies are needed to support an NDA submission. The FDA acknowledged that in the LiFT study subjects achieved
improvements in key components associated with NASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males and agreed
that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval 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 of 72 weeks.
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.

 LPCN
1111: A Next-Generation Long-Acting Oral Product Candidate for TRT

 As
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.

 LPCN
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. All future development and commercialization of LPCN 1111 in the U.S. and Canada will be the responsibility of our
Licensee, Verity.

 LPCN
1107: An Oral Product Candidate for the Prevention of Preterm Birth

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

 We
believe LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate ("HPC") product indicated for the
reduction of risk of PTB (delivery less than 37 weeks) in women with singleton pregnancy who have a history of singleton spontaneous
PTB. Prevention of PTB is a significant unmet need as approximately 11% of all U.S. pregnancies result in PTB, a leading cause of neonatal
mortality and morbidity.

 Current
Status

 We
have completed a multi-dose PK dose selection study in pregnant women. The objective of the multi-dose PK selection study was to assess
HPC blood levels in order to identify the appropriate LPCN 1107 Phase 3 dose. The multi-dose PK dose selection study was an open-label,
4-period, 4-treatment, randomized, single and multiple dose PK study in pregnant women with 3 dose levels of LPCN 1107 and the IM HPC
(Makena). The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately 16 to 19
weeks. Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner during
the first 3 treatment periods and then received 5 weekly injections of HPC during the fourth treatment period. During each of the LPCN
1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day
8. Following completion of the 3 LPCN 1107 treatment periods and a washout period, all subjects received 5 weekly injections of HPC.
Results from this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for all 3 LPCN 1107 doses
than for injectable HPC. Additionally, HPC levels as a function of daily dose were linear for the 3 LPCN 1107 doses. Also, unlike the
injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days.

 A
traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into
Phase 3. Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetings
with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107. However, these discussions may be updated based on recent
developments with Covis' Makena as described below. We have completed a food effect study to characterize the dosing regimen
for the pivotal study. We plan to submit a pivotal clinical study protocol to the FDA.

 The
FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care. Orphan designation qualifies Lipocine
for various development incentives, including tax credits for qualified clinical testing, and a waiver of the prescription drug user
fee when we file our NDA.

 Recent
Competition Update

 On
October 5, 2020, the FDA's Center for Drug Evaluation and Research ("CDER") proposed that Makena be withdrawn from
the market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence does not
show Makena is effective for its approved use.

 The
CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing ("NOOH") to withdraw approval
of Makena, for which AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company's position, recognizing
clinicians' decade-long use of treatment with Makena and the public health implications of withdrawing approval. The FDA Commissioner
held a public hearing with Covis October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product from
the market. On October 31, 2022, Covis approached the CDER and outlined a plan of orderly withdrawal which would set a withdrawal timeframe
sufficient for current patients to complete their courses of treatment. The CDER declined this proposal. On March 6, 2023, Covis announced
its plan to voluntarily withdraw Makena from the market and submitted a request to the CDER for a minimum 21-week wind-down. On April
6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions
of the drug, making it unlawful for the drug to be distributed in the US. The FDA stated that in light of the unmet need for a treatment
for preventing preterm birth and improving neonatal outcomes, it is imperative that the medical and scientific communities increase their
efforts to find effective treatments and stated their hope that the decision to withdraw Makena will help galvanize further research.
The FDA further stated their commitment to working together with patients, researchers, and drug developers to advance the development
of safe and effective therapies that are urgently needed as a treatment for the prevention of preterm birth.

 Research
and Development

 As
disclosed in our development pipeline, we continue to build a diversified multi-asset pipeline of novel therapies. In 2023 and 2022,
we spent $10.2 million and $8.6 million, respectively, on research and development.

 Competition

 Neuroactive
Steroids Market overview

 The
unique potential mechanism of action ("MOA") of NAS presents an opportunity to treat a variety of CNS disorders. Accordingly,
multiple NAS as GABA A receptor PAMs are in active development for varied indications. Some companies engaged in development
include SAGE Therapeutics, Inc., Marinus Pharmaceuticals, Praxis Precision Medicines, and Eliem Therapeutics.

 Postpartum
Depression

 SAGE
Therapeutics is currently marketing an injectable version of an endogenous neuroactive steroid, brexanolone, under the tradename of ZULRESSO, for treatment in postpartum depression ("PPD"). In August
2023, the FDA approved ZURZUVAE (zuranolone) as an oral, once-daily, 14-day treatment for PPD. ZURZUVAE became commercially available
in December 2023.

 Cirrhosis
Market Overview

 Decompensated
cirrhosis patients with sarcopenia exhibit significantly shorter overall survival than those without sarcopenia. There are no therapies
specifically approved for sarcopenia or decompensated cirrhosis. Currently, the only curative therapy for decompensated cirrhosis is
liver transplant; however, liver transplantation is very costly, limited by the supply of available donors, and has a high risk of post-operative
complications.

 Xifaxan
(rifaximin) is the only FDA-approved medicine indicated for the reduction in risk of overt hepatic encephalopathy (HE) recurrence in
adults, a decompensation event typically associated with liver cirrhosis.

 Currently,
there are no FDA approved drugs to treat secondary sarcopenia in decompensated cirrhosis beyond treatment of the underlying conditions.
Lipocine is a leader in pursuing treatment for subjects with decompensated cirrhosis with sarcopenia, however, there are candidates known
to be under development for cirrhosis related indication(s).

 GB
1211 (by Galecto), an oral galectin-3 inhibitor for advanced liver cirrhosis targeted for directly addressing fibrosis, targeted for
initiation of a long-term cirrhosis trial in the first half of 2024, is in development being assessed in patients with moderate-to-severe
cirrhosis (Child-Pugh classes B and C).

 Reformulated
Rifaximin SSD (by BAUSCH health) is in a Phase 3 study for Reduction of Early Decompensation in Cirrhosis with time to first occurrence
of hepatic encephalopathy as the primary endpoint. Reportedly, a new drug application ("NDA") is planned to be submitted
2026.

 Testosterone
Replacement Therapy Market Overview

 The
gel-based testosterone replacement products that are currently available include AbbVie's AndroGel, Lilly's Axiron
Topical Solution and Endo ' s Testim and Fortesta along with their respective authorized generics as well as the
equivalent generic versions of each. Transdermal patches include Allergan's Androderm. Intramuscular forms of testosterone
also exist although commercialized mostly in generic forms by multiple companies and in branded form as Aveed by Endo. Additionally,
Endo markets the buccal testosterone replacement therapy Striant and the Testopel implantable testosterone pellets, which it
acquired from Auxillium in 2015. Antares Pharma, Inc. markets a sub-cutaneous weekly auto-injector testosterone therapy, Xyosted.
Acerus Pharmaceuticals markets an intranasal testosterone therapy, NATESTO. Finally, Tolmar Pharmaceuticals markets an oral TRT,
JATENZO, which received FDA approval in March 2019 and Marius Pharmaceuticals markets an oral TU, K YZATREX,
which received FDA approval for treatment of those with Klinefelter's Syndrome on August 22, 2022.

 Currently,
intramuscular injections have the highest market share in the testosterone replacement market in terms of annual prescriptions. While
gels are also a widely used form of TRT, there is a risk of transference; additionally, the gels are messy to apply and have significant
compliance issues leading to high rates of discontinuance among patients. Additionally, certain intramuscular injections have the potential
to cause pulmonary embolisms as well as cause injection site reactions, scarring, pain and risk of infection in patients. We believe
a safe and effective oral therapy could potentially increase patient convenience and compliance, while eliminating the testosterone transference
risk associated with gels and injection site reaction of injectables.

 The
FDA has granted a therapeutic equivalence rating of AB to "generic" versions of approved products which have been approved
via a 505(b)(2) NDA. In July 2014, the FDA granted the AB rating to Perrigo's 1% testosterone gel drug product (NDA 203098) approved
in January 2013, and a BX rating to Teva's 1% gel drug product (NDA 202763) approved in February 2012. Each are versions of AbbVie's
AndroGel 1.0% and employed 505(b)(2) submissions citing AndroGel as their reference listed drugs. Teva's version was found to be
bioinequivalent to AndroGel, hence the BX rating. Upsher-Smith Laboratories also received approval for a version of Endo's Testim
(Vogelxo; NDA 204399) in June 2014 using the same pathway. In January of 2015, the FDA determined that Vogelxo is therapeutically
equivalent to Testim and received an AB rating. In August 2015, the FDA granted AB rating to Perrigo's 1.62% testosterone gel drug
product (NDA 204268) which also received FDA approval in August 2015. Lilly and Acrux's Axiron had patent expiry in February 2017.
On July 6, 2017, Acrux confirmed that a generic version of Axiron Topical Solution, 30 mg/1.5 mL (Testosterone Topical Solution,
30 mg/1.5 mL) has been launched in the United States by Perrigo Company plc. Acrux also confirmed the availability of an authorized generic
version of Axiron in the United States, through a marketing and distribution agreement between Lilly and Company and a leading authorized
generics company.

 Other
TRT Therapies in Development

 Recently
there has been increased interest in developing oral TRT's as well as testosterone therapies which are not considered testosterone
replacement and as such will need to achieve efficacy endpoints in addition to endpoints related to serum testosterone levels that are
required for testosterone replacement therapies.

 We
believe there remains a significant unmet need in TRT for a once-a-day convenient oral option. LPCN 1111 is targeted to meet this unmet
need.

 NASH
Market Overview

 There
are currently no medications approved for the treatment of NASH. However, various therapeutics are used off-label for the treatment of
NASH, including vitamin E (an antioxidant), insulin sensitizers (e.g., metformin, pioglitazone), antihyperlipidemic agents (e.g., gemfibrozil),
pentoxifylline and ursodeoxycholic acid. There are several product candidates in Phase 3 or earlier clinical or preclinical development
for the treatment of NASH, including FGF21 stimulants such as BIO89-100 (89bio), Efruxifermin (EFX; Akero Therapeutics), FGF19 Analog: Aldafermin
(NGM Biopharmaceuticals); FXR Agonists: PXL065 (Pxel);Vonafexor (EYP001) (Enyo Pharma:) Glucagon-like Peptide-1 (GLP-1) Agonist: Peroxisome
Proliferator-activated Receptor (PPAR) Regulator: Lanifibranor (Inventiva);THR-
Agonis:t VK2809 (Viking Therapeutics), and Resmetirom (Madrigal Pharmaceuticals).

 Additional
pharmaceutical and biotechnology companies with product candidates in development for the treatment of NASH include, Boehringer
Ingelheim GmbH, Bristol-Myers Squibb Company, Durect Corporation, Galectin Therapeutics Inc., Galmed Pharmaceuticals
Ltd., Immuron Ltd., Ionis Pharmaceuticals, Inc., Islet Sciences, Inc., MediciNova, Inc., MiNA Therapeutics,
NGM Biopharmaceuticals, Inc., Novo Nordisk A/S, NuSirt Sciences Inc., Viking Therapeutics, Inc. and Zydus Pharmaceuticals (USA) Inc.
In December 2022, Madrigal announced achievement of liver histological improvement endoints that the FDA proposed as reasonably likely
to predict clinical benefit from the pivotal Phase 3 MAESTRO-NASH clinical trial of resmetirom for the treatment of NASH and liver fibrosis.
Madrigal has submitted an NDA to the FDA and was granted Priority Review for Resmetirom for the treatment of non-cirrhotic NASH with
liver fibrosis and has been assigned a PDUFA date of March, 14, 2024.

 Hydroxyprogesterone
caproate, or HPC, Preterm Birth, or PTB, Market Overview

 PTB
is defined as delivery before 37 weeks of gestation. The only approved therapy for prevention of PTB in women with a prior history of
at least one preterm birth (approximately 145,000 pregnancies annually) which was a weekly intramuscular injection of HPC, marketed by
Covis under the brand name Makena, was pulled from the market effective April 6, 2023 because the PROLONG trial failed to verify
the clinical benefit of Makena. The FDA concluded that the available evidence does not show Makena is effective for its approved use
and 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.

 Intellectual
Property

 Drug
Delivery Technologies for Lipophilic Drug Substances

 Our
patent portfolio is directed to various types of compositions and methods for delivery of lipophilic drugs, which are drugs that are
soluble in lipids. Our FDA approved product, TLANDO, is an oral formulation of the lipophilic prodrug TU, utilizing our proprietary
technology for improved delivery of lipophilic therapeutic agents.

 As
of March 7, 2024, our intellectual property patent portfolio consists of various issued patents and patent applications related to Oral
TU, LPCN 1111, LPCN 1107, LPCN 1144/1148, and Neurosteroids/CNS treatments both in the U.S. and in multiple countries outside of the
U.S.

 We
also hold license rights in fields other than cough and cold, to 2 U.S. patents and 1 U.S. application (and related foreign patents and
applications) that we previously assigned to Spriaso LLC, which could be possibly used with future product candidates.

 Additionally,
we have 12 U.S. patents that we plan to list in the FDA Orange Book for TLANDO that are expected to expire between 2029 and 2041. If
we or our Licensee are marketing the TLANDO product at the time the patents expire and have no other issued U.S. patents covering the
product, then we will lose certain advantages that come with FDA Orange Book listing of patents and will no longer be able to prevent
others in the U.S. from practicing the inventions claimed by the 12 patents.

 We
expect to file new patent applications in the future to further cover various aspects of our products and product development.

 See
Item 3 – Legal Proceedings, for a discussion of intellectual property related legal proceedings.

 Government
Regulation

 The
Regulatory Process for Drug Development

 The
production and manufacture of our product candidates and our research and development activities are subject to regulation by various
governmental authorities around the world. In the United States, drugs and products are subject to regulation by the FDA. There are other
comparable agencies in Europe and other parts of the world. Regulations govern, among other things, the research, development, testing,
manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval
monitoring and reporting, marketing and export and import of products. Applicable law requires licensing and registration of manufacturing
and contract research facilities, carefully controlled research and testing of products, governmental review and/or approval of results
prior to marketing therapeutic products. Additionally, adherence to good laboratory practices, or GLP, good clinical practices, or GCP,
during clinical testing and current good manufacturing practices, or cGMP, during production is required. The system of new drug approval
in the United States is generally considered to be the most rigorous in the world and is described in further detail below under "United
States Pharmaceutical Product Development Process."

 United
States Pharmaceutical Product Development Process

 In
the United States, the FDA regulates pharmaceutical products under the Federal Food, Drug and Cosmetic Act and the regulations it implements.
The testing, production, sale, and promotion of pharmaceutical products are also subject to other federal, state and local statutes and
regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign
statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable United
States requirements at any time during the product development process, approval process or after approval, may subject an applicant
to administrative or judicial sanctions. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval,
a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions,
fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement
action could have a material adverse effect on us.

 It
takes many years for a typical experimental drug to go from concept to approval. The process required by the FDA before a pharmaceutical
product may be marketed in the United States generally includes the following:

 Completion
 of preclinical laboratory tests and animal studies. The latter often conducted according to GLPs or other applicable regulations,
 as well as synthesis and drug formulation development leading ultimately to clinical drug supplies manufactured according to cGMPs;

 Submission
 to the FDA of an IND, which must be submitted to the FDA and become effective before human clinical trials may begin in the United
 States;

 Performance
 of adequate and well-controlled human clinical trials according to the FDA's current GCPs, to establish the safety and efficacy
 of the proposed pharmaceutical product for its intended use;

 Submission
 to the FDA of an NDA for a new pharmaceutical product;

 Satisfactory
 completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess
 compliance with the FDA's cGMP to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical
 product's identity, strength, quality and purity;

 Potential
 FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA; and

 FDA
 review and approval of the NDA.

 The
lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require
the expenditure of substantial resources and FDA approval is inherently uncertain.

 Preclinical
Studies: Prior to preclinical studies, a research phase takes place which involves demonstration of target and function, design,
screening and synthesis of agonists or antagonists. Preclinical studies include laboratory evaluations of product chemistry, toxicity
and formulation, as well as animal studies to evaluate efficacy and activity, toxic effects, PKs and metabolism of the pharmaceutical
product candidate and to provide evidence of the safety, bioavailability and activity of the pharmaceutical product candidate in animals.
The conduct of the preclinical safety evaluations must comply with federal regulations and requirements including GLPs. The results of
the formal IND-enabling preclinical studies, together with manufacturing information, analytical data, any available clinical data or
literature as well as the comprehensive descriptions of proposed human clinical studies, are then submitted as part of the IND application
to the FDA.

 The
IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the IND on a clinical hold within that 30-day
time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The
FDA may also impose clinical holds on a pharmaceutical product candidate at any time before or during clinical trials due to safety concerns
or non-compliance. Accordingly, we cannot be certain that submission of an IND will result in the FDA allowing clinical trials to begin,
or that, once begun, issues will not arise that suspend or terminate such clinical trial.

 Clinical
Trials: Clinical trials involve the administration of the pharmaceutical product candidate to healthy volunteers or patients under
the supervision of qualified investigators, generally physicians not employed by the sponsor. Clinical trials are conducted under protocols
detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and
the parameters to be used to monitor subject safety. Each protocol must be submitted to the FDA if conducted under a U.S. IND. Clinical
trials must be conducted in accordance with the FDA's GCP requirements. Further, each clinical trial must be reviewed and approved
by an independent institutional review board, or IRB, or ethics committee at or servicing each institution at which the clinical trial
will be conducted. An IRB or ethics committee is charged with protecting the welfare and rights of trial participants and considers such
items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated
benefits. The IRB or ethics committee also approves the informed consent form that must be provided to each clinical trial subject or
his or her legal representative and must monitor the clinical trial until completed.

 Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:

 Phase
1 Clinical Trials: Phase 1 clinical trials are usually first-in-man trials, take approximately 1 to 2 years to complete and are generally
conducted on a small number of healthy human subjects to evaluate the drug's activity, schedule and dose, PKs and pharmacodynamics.
However, in the case of life-threatening diseases, such as cancer, the initial Phase 1 testing may be done in patients with the disease.
These trials typically take longer to complete and may provide insights into drug activity.

 Phase
2 Clinical Trials: Phase 2 clinical trials can take approximately 1 to 3 years to complete and are carried out on a relatively small
to moderate number of patients (as compared to Phase 3) in a specific indication. The pharmaceutical product is evaluated to preliminarily
assess efficacy, to identify possible adverse effects and safety risks, and to determine optimal dose, regimens, PKs, pharmacodynamics
and dose response relationships. This phase also provides additional safety data and serves to identify possible common short-term side
effects and risks in a larger group of patients. Phase 2 clinical trials sometimes include randomization of patients.

 Phase
3 Clinical Trials: Phase 3 clinical trials take approximately 2 to 5 years to complete and involve tests on a much larger population
of patients (several hundred to several thousand patients) suffering from the targeted condition or disease. These studies usually include
randomization of patients and blinding of both patients and investigators at geographically dispersed test sites (multi-center trials).
These trials are undertaken to further evaluate dosage, clinical efficacy and safety and are intended to establish the overall risk/benefit
ratio of the product and provide an adequate basis for product labeling. Generally, 2 adequate and well-controlled Phase 3 clinical trials
are required by the FDA for approval of an NDA or foreign authorities for approval of NDAs.

 Post-approval
studies, or Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience
from the treatment of patients in the intended therapeutic indication and may be required by the FDA as a condition of approval.

 Progress
reports detailing the results of the clinical trials must be submitted at least annually to the FDA, and written IND safety reports must
be submitted to the FDA and the investigators for serious and unexpected adverse events or for any finding from tests in laboratory animals
that suggests a significant risk for human subjects. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within
any specified period, if at all. The FDA or the sponsor or, if used, its data safety and monitoring board may suspend a clinical trial
at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health
risk. Similarly, an IRB or ethics committee can suspend or terminate approval of a clinical trial at its institution if the clinical
trial is not being conducted in accordance with the IRB's or ethics committee's requirements or if the pharmaceutical product
has been associated with unexpected serious harm to patients.

 Concurrent
with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry
and physical characteristics of the pharmaceutical product, as well as finalize a process for manufacturing the product in commercial
quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches
of the pharmaceutical product candidate and, among other things, must develop methods for testing the identity, strength, quality and
purity of the final pharmaceutical product. Additionally, appropriate packaging must be selected and tested, and stability studies must
be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life.

 U.S.
Pharmaceutical Review and Approval Process

 New
Drug Application: Upon completion of pivotal Phase 3 clinical studies, the sponsor assembles all the product development, preclinical
and clinical data along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical
product, proposed labeling and other relevant information, and submits it to the FDA as part of an NDA. The submission or application
is then reviewed by the regulatory body for approval to market the product. This process typically takes 8 months to 1 year to complete.
The FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data
or other data and information. Even if such data and information is submitted, the FDA may ultimately decide that the NDA does not satisfy
the criteria for approval. If a product receives regulatory approval, the approval may be limited to specific diseases and dosages or
the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require
that certain contraindications, warnings or precautions be included in the product labeling.

 Orphan
Drug Designation

 Under
the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally
a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United
States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug
for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be
requested before submitting an NDA. If the FDA grants orphan drug designation, the FDA then discloses publicly the identity of the therapeutic
agent and its potential orphan use. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory
review and approval process.

 If
a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation,
the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the
same drug for the same indication, except in very limited circumstances, for 7 years. Orphan drug exclusivity, however, could also block
the approval of one of our products for seven years if a competitor obtains approval of the same drug as defined by the FDA or if our
drug candidate is determined to be contained within the competitor's product for the same indication or disease.

 Priority Review

 Priority Review is a designation
for an NDA after it has been submitted to the FDA for review. Reviews for NDAs are designated as either "Standard" or "Priority."
A Standard designation sets the target date for completing all aspects of a review and the FDA taking an action on 90% of applications
(i.e., approve or not approve) at 12 months after the date it was submitted for drugs considered new molecular entities and at 10 months
after the date it was submitted for drugs considered non-new molecular entities. A Priority designation sets the target date for the FDA
action on 90% of applications at eight months after submission for drugs considered new molecular entities and at 6 months after submission
for drugs considered non-new molecular entities. A Priority designation is intended for those products that address unmet medical needs.

 Accelerated Approval

 Accelerated Approval or Subpart
H Approval is a program described in the NDA regulations that is intended to make promising products for life threatening diseases available
on the basis of evidence of effect on a surrogate endpoint prior to formal demonstration of patient benefit. A surrogate marker is a measurement
intended to substitute for the clinical measurement of interest, usually prolongation of survival in oncology that is considered likely
to predict patient benefit. The approval that is granted may be considered a provisional approval with a written commitment to complete
clinical studies that formally demonstrate patient benefit.

 Post-Approval
Requirements

 Any
pharmaceutical products for which we may receive FDA approval are subject to continuing regulation by the FDA, including, among other
things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy
information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and
complying with the FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising,
prohibitions on promoting pharmaceutical products for uses or in patient populations that are not described in the pharmaceutical product's
approved labeling (known as "off-label use"), industry-sponsored scientific and educational activities and promotional activities
involving the internet. Failure to comply with the FDA requirements can have negative consequences, including adverse publicity, enforcement
letters from the FDA, mandated corrective advertising or communications with doctors and civil or criminal penalties.

 The
FDA also may require post-marketing testing, known as Phase 4 testing, risk evaluation and mitigation strategies and surveillance to
monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.

 21 st
 Century Cures Act

 The
21 st Century Cures Act (Public Law No. 144-255) was enacted on December 13, 2016. This sweeping legislation makes significant
changes to the way that FDA approves new drugs and medical devices. Among other things, the legislation calls on the FDA to consider
new types of data, such as patient experience data, in its drug approval process. The legislation also permits drug manufacturers to
utilize new types of clinical trial designs in order to collect data in the drug approval process. The intent of many of the statute's
provisions are to speed the approval of new drugs and medical devices. Whether the 21 st Century Cures Act realizes these goals
will depend on the adoption of new FDA regulations, policy guidance and FDA approval practices, many of which the agency has not yet
proposed or issued.

 Other
Healthcare Laws and Compliance Requirements

 In
the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to
the FDA, including, but not limited, to the Centers for Medicare and Medicaid Services and other divisions of the United States government,
including the U.S. Federal Communications Commission, the Department of Health and Human Services, the U.S. Department of Justice and
individual U.S. Attorney offices within the Department of Justice, and state and local governments. For example, if a drug product is
reimbursed by Medicare, Medicaid, or other federal or state healthcare programs, our Company, including our sales, marketing and scientific/educational
grant programs, among others, must comply with federal healthcare laws, including, but not limited to, the federal Anti-Kickback Statute,
false claims laws, civil monetary penalties laws, healthcare fraud and false statement provisions and data privacy and security provisions
under the Health Insurance Portability and Accountability Act, or HIPAA, the Physician Payment Sunshine Act, and any analogous state
laws. If a drug product is reimbursed by Medicare or Medicaid, pricing and rebate programs must comply with, as applicable, the Medicaid
rebate requirements of the Omnibus Budget Reconciliation Act of 1990 ("OBRA"), and the Medicare Prescription Drug Improvement
and Modernization Act of 2003. Among other things, OBRA requires drug manufacturers to pay rebates on prescription drugs to state Medicaid
programs and empowers states to negotiate rebates on pharmaceutical prices, which may result in prices for our future products that will
likely be lower than the prices we might otherwise obtain. Additionally, the Patient Protection and Affordable Care Act as amended by
the Health Care and Education Reconciliation Act of 2010 (collectively, "ACA") substantially changes the way healthcare is
financed by both governmental and private insurers. Among other cost containment measures, ACA establishes: an annual, nondeductible
fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents; a new Medicare Part D coverage
gap discount program; and a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program. There
may continue to be additional proposals relating to the reform of the U.S. healthcare system, in the future, some of which could further
limit coverage and reimbursement of drug products. If drug products are made available to authorized users of the Federal Supply Schedule
of the General Services Administration, additional laws and requirements may apply.

 Additionally,
to the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which
may include, for instance, applicable post-marketing requirements, including fraud and abuse, privacy and transparency laws.

 Pharmaceutical
Coverage, Pricing and Reimbursement

 In
the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale
will depend in part on the availability of coverage and adequate reimbursement from third-party payers, including government health administrative
authorities, managed care providers, private health insurers and other organizations. In the United States, private health insurers and
other third-party payers often provide reimbursement for products and services based on the level at which the government (through the
Medicare or Medicaid programs) provides reimbursement for such treatments. Third-party payers are increasingly examining the medical
necessity and cost-effectiveness of medical products and services in addition to their safety and efficacy and, accordingly, significant
uncertainty exists as to the coverage and reimbursement status of newly approved therapeutics. In particular, in the United States, the
European Union and other potentially significant markets for our product candidates, government authorities and third-party payers are
increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products
and therapies, which has resulted in lower average selling prices. Further, the increased emphasis on managed healthcare in the United
States and on country and regional pricing and reimbursement controls in the European Union will put additional pressure on product pricing,
reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from
rules and practices of insurers and managed care organizations, judicial decisions and governmental laws and regulations related to Medicare,
Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general. As a result, coverage and adequate third-party
reimbursement may not be available for our products to enable us to realize an appropriate return on our investment in research and product
development.

 The
Inflation Reduction Act of 2022 (Pub. L. No. 117-169) was signed into law on August 16, 2022, and includes a number of provisions aimed
at lowering prescription drug costs and reducing government spending on drugs. This includes a requirement that the Department of Health
and Human Services negotiate a "maximum fair price" with drug manufacturers for certain single-source brand drugs or biologics
without generic or biosimilar competitors that are covered under Medicare Part D and Part B. This pricing will begin in 2026 for Medicare
Part D and 2028 for Medicare Part B. An excise tax is imposed on drug manufacturers that fail to comply with the required negotiation
process. In addition, the law requires drug manufacturers to pay a rebate to the federal government if the price for almost all drugs
covered under Medicare Part D (starting in 2022), and single-source drug or biologics covered under Medicare B (starting in 2023), increase
greater than the inflation rate. The rebate amount equals the number of drug units sold in Medicare multiplied by the amount the drug's
price exceeds the inflation-adjusted price. The law also modifies the Medicare Part D benefit structure to cap the amount beneficiaries
must spend on drug costs and increase the discounts manufacturers are required to pay. The Inflation Reduction Act of 2022 signals an
increased desire to control the prices and costs associated with pharmaceutical products. In recent years, state laws have been enacted to lower prescription drug costs and prices. In some states, such as
Colorado and Maryland, a drug affordability board was created to identify specific drugs that are particularly costly or otherwise create
affordability challenges. These drug affordability boards have authority to either implement or recommend upper payment limits for these
drugs. This legislation, as well as any future statutes
or regulations at the federal or state level, may impact reimbursement for our product candidates and may challenge our ability to realize
an appropriate return on our investment in research and product development.

 The
market for our product candidates for which we may receive regulatory approval will depend significantly on access to third-party payers'
drug formularies or lists of medications for which third-party payers provide coverage and reimbursement. The industry competition to
be included in such formularies often leads to downward pricing pressures on pharmaceutical companies. Also, third-party payers may refuse
to include a particular branded drug in their formularies or may otherwise restrict patient access to a branded drug when a less-costly
generic equivalent or other alternative is available. In addition, because each third-party payer individually approves coverage and
reimbursement levels, obtaining coverage and adequate reimbursement is a time-consuming and costly process. We would be required to provide
scientific and clinical support for the use of any product to each third-party payer separately with no assurance that approval would
be obtained, and we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products.
This process could delay the market acceptance of any of our product candidates for which we may receive approval and could have a negative
effect on our future revenues and operating results. We cannot be certain that our product candidates will be considered cost-effective.
If we are unable to obtain coverage and adequate payment levels for our product candidates from third-party payers, physicians may limit
how much or under what circumstances they will prescribe or administer them, and patients may decline to purchase them. This in turn
could affect our ability to successfully commercialize our products and impact our profitability, results of operations, financial condition,
and future success.

 Related
Party Transaction

 On
July 23, 2013, we entered into assignment/license and services agreements with Spriaso, an entity that is majority-owned by Mahesh V.
Patel, Gordhan Patel, John W. Higuchi, Dr. William I. Higuchi, and their affiliates. Mahesh V. Patel is our President and Chief Executive
Officer. Mr. Higuchi is a member of our Board of Directors and Gordhan Patel and Dr. Higuchi, former Board members, were each members
of our Board of Directors at the date the license and agreements were entered into.

 Under
the assignment agreement, we assigned and transferred to Spriaso all of our rights, title and interest in our intellectual property for
the cough and cold field. In addition, Spriaso was assigned all rights and obligations under our product development agreement with a
co-development partner. In exchange, we would be entitled to receive a potential cash royalty of 20% of the net proceeds received by
Spriaso, up to a maximum of $10 million. Spriaso also granted back to us an exclusive license to such intellectual property to develop
products outside of the cough and cold field. The assignment agreement will expire upon the expiration of all of Spriaso's payment
obligations thereunder and the expiration of all of the licensed patents thereunder. Spriaso has the right to terminate the assignment
agreement with 30 days written notice. We have the right to terminate the assignment agreement upon the complete liquidation or dissolution
of Spriaso, unless the assignment agreement is assigned to an affiliate or successor of Spriaso.

 Under
the services agreement, we agreed to provide facilities and up to 10% of the services of certain employees to Spriaso for a period of
time. The agreement to provide services expired in 2021; however, it may be extended upon written agreement of Spriaso and us. Additionally,
Spriaso filed its first NDA in 2014, and as an affiliated entity of Lipocine, it used up the one-time waiver of user fees for a small
business submitting its first human drug application to FDA.

 Employees

 As
of December 31, 2023, we had 17 full time employees and we also utilize the services of consultants on a regular basis. Twelve employees
are engaged in drug development activities and five are in general and administration functions and the majority of our employees work
out of our Salt Lake City facility. The Company continually evaluates the business need and opportunity and balances in house expertise
and capacity with outsourced expertise and capacity. Currently, we outsource substantial clinical trial work to clinical research organizations
and certain drug manufacturing to contract manufacturers. None of our employees are represented by labor unions or covered by collective
bargaining agreements and we consider our relations with our employees to be good.

 We
strive toward having a diverse team of employees and are committed to equality, inclusion and workplace diversity.

 Reverse Stock Split

 On May 10, 2023, our Board approved
a reverse stock split of 1-for-17. We filed the Amendment to its Certificate of Incorporation with the Secretary of the State of Delaware
on May 10, 2023, and the Amendment became effective at 5:00 pm Eastern Time on May 11, 2023. Our shares began trading on a split-adjusted
basis on the Nasdaq Capital Market commencing upon market open on May 12, 2021. The par value of the common stock and preferred stock
was not adjusted as a result of the reverse stock split. All common stock and per share amounts in the financial statements have been
retroactively adjusted for all periods presented to give effect to the reverse stock splits.

 Available
Information

 Our
website address is www.lipocine.com. We make available free of charge on the Investor Relations portion of our website, ir.lipocine.com,
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the Securities and Exchange Commission. The SEC maintains an internet website that contains
reports, proxy and information statements, and other information that we file electronically, which can be found at

 ITEM
1A. RISK FACTORS

 We
have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results
of operations and future growth prospects. Our business could be harmed by any of these risks. The risks and uncertainties described
below are not the only ones we face. The trading price of our common stock could decline due to any of these risks, and you may lose
all or part of your investment. In assessing these risks, you should also refer to the other information contained in this Annual Report
on Form 10-K, including our consolidated financial statements and related notes.

 Risk
Factors Summary

 Our
business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause
our actual results to be harmed, including risks regarding the following:

 Risks
Relating to Our Business and Industry

 the
 timelines of our clinical trials;

 the
 early stage of development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, LPCN 1111 and LPCN 1107;

 the
 early stage of development of our research and development programs and processes and the risk of competition;

 there
 can be no assurance as to our ability to file an NDA for LPCN 1154 for postpartum depression or our ability to utilize the streamlined
 approval pathway under 505(b)(2);

 the
 regulatory requirements for our product candidates and the possibility that regulatory approval will not be received;

 the
 commercial success of our licensed product candidate, TLANDO;

 the
 possibility that T-replacement therapies could be found to create, or could be perceived to create, health risks;

 any
 possible failure to obtain adequate healthcare reimbursement for our products;

 competition
 in the TRT market, including the entrance of generic TRTs into the market;

 our
 Licensee's ability to commercialize TLANDO may be limited;

 successful
 commercialization of our product candidates internally or through collaborators;

 the
 possibility that we may never receive regulatory approval to market our products outside the United States;

 the
 stringent government regulations concerning the clinical testing of our products;

 the
 market's acceptance of our products;

 physicians
 and patients using other products may not switch to our product;

 the
 possibility that regulatory agencies could find that we have improperly promoted off-label uses;

 any
 possible failure to comply with federal and state healthcare laws;

 our
 ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel;

 difficulties
 in managing the growth of the Company;

 re-importation
 of drugs from foreign countries into the United States by our competitors;

 any
 product liability claims;

 any
 failure to comply with the Controlled Substances Act;

 the
 defense and resolution of any litigation;

 cyber
 security risks;

 Risks
Related to Our Dependence on Third Parties

 our
 reliance on third-party contractors and service providers for the execution of some aspects of our development programs;

 our
 reliance on contract research organizations or other third parties to assist us in conducting clinical trials;

 our
 reliance on suppliers for the active and inactive ingredients for our products;

 our
 ability to establish successful collaborations for our products;

 Risks
Related to Ownership of Our Common Stock

 our
 stock price's reaction to the results and timing of clinical trials, regulatory and other decisions;

 the
 effectiveness of our internal control over financial reporting;

 the
 cost and expense to comply with the requirements of being a public company;

 the
 volatility of our share price;

 fluctuations
 in the value of our warrants outstanding from the November 2019 Offering;

 the
 possibility of delisting of our securities from the Nasdaq Capital Market;

 anti-takeover
 provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of
 Delaware law and our stockholder rights plan;

 the
 right of the holders of the common warrants issued in the November 2019 Offering to receive the Black Scholes value of the warrants
 in the event of a fundamental transaction;

 our
 decision not to pay dividends on our common stock;

 our
 management and directors' ability to exert influence over our affairs;

 volatility
 in the trading price of our common stock;

 any
 failure of securities or industry analysts to publish accurate research about our business;

 Risks
Relating to Our Financial Position and Capital Requirements

 our
 need for and ability to obtain substantial additional capital in the future;

 potential
 dilution to our existing stockholders from raising any additional capital;

 our
 inability to predict when we will generate product revenues or achieve profitability;

 our
 incurrence of significant operating losses;

 any
 fluctuation in our operating results;

 Risks
Relating to Our Intellectual Property

 our
 ability to protect our intellectual property;

 our
 ability to obtain additional protection under the Drug Price Competition and Patent Term Restoration Act;

 the
 possibility of incurring substantial costs as a result of litigation or other proceedings relating to patent and other intellectual
 property rights, or our inability to protect our rights to our products and technology;

 the
 cost and expense, and any unfavorable outcomes, resulting from any claims for infringing intellectual property rights of third parties;

 the
 fact that we do not have patent protection for our product candidates in a significant number of countries;

 our
 ability to comply with various procedural, document submission, fee payment and other requirements imposed by governmental patent
 agencies; and

 the
 possibility that we may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their
 former employers.

 Risks
Relating to Our Business and Industry

 The
timelines and costs of our clinical trials may be impacted by numerous factors and any delays may adversely affect our ability to execute
our current business strategy.

 Our
expectations regarding the success of our product candidates, including our clinical candidates and lead compounds, and our business
are based on projections which may not be realized for many scientific, business or other reasons. We therefore cannot assure investors
that we will be able to adhere to our current schedule. We set goals that forecast the accomplishment of objectives material to our success:
selecting clinical candidates, product candidates, failures in research, the inability to identify or advance lead compounds, identifying
target patient groups or clinical candidates, the timing and completion of clinical trials, and anticipated regulatory approval. The
actual timing of these events can vary dramatically due to factors such as available capital resources, slow enrollment of subjects in
studies, uncertainties in scale-up, manufacturing and formulation of our compounds, failures in research, the inability to identify clinical
candidates, failures in our clinical trials, requirements for additional clinical trials and uncertainties inherent in the regulatory
approval process and regulatory submissions. Decisions by our partners or collaborators may also affect our timelines and delays in achieving
manufacturing capacity. The length of time necessary to complete clinical trials and to submit an application for marketing approval
by applicable regulatory authorities may also vary significantly based on the type, complexity and novelty of the product candidate involved,
as well as other factors. In addition, the development of our product candidates will require significant capital resources and we may
not be able to raise sufficient additional capital to fund continued development. Further, we may choose to allocate available capital
resources to development of product candidates that do not ultimately achieve commercialization.

 LPCN
1154 is still in development and may not be further developed or achieve commercialization for a variety of
reasons.

 LPCN
1154 is still in development and we plan to conduct a pivotal trial in 2024. There can be no assurance as to the results of the pivotal
trial or the timing or completion of any NDA filing relating to LPCN 1154 for postpartum depression. In particular, there can be no assurance
that we are able to complete required trials in a timely manner or demonstrate efficacy or meet the requirements of a 505(b)(2) pathway
and we may be required to undertake additional clinical studies prior to filing an NDA for LPCN 1154. We are exploring the possibility
of partnering LPCN 1154 to a third party for commercialization, however we may not be able to identify potential partners or successfully
enter into partnership arrangements on terms favorable to us, if at all. If we are unable to successfully partner or otherwise develop
LPCN 1154, LPCN 1154 may never be successfully commercialized.

 LPCN
2101 is in a very early stage of development and may not be further developed for a variety of reasons.

 Our
oral NAS comprising program LPCN 2101 is in a very early stage of development and consequently the risk that we may fail to
commercialize LPCN 2101 and related products is high. We have only conducted Phase 1 clinical studies of LPCN 2101 and the ultimate
regulatory or technical success of the neuroactive steroids under investigation in these programs is uncertain. The current limited
pre-clinical and phase 1 results we have observed may not be replicated in larger studies, future PK, Phase 2, or pivotal studies with a potential "to be marketed formulation". We may not be able to further test in-clinic in a timely manner or at all due to other regulatory hurdles.

 In
addition, our oral NAS product candidate LPCN 2101 may not be effective in treating WWE or any other indications or may not have differentiation
from competitive products on the market or in development. We may expend significant resources before determining that these programs
are not viable candidates for regulatory approval and commercialization.

 LPCN
2203 is in an early stage of development and may not be further developed for a variety of reasons.

 Our
oral NAS comprising programs (including LPCN 2203) are in a very early stage of development and consequently the risk that we may fail
to commercialize LPCN 2203 and related products is high. We have only conducted Phase 1 clinical studies with the active pharmaceutical
ingredient in LPCN 2203 and the ultimate regulatory or technical success of the neuroactive steroids under investigation in these programs
is uncertain. The current limited pre-clinical and Phase 1 results we have observed may not be replicated in larger studies, future PK,
Phase 2, or pivotal studies. We may not be able to further test in-clinic in
a timely manner or at all due to other regulatory hurdles.

 In
addition, our oral NAS product candidate LPCN 2203 may not be effective in treating ET or may not have differentiation from competitive
products on the market or in development. We may expend significant resources before determining that these programs are not viable candidates
for regulatory approval and commercialization.

 LPCN
1148 is in a very early stage of development for management of liver cirrhosis in male patients and while there are no therapies specifically
approved by the FDA for secondary sarcopenia or cirrhosis beyond treatment of underlying conditions, there are candidates known to be
under development for cirrhosis related indication(s).

 LPCN
1148 is in a very early stage of development and consequently the risk that we may fail to commercialize or partner LPCN 1148 and related
products is high. This development program is susceptible to technical failures in future clinical studies and regulatory hurdles for
further testing and/or meeting the FDA's needs for NDA filing or approval. The result of the Phase 2 study may not be indicative
of ultimate success in a larger Phase 2/3 clinical study and, although we are exploring the possibility of partnering LPCN 1148 to a
third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into
partnership arrangements on terms favorable to us, if at all. While we believe there is a potential to gain Orphan Drug Designation for
an indication or condition in male liver cirrhosis, the FDA may not grant such designation which could adversely impact development or
the commercial potential of LPCN 1148.

 LPCN
1111 is in a very early stage of development and may not be further developed for a variety of reasons.

 LPCN
1111 is in a very early stage of development. We have completed a Phase 2a and Phase 2b study in hypogonadal men. Future studies may
not have clinical results that support continued development and/or a path towards regulatory approval and commercialization.

 In
addition, the active ingredient in LPCN 1111 has only been manufactured on a small scale. Further, our Licensee may choose not to engage
in further development of LPCN 1111 or, if developed, to effectively commercialize LPCN 1111 in the U.S. or Canada. In addition, the
anticipated Phase 3 program for an NDA filing for LPCN 1111 could be very long and expensive, and LPCN 1111 may never be successfully
further developed or commercialized.

 LPCN
1107 is in a very early stage of development and may not be further developed for a variety of reasons.

 LPCN
1107 is in a very early stage of development and consequently, although we are exploring the possibility of partnering LPCN 1107 to a
third party for further development and commercialization, we may not be able to identify potential partners or successfully enter into
partnership arrangements on terms favorable to us, if at all. If we are unable to successfully partner LPCN 1107, LPCN 1107 may never
be successfully commercialized. In particular, we have only conducted three Phase 1 clinical studies with this product candidate. Our
completed Phase 1 clinical studies may not be predictive of safety concerns that may arise in pregnant women or demonstrate that LPCN
1107 has an adequate safety profile to warrant further development. These factors can impact the timing of and our ability to continue
development or partner LPCN 1107.

 In
addition, a number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical
trials, even after achieving positive results in early-stage development. Accordingly, our results from our Phase 1a, our Phase 1b and
our multi-dose PK dose selection studies may not be predictive of the results we may obtain from further studies and trials.

 The
FDA has concluded that Makena, based on Makena's failed definitive PROLONG study, a competing product with the same active ingredient
and similar target indication, is ineffective and has withdrawn Makena from the market. It is entirely possible that any pivotal study
on LPCN 1107 may require a placebo-controlled trial design. Therefore, we and/or our partner may face significant challenges in patient
recruitment for a placebo-controlled trial, be faced with significant resource investment to conduct additional trials, and face potential
perceived risk of efficacy failure in a pivotal study resulting in no further development of LPCN 1107.

 LPCN
1144 is in a very early stage of development and may not be further developed for a variety of reasons.

 LPCN
1144 is in a very early stage of development and consequently the risk that we fail to commercialize LPCN 1144 and related products is
high. In particular, we have announced topline primary and key secondary endpoint results from our Phase 2 LiFT and open label
extension clinical studies.

 Although
our results from the LiFT and open label extension clinical study results were positive for NASH resolution with no worsening
of fibrosis, these results may not be indicative of ultimate success in a larger Phase 2/3 clinical study with required FDA endpoints
and populations needed for regulatory approval of LPCN 1144 for the treatment of NASH.

 In
addition, a number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical
trials, even after achieving positive results in early-stage development. The FDA currently insists on histopathology endpoints for diagnosis
and assessment of efficacy of treatment for NASH with LPCN 1144 in a pivotal trial. Accordingly, our results from our LiFT study
may not be predictive of the results we may obtain from further studies and trials.

 Several
factors could significantly affect the prospects for LPCN 1144, including factors relating to the regulatory approval, competitive landscape
and clinical development challenges for LPCN 1144. The anticipated Phase 3 programs for an NDA filing for LPCN 1144 will be very long
and resource intensive. Although we are exploring the possibility of partnering LPCN 1144 to a third party for further development and
commercialization, we may not be able to identify potential partners or successfully enter into partnership arrangements on terms favorable
to us, if at all. If we are unable to successfully partner LPCN 1144, LPCN 1144 may never be successfully commercialized.

 Our
research and development programs and processes are at an early stage of development, which makes it difficult to evaluate our business
and prospects or predict if or when we will successfully commercialize or partner our product candidates.

 Our
operations to date have primarily been limited to conducting research and development activities under license and collaboration agreements.
Our current portfolio consists of product candidates at various clinical stages of development in addition to our out-licensed product
TLANDO. We have never marketed or commercialized a drug product. Consequently, any predictions about our future performance may not be
as accurate as they could be if we were further along our commercialization path. In addition, as a pre-commercial stage business, we
may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors.

 Our
clinical product candidates are at an early stage of development and will require significant further investment and regulatory
approvals prior to marketing and commercialization. As such, our product development processes for LPCN 1154, LPCN 2101, LPCN 2203,
and LPCN 1148, in addition to LPCN 1111, LPCN 1144, and LPCN 1107 are very risky and uncertain, and our product candidates may fail
to advance beyond the current study. Even if we obtain required financing, we cannot ensure successful product development or that
we will obtain regulatory approval or successfully commercialize or partner any of our product candidates and generate product
revenues.

 All
of our clinical candidates will be subject to extensive regulation which can be costly and time consuming, cause delays or prevent approval
of the products for commercialization.

 Our
clinical development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN 1107 and any future product candidates is
subject to extensive regulations by the FDA. Product development is a very lengthy and expensive process and can vary significantly
based upon the product candidate's novelty and complexity. Regulations are subject to change and regulatory agencies have
significant discretion in the approval process.

 Numerous
statutes and regulations govern human testing and the manufacture and sale of human therapeutic products in the United States. Such legislation
and regulation bears upon, among other things, the approval of protocols and human testing, the approval of manufacturing facilities,
safety of the product candidates, testing procedures and controlled research, review and approval of manufacturing, preclinical and clinical
data prior to marketing approval including adherence to cGMP during production and storage as well as regulation of marketing activities
including advertising and labeling.

 In
order to obtain regulatory clearance for the commercial sale of any of our product candidates, we must demonstrate through preclinical
studies and clinical trials that the potential product is safe and efficacious for use in humans for each target indication. Obtaining
approval of any of our product candidates is an extensive, lengthy, expensive and uncertain process, and the FDA may delay, limit or
deny approval for many reasons, including:

 we
 may not be able to demonstrate that the product candidate is safe and effective to the satisfaction of the FDA;

 the
 results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;

 the
 FDA may disagree with the number, design, size, conduct or implementation of our clinical trials;

 the
 contract research organization that we retain to manage our clinical trials may take actions outside of our control that materially
 adversely impact our clinical trials;

 the
 FDA may not find the data from preclinical studies and clinical trials sufficient to demonstrate that a particular product candidate's
 clinical and other benefits outweigh its safety risks;

 the
 FDA may disagree with our interpretation of data from our preclinical studies and/or clinical trials or may require that we conduct
 additional trials;

 the
 FDA may not accept data generated at our clinical trial sites;

 if
 an NDA, once submitted, is reviewed by an Advisory Committee, the FDA may have difficulties scheduling an Advisory Committee meeting
 in a timely manner or the Advisory Committee may recommend against approval of our application or may recommend that the FDA require,
 as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and
 use restrictions;

 the
 FDA may require development of a REMS as a condition of approval;

 the
 FDA may require longer or additional duration of stability data on the clinical lots prior to initiation of further clinical trials; and

 the
 FDA may identify deficiencies in the formulation or stability of our product candidates or products, or relating to our manufacturing
 processes or facilities, or in the processes and facilities of the contract manufacturing organization ("CMO"), our suppliers,
 or other third parties that may be utilized in the production supply chain of our products.

 Preclinical
and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product
candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain FDA approval for their
products.

 No
assurance can be given that current regulations relating to regulatory approval will not change or become more stringent. The FDA may
also require that we amend clinical trial protocols and/or run additional trials in order to provide additional information regarding
the safety, efficacy or equivalency of any compound for which we seek regulatory approval. Moreover, any regulatory approval of a drug
which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed. Furthermore, product approvals
may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory standards is not
maintained. The FDA could become more risk averse to any side effects or set higher standards of safety and efficacy prior to reviewing
or approving a product. This could result in a product not being approved.

 We
are dependent on the commercial success of our licensed product, TLANDO, for royalty revenue and potential milestone payments.

 TLANDO
is currently our only product that has completed Phase 3 clinical trials. On February 1, 2024, we transitioned the commercialization
of TLANDO to Verity from our previous licensee Antares. In January 2024, we entered into the Verity License Agreement with Verity, pursuant
to which we granted Verity an exclusive, royalty-bearing, sublicensable right and license to develop and commercialize our TLANDO product
with respect to TRT in the U.S. and Canada. None of our other products have been approved for sale. Therefore, at this stage, our ability
to realize revenue depends on TLANDO's successful commercialization. The commercial success of TLANDO depends almost entirely on
Verity's commercialization efforts and we have very limited ability to influence Verity's efforts, including the amount and
timing of resources they devote, if any, to the commercialization of TLANDO. On March 29, 2022, the FDA granted approval to TLANDO for
testosterone replacement therapy in adult males indicated for conditions associated with a deficiency or absence of endogenous testosterone:
primary hypogonadism (congenital or acquired) and hypogonadotropic hypogonadism (congenital or acquired). Our ability to realize royalty
revenue, will depend on the commercialization efforts of Verity. If Verity is not able to successfully commercialize TLANDO, we may not
realize any royalty revenue under the Verity License Agreement and our business could be adversely affected. Additionally, regulatory
approval of TLANDO may be withdrawn and the failure to maintain regulatory approvals would prevent TLANDO from being marketed and could
have a material adverse effect on our business.

 Under
the PREA, our licensing partner, Verity, will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in
pediatric patients. The FDA required certain post-marketing studies including: (i) conducting an appropriately designed label comprehension
and knowledge study that assesses patient understanding of key risk messages in the Medication Guide for TLANDO and (ii) conducting an
appropriately designed one-year trial to evaluate development of adrenal insufficiency with chronic TLANDO therapy. Verity is responsible
for conducting these post-marketing studies. The ramifications of the results of these studies conducted by Verity, or the ramifications
of Verity's inability or unwillingness to conduct these studies, are unknown to us and would be the between Verity and the FDA.

 In
the event that we seek regulatory approval of TLANDO outside the United States and Canada, such markets have requirements for approval
of drug candidates with which we must comply prior to marketing. Obtaining regulatory approval for marketing of TLANDO in one country
does not ensure we will be able to obtain regulatory approval in other countries but a failure or delay in obtaining regulatory approval
in one country may have a negative effect on the regulatory process in other countries.

 If T-replacement therapies are found, or are perceived, to create
health risks, our ability to realize any revenue from TLANDO and LPCN 1111 could be materially adversely affected, and our business could
be harmed. Physicians and patients may be deterred from prescribing and using T-replacement therapies, which could depress demand for
TLANDO and compromise the successful commercialization of TLANDO.

 Certain
publications have suggested potential health risks associated with T-replacement therapy, such as increased cardiovascular disease risk,
including increased risk of heart attack or stroke, fluid retention, sleep apnea, breast tenderness or enlargement, increased red blood
cells, development of clinical prostate disease, including prostate cancer, and the suppression of sperm production. These potential
health risks are described in various articles, including the following publications:

 a
 2014 publication in PLOS ONE, which found that, compared to the one year prior to beginning T-replacement therapy, the risk of heart
 attack doubled 90 days after the start of T deficiency treatment in older men regardless of their history of heart disease and was
 two to three times higher in men younger than 65 with a history of heart disease;

 a
 2013 publication in the Journal of the American Medical Association, which reported that hypogonadal men receiving T-replacement
 therapy developed a 30% increase in the risk of stroke, heart attack and death; and

 a
 2013 publication in BMC Medicine, which concluded that exogenous T increased the risk of cardiovascular-related events, particularly
 in trials not funded by the pharmaceutical industry.

 Prompted
by these events, the FDA announced on January 31, 2014, that it will investigate the risk of stroke, heart attack, and death in men taking
FDA-approved testosterone products and that the FDA would hold a T-class Advisory Committee meeting on September 17, 2014, to discuss
this topic further. The FDA has also asked health care professionals and patients to report side effects involving prescription testosterone
products to the agency.

 Following
the FDA's announcement, the Endocrine Society, a professional medical organization, released a statement in February 2014 in support
of further studies regarding the risks and benefits of FDA-approved T-replacement products for men with age-related T deficiency. Specifically,
the Endocrine Society noted that large-scale randomized controlled trials are needed to determine the risks and benefits of T-replacement
therapy in older men. In addition, the Endocrine Society recommended that patients should be informed of the potential cardiovascular
risks in middle-aged and older men associated with T-replacement therapies. Also following the FDA's announcement, Public Citizen,
a consumer advocacy organization, petitioned the FDA to add a "black box" warning about the increased risks of heart attacks
and other cardiovascular dangers to the product labels of all T-replacement therapies. In addition, this petition urged the FDA to delay
its decision date on approving Aveed, a long-acting T-injectable developed by Endo, which was subsequently approved by the FDA in March
2014. In July 2014, the FDA responded to the Public Citizen petition and denied the petition. Additionally, in June 2014 the FDA announced
that it would require the manufacturers of testosterone drugs to update the warning label to include blood clots including deep vein
thrombosis and pulmonary embolism.

 At
the T-class Advisory Committee meeting held on September 17, 2014, the Advisory Committee discussed (i) the identification of the appropriate
patient population for whom T-replacement therapy should be indicated and (ii) the potential risk of major adverse cardiovascular events,
defined as non-fatal stroke, non-fatal myocardial infarction and cardiovascular death associated with T-replacement therapy. At the meeting,
16 of the 21 members of the Advisory Committee voted that the FDA should require sponsors of testosterone products to conduct a post
marketing study (e.g. observational study or controlled clinical trial) to further assess the potential cardiovascular risk. Further,
12 of these voted that such post marketing study be required only if the T-replacement therapy is also approved for age-related hypogonadism.

 The
Advisory Committee also held a meeting on September 18, 2014, to evaluate the safety and efficacy of JATENZO (previously Rextoro),
an oral TU submitted to the FDA by Clarus for the proposed indication of T-replacement therapy. 18 of the 21 members of the Advisory
Committee voted that the overall benefit/risk profile of JATENZO was not acceptable to support approval for T-replacement therapy.
The Advisory Committee agreed that an oral TU as a T-replacement therapy is promising and that it would be of great value to patients
to have an oral treatment option, but they did not believe the current JATENZO data supported approval.

 On
March 3, 2015, the FDA issued a safety announcement addressing the Advisory Committee's recommendations and communicated its expectations
related to label revisions and additional clinical requirements.

 The
FDA's safety assessment recommended the following label modifications/restrictions in the indicated population for T-replacement
therapy:

 limiting
 use of T-replacement products to men who have low testosterone caused by certain medical conditions;

 prior
 to initiating use of T-replacement products, confirm diagnosis of hypogonadism by ensuring that serum testosterone has been measured
 in the morning on at least two separate days and that these concentrations are below the normal range;

 adding
 cautionary language stating that the safety and efficacy of TRT products with age-related hypogonadism have not been established;
 and

 adding
 cautionary language stating that some studies have shown an increased risk of myocardial infarction and stroke associated with use
 of T-replacement products.

 On
March 29, 2022, the FDA approved TLANDO. As part of their approval, the FDA required the inclusion of certain warnings and precautions
in our labeling for TLANDO, including a "black box warning," including warnings relating to blood pressure increases and
an indication that the safety and efficacy of TLANDO in males less than 18 years has not been established. These warnings may deter physicians
and patients from using TLANDO, which could adversely affect our business.

 The
FDA has also required that certain post-marketing studies be conducted to (i) assess patient understanding of key risks relating to TLANDO
and (ii) evaluate development of adrenal insufficiency with chronic TLANDO therapy. Verity is responsible for conducting these post-marketing
studies. Negative outcomes from such studies could adversely affect the ability of Verity to successfully commercialize TLANDO, which
would adversely affect our ability to realize royalty revenue under the Verity License Agreement.

 If
we fail to obtain adequate healthcare reimbursement for our products, our revenue-generating ability will be diminished and there is
no assurance that the anticipated market for our products will be sustained.

 We
believe that there could be many different applications for products successfully derived from our technologies and that the anticipated
market for products under development could continue to expand. However, due to competition from existing or new products, potential
changes to the class TRT label by the FDA and the yet to be established commercial viability of our products, no assurance can be given
that these beliefs will prove to be correct. Physicians, patients, formularies, payors or the medical community in general may not accept
or utilize any products that we or our collaborative partners may develop. Other drugs may be approved during our clinical testing which
could change the accepted treatments for the disease targeted and make our compound obsolete.

 Our
ability to commercialize our products with success may depend, in part, on the extent to which coverage and adequate reimbursement to
patients for the cost of such products and related treatment will be available from governmental health administration authorities, private
health coverage insurers and other organizations, as well as the ability of private payors to pay for or afford our drugs. Adequate third-party
coverage may not be available to patients to allow us to maintain price levels sufficient for us to realize an appropriate return on
our investment in product development.

 Coverage
and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payers can be critical
to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more
established or lower cost therapeutic alternatives are already available or subsequently become available. Additionally, current manufacturers
of drug products may have agreements with payors that may limit the ability of new products to get on formulary or require a step edit
with an existing product before reimbursement of a new product will occur. Even if we obtain coverage for our products, the resulting
reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high. Patients are less
likely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our
products. Payers may require a more arduous prior authorization process as a condition to payment for TRT therapy. This could adversely
affect the market for TRT products.

 In
the United States and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals
are subject to varying degrees of government control. Healthcare reform and controls on healthcare spending may limit the price we charge
for any products and the amounts thereof that we can sell. In particular, in the United States, the federal government and private insurers
have changed and have considered ways to change, the manner in which healthcare services are provided. In March 2010, ACA became law
in the United States. ACA substantially changes the way healthcare is financed by both governmental and private insurers and significantly
affects the healthcare industry. The provisions of ACA of importance to our potential product candidates include the following:

 an
 annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents;

 an
 increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

 expansion
 of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers,
 and enhanced penalties for noncompliance;

 a
 new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated
 prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's
 outpatient drugs to be covered under Medicare Part D;

 extension
 of manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed
 care organizations;

 expansion
 of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals
 beginning in 2014 and by adding new mandatory eligibility categories for certain individuals with specified income levels, thereby
 potentially increasing manufacturers' Medicaid rebate liability;

 expansion
 of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

 new
 requirements to report annually certain financial arrangements with physicians, certain other healthcare professionals, and teaching
 hospitals;

 a
 new requirement to annually report drug samples that manufacturers and distributors provide to licensed practitioners, pharmacies
 of hospitals and other healthcare entities; and

 a
 new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness
 research, along with funding for such research.

 In
addition, other legislative changes have been proposed and adopted since ACA was enacted. On August 2, 2011, the Budget Control Act of
2011, created, among other things, measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked
with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required
goals, thereby triggering the legislation's automatic reduction to several government programs. This includes aggregate reductions
to Medicare payments to providers of up to 2% per fiscal year, starting in 2013. On January 2, 2013, President Obama signed into law
the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers and increased the
statute of limitations period for the government to recover overpayments to providers from three to five years. The Medicare Access and
CHIP Reauthorization Act of 2015 was signed into law on April 16, 2015 and implemented the most significant change in Medicare reimbursement
since the ACA was enacted. This 2015 law authorizes a new Medicare pay –for-performance reimbursement system for physicians, which
will reward physicians for performance on metrics related to quality of care, resource use, meaningful use of electronic medical records,
and clinical practice improvement activities. The Bipartisan Budget Act was enacted on November 2, 2015, and among provisions, restricts
the types of facilities that may receive hospital reimbursement under Medicare. These new laws may result in additional reductions in
Medicare and other healthcare funding, which could have a material adverse effect on our customers and accordingly, our financial operations.

 Any reduction in reimbursement from Medicare and other government programs may result in a similar
reduction in payments from private payers. In the future, the U.S. government may institute further controls and different reimbursement
schemes and limits on Medicare and Medicaid spending or reimbursement that may affect the payments we could collect from sales of any
products in the United States.

 The
Department of Health and Human Services Office of Inspector General issued final regulations on November 30, 2020 to eliminate safe harbor
protection under the anti-kickback statute for drug price reductions that pharmaceutical manufacturers pay to Medicare and Medicaid plan
sponsors and their pharmacy benefit managers. The proposal reflects a clear intent to substantially alter many of the current drug discount
and services compensation practices among pharmaceutical manufacturers and Medicare and Medicaid managed care organizations and their
pharmacy benefit managers. The proposal also reflects a skepticism that current drug discount and compensation practices among manufacturers
and pharmacy benefit managers are sufficiently transparent to health plans to ensure that all appropriate cost reductions and value is
passed through to health plans and reflected in lower health plans costs and lower premiums for beneficiaries. The Infrastructure Investment
and Jobs Act enacted in 2021 delayed the potential effective date of the proposal until January 1, 2026, and the Inflation Reduction
Act of 2022 further delayed potential implementation of the rule until 2032. If the regulation becomes effective, it could result in
lower prices for pharmaceutical products in general.

 The
Centers for Medicare and Medicaid Services issued an interim final rule on November 20, 2020, that would tie prices for certain
drugs under Medicare Part B to the lowest price for those drugs available in certain countries that are members of the Organization
for Economic Co-operation and Development. This rule was rescinded in December 2021. If resurrected, any similar proposal could
result in lower prices for pharmaceutical products in general.

 The
Inflation Reduction Act of 2022 (Pub. L. No. 117-169) was signed into law on August 16, 2022 and includes a number of provisions
aimed at lowering prescription drug costs and reducing government spending on drugs. This includes a requirement that the Department
of Health and Human Services negotiate a "maximum fair price" with drug manufacturers for certain single-source brand
drugs or biologics without generic or biosimilar competitors that are covered under Medicare Part D and Part B. This pricing will
begin in 2026 for Medicare Part D and 2028 for Medicare Part B. An excise tax is imposed on drug manufacturers that fail to comply
with the required negotiation process. In August 2023 the Biden Administration released the first round of drugs subject to this new
Medicare Drug Pricing Negotiation Program. In addition, the law requires drug manufacturers to pay a rebate to the federal
government if the price for almost all drugs covered under Medicare Part D (starting in 2022), and single-source drug or biologics
covered under Medicare B (starting in 2023), increase greater than the inflation rate. The rebate amount equals the number of drug
units sold in Medicare multiplied by the amount the drug's price exceeds the inflation-adjusted price. The law also modifies
the Medicare Part D benefit structure to cap the amount beneficiaries must spend on drug costs and increase the discounts
manufacturers are required to pay. The Inflation Reduction Act of 2022 signals an increased desire to control the prices and costs
associated with pharmaceutical products. A number of states have adopted drug affordability legislation which permits a drug
affordability board to implement or recommend upper payment limits for drugs identified as posing affordability challenges. This
legislation, as well as any future statutes or regulations at the federal or state level, may impact reimbursement for our product
candidates and may challenge our ability to realize an appropriate return on our investment in research and product development. Any
further legislative or administrative action to reduce reimbursement or health benefits to beneficiaries under the Medicare or
Medicaid program could affect the payment we could collect from sale of any product in the United States.

 There
is substantial competition in the TRT market, which may result in others discovering, developing or commercializing products before or
more successfully than us or our licensing partner.

 We
expect to face significant competition for any of our product candidates, if approved. In particular, TLANDO competes in the T-replacement
therapies market, which is competitive and currently dominated by the sale of T-gels and T-injectables. Receipt of future potential payments
under our licensing agreement will depend, in large part, on our licensing partner's ability to obtain an adequate share of the
market. Potential competitors in North America, Europe and elsewhere include major pharmaceutical companies, specialty pharmaceutical
companies, biotechnology firms, universities and other research institutions and government agencies. Other pharmaceutical companies
may develop oral T-replacement therapies that compete with TLANDO. For example, because TU is not a patented compound and is commercially
available to third parties, it is possible that competitors may design methods of TU administration that would be outside the scope of
the claims of either our issued patents or our patent applications. This would enable their products to effectively compete with TLANDO,
which could have a negative effect on potential payments under our licensing agreement.

 The
following T-replacement therapies currently on the market in the United States compete with TLANDO:

 Oral-T,
 such as Jatenzo and Kyzatrek;

 T-gels,
 such as AndroGel (marketed by Abbvie) and Perrigo's AB-rated 1% generic of AndroGel, Teva's 1% generic of AndroGel, Testim
 and its generics (marketed by Endo Health Solutions, or Endo), and Fortesta and its generics (marketed by Endo);

 T-injectables,
 including a subcutaneous auto-injector, XYOSTED, marketed by Antares Pharma, Inc.;

 Branded,
 longer-acting injectables, such as Aveed (marketed by Endo);

 T-nasals,
 such as Natesto (marketed by Acerus);

 methyl-T,
 such as Methitest (marketed by Impax) and Testred (marketed by Valeant);

 transdermal
 patches, such as Androderm (marketed by Allergan);

 buccal
 patches, such as Striant (marketed by Endo);

 generic
 testosterone enanthate intra-muscular injectables;

 authorized
 generic and generic T-gels; and

 subcutaneous
 injectable pellets, such as Testopel (marketed by Endo).

 On
March 27, 2019, Clarus' product JATENZO, an oral TU product, was approved by the FDA and also received three years of marketing
exclusivity. On February 10, 2020, Clarus announced that JATENZO has been launched and is commercially available. The FDA approved
TLANDO on March 29, 2022, following the expiration of the exclusivity period granted to Clarus with respect to JATENZO. In October
2022, Clarus' assets, including JATENZO, were purchased by Tolmar Pharmaceuticals Inc. in bankruptcy proceedings.

 We
are also aware of other pharmaceutical companies that have T-replacement therapies or testosterone therapies in development that may
be approved for marketing in the United States or outside of the United States.

 Based
on publicly available information, we believe that several other T-replacement therapies that would be competitive with TLANDO are in
varying stages of development. These therapies include T-gels, oral-T, an aromatase inhibitor, a new class of drugs called Selective
Androgen Receptor Modulators and hydroalcoholic gel formulations of dihydrotestosterone ("DHT").

 In
light of the competitive landscape above, TLANDO will not be the only oral TRT to market, which may significantly affect the market acceptance
and commercial success of TLANDO.

 Furthermore,
many of our potential competitors have substantially greater financial, technical, and human resources than we do and significantly greater
experience in the discovery and development of drug candidates, obtaining FDA and other marketing approvals of products and the commercialization
of those products. Accordingly, our competitors may be more successful than we may be in obtaining FDA approval for drugs and achieving
widespread market acceptance. Our competitors' drugs may be more effective, or more effectively marketed and sold, than our products
and may render our products obsolete or non-competitive before we can recover the expenses of developing and commercializing them. We
anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become available.
Failure to successfully compete in this market could materially and negatively impact our business and operations.

 Our Licensee's ability to commercialize TLANDO may be limited.

 Our Licensee partner's ability to commercialize TLANDO is uncertain.
Our Licensee's ability to successfully commercialize TLANDO is contingent upon numerous factors including, among other things, the
completion of post-marketing studies, the availability of supplies, commercial acceptance by patients, the medical community, and third-party
payors, and the resources that our Licensee devotes to the commercialization of TLANDO. If our Licensee is unable to successfully commercialize
TLANDO at scale, our business and operations could be adversely affected.

 We
will not be able to successfully commercialize our product candidates without establishing sales, marketing and market access capabilities
internally or through collaborators.

 We
currently do not have sales, marketing and market access staff. If and when any of our product candidates are commercialized, we may
not be able to find suitable sales and marketing staff and collaborators for our product candidates. The outside collaborators we work
with, including Verity under the Verity License Agreement with respect to TLANDO, may not be adequate or successful and any collaborators
could terminate or materially reduce the effort they direct to our products. The development of collaborations or an internal sales force
and marketing, market access and sales capability will require significant capital, management resources and time. The cost of establishing
such a sales force may exceed any potential product revenues and our marketing, market access and sales efforts may be unsuccessful.
If we are unable to develop an internal marketing, market access and sales capability or if we are unable to enter into a marketing and
sales arrangement with a third party on acceptable terms, we may be unable to successfully commercialize our product candidates.

 Even
if we receive marketing approval in the United States, we may never receive regulatory approval to market our products outside the United
States, which could reduce the size of our potential markets and have a material adverse impact on our business.

 In
order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements
of other countries regarding safety and efficacy.

 Approval
procedures vary among countries and can involve additional product candidate testing and additional administrative review periods. The
time required to obtain approvals in other countries might differ from that required to obtain FDA approval. The marketing approval process
in other countries may include all of the risks detailed above regarding FDA approval in the United States as well as other risks. In
particular, in many countries outside of the United States, products must receive pricing and reimbursement approval before the product
can be commercialized. This can result in substantial delays in such countries. Marketing approval in one country does not ensure marketing
approval in another, but a failure or delay in obtaining marketing approval in one country may have a negative effect on the regulatory
process in others. Failure to obtain marketing approval in other countries or any delay or setback in obtaining such approval would impair
our ability to market our products in such foreign markets. Any such impairment would reduce the size of our potential markets, which
could have an adverse impact on our business, results of operations and prospects.

 We
are subject to stringent government regulations concerning the clinical testing of our products and will continue to be subject to government
regulation of any product that receives regulatory approval.

 Numerous
statutes and regulations govern human testing and the manufacture and sale of human therapeutic products in the United States and other
countries where we intend to market our products. Such legislation and regulation bears upon, among other things, the approval of clinical
study protocols and human testing of our products, the approval of manufacturing facilities, testing procedures and controlled research,
the review and approval of manufacturing, preclinical and clinical data prior to marketing approval, including adherence to cGMP during
production and storage, and marketing activities including advertising and labeling.

 Clinical
trials may be delayed or suspended at any time by us or by the FDA or by other similar regulatory authorities if it is determined at
any time that patients may be or are being exposed to unacceptable health risks, including the risk of death, or if compounds are not
manufactured under acceptable cGMP conditions or with acceptable quality. Current regulations relating to regulatory approval may change
or become more stringent. The agencies may also require additional clinical trials to be run in order to provide additional information
regarding the safety, efficacy or equivalency of any compound for which we seek regulatory approval. Moreover, any regulatory approval
of a drug which is eventually obtained may entail limitations on the indicated uses for which that drug may be marketed. Furthermore,
product approvals may be withdrawn or limited in some way if problems occur following initial marketing or if compliance with regulatory
standards is not maintained. Regulatory agencies could become more risk adverse to any side effects or set higher standards of safety
and efficacy prior to reviewing or approving a product. This could result in a product not being approved.

 If
we, or any future marketing collaborators or CMOs, fail to comply with applicable regulatory requirements, we may be subject to sanctions
including fines, product recalls or seizures and related publicity requirements, injunctions, total or partial suspension of production,
civil penalties, suspension or withdrawals of previously granted regulatory approvals, warning or untitled letters, refusal to approve
pending applications for marketing approval of new products or of supplements to approved applications, import or export bans or restrictions,
and criminal prosecution and penalties. Any of these penalties could delay or prevent the promotion, marketing or sale of our products.

 The
successful commercialization of our product candidates and ability to generate significant revenue will depend on achieving market acceptance.

 Even
if our product candidates are successfully developed and receive regulatory approval, they may not gain market acceptance among physicians,
patients, healthcare payers such as private insurers or governments and other funding parties and the medical community. The degree of
market acceptance for our products, if approved, will depend on a number of factors, including:

 the
 relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies;

 the
 prevalence and severity of any adverse side effects;

 limitations
 or warnings contained in the labeling approved by the FDA;

 availability
 of alternative treatments, including a number of competitive therapies already approved or expected to be commercially launched in
 the near future;

 distribution
 and use restrictions imposed by the FDA or agreed to by us as part of a mandatory REMS or voluntary risk management plan;

 pricing
 and cost effectiveness;

 the
 effectiveness of our or any future collaborators' sales and marketing strategies;

 our
 ability to increase awareness of our products through marketing efforts;

 our
 ability to obtain sufficient third-party coverage or reimbursement; and

 the
 willingness of patients to pay out-of-pocket in the absence of third-party coverage.

 If
our product candidates are approved but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients,
we may not generate sufficient revenue from our products and we may never become or remain profitable. In addition, our efforts to educate
the medical community and third-party payors on the benefits of our products may require significant resources and may never be successful.

 Even
if we obtain marketing approval for our products, physicians and patients using existing products may choose not to switch to our products.

 Physicians
often show a reluctance to switch their patients from existing drug products even when new and potentially more effective and convenient
treatments enter the market. Also, physicians may be reluctant to switch patients if adequate reimbursement for new products is not available.
In addition, patients often acclimate to the brand or type of drug product that they are currently taking and do not want to switch unless
their physicians recommend switching products or they are required to switch drug treatments due to lack of reimbursement for existing
drug treatments and only if the new product has adequate reimbursement. The existence of either or both of physician or patient reluctance
in switching to our products would have an adverse effect on our operating results and financial condition.

 The
FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If we are found
to have improperly promoted off-label uses, we may become subject to significant liability.

 The
FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as our
product candidates. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies
as reflected in the product's approved labeling. The FDA may impose further requirements or restrictions on the distribution or
use of our product candidates as part of a REMS plan, such as limiting prescribing to certain physicians or medical centers that have
undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll
in a registry. If we receive marketing approval for our product candidates, physicians may nevertheless prescribe our products to their
patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become
subject to significant liability, including potential liability under federal civil and criminal false claims acts. The federal government
has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging
in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified
promotional conduct is changed or curtailed.

 If
we fail to comply with federal and state healthcare laws, including fraud and abuse and health information privacy and security laws,
we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected.

 As
a pharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid
or other third-party payers, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients'
rights are and will be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by
both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:

 the
 federal Anti-Kickback Statute, which constrains our marketing practices, educational programs, pricing policies, and relationships
 with healthcare providers or other entities, by prohibiting, among other things, soliciting, receiving, offering or paying remuneration,
 directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an
 item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

 federal
 civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities
 from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that
 are false or fraudulent;

 HIPAA,
 which among other things created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit
 program or making false statements relating to healthcare matters;

 the
 federal Physician Payments Sunshine Act, which, among other things, requires manufacturers of drugs, devices, biologics and medical
 supplies for which payment is available under certain federal healthcare programs to report annually information related to "payments
 or other transfers of value" made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors)
 and teaching hospitals, and ownership and investment interests held by certain healthcare professionals and their immediate family
 members;

 HIPAA,
 as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and its implementing regulations, which
 imposes certain requirements relating to the privacy, security, breach notification, and transmission of individually identifiable
 health information; and

 state
 and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items
 or services reimbursed by any third-party payer, including commercial insurers, and state and foreign laws governing the privacy
 and security of health information in certain circumstances, many of which differ from each other in significant ways and often are
 not preempted by HIPAA, thus complicating compliance efforts.

 Because
of the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of our business
activities could be subject to challenge under one or more of such laws. To the extent that any of our product candidates is ultimately
sold in countries other than the United States, we may be subject to similar laws and regulations in those countries. If we or our operations
are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject
to penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, exclusion from participating in government
healthcare programs, contractual damages, reputational harm and the curtailment or restructuring of our operations. Any penalties, damages,
fines, curtailment or restructuring of our operations could materially adversely affect our ability to operate our business and our financial
results. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks
cannot be entirely eliminated. Any action against us for violation of these laws, even if we successfully defend against it, could cause
us to incur significant legal expenses and divert our management's attention from the operation of our business. Moreover, achieving
and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

 The
Department of Health and Human Services Office of Inspector General proposed new regulations on February 6, 2019 to eliminate safe harbor
protection under the anti-kickback statute for drug price reductions that pharmaceutical manufacturers pay to Medicare and Medicaid plan
sponsors and their pharmacy benefit managers. The proposal reflects a clear intent to substantially alter many of the current drug discount
and services compensation practices among pharmaceutical manufacturers and Medicare and Medicaid managed care organizations and their
pharmacy benefit managers. The proposal also reflects a skepticism that current drug discount and compensation practices among manufacturers
and pharmacy benefit managers are sufficiently transparent to health plans to ensure that all appropriate cost reductions and value is
passed through to health plans and reflected in lower health plans costs and lower premiums for beneficiaries. If the proposal is finalized,
it could result in lower prices for pharmaceutical products in general. The Infrastructure Investment and Jobs Act enacted in 2021 delayed
the potential effective date of the proposal until January 1, 2026, and the Inflation Reduction Act of 2022 further delayed potential
implementation of the rule until 2032. If the regulation becomes effective, it could result in lower prices for pharmaceutical products
in general.

 Any further legislative
or administrative action to reduce reimbursement or health benefits to beneficiaries under the Medicare or Medicaid program could affect
the payment we could collect from sale of any product in the United States.

 Our
future success depends on our ability to retain our chief executive officer and other key executives and to attract, retain and motivate
qualified personnel.

 We
are highly dependent on Dr. Mahesh V. Patel and the other principal members of our executive team. Employment with our executives and
other employees are "at will", meaning that there is no mandatory fixed term and their employment with us may be terminated
by us or by them for any or no reason. The loss of the services of any of our executives or other key employees might impede the achievement
of our research, development and commercialization objectives. Recruiting and retaining qualified scientific personnel and accounting
personnel will also be critical to our success. We may not be able to attract and retain qualified personnel on acceptable terms, or
at all, given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition
for the hiring of scientific personnel from universities and research institutions. Failure to succeed in clinical trials may make it
more challenging to recruit and retain qualified scientific personnel.

 In
addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our development
and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under
consulting or advisory contracts with other entities that may limit their availability to us.

 Federal
legislation and actions by state and local governments may permit re-importation of drugs from foreign countries into the United States,
including foreign countries where the drugs are sold at lower prices than in the United States, which could materially adversely affect
our operating results.

 Our
licensing partner may face competition for TLANDO from lower priced T-replacement therapies from foreign countries that have placed price
controls on pharmaceutical products. The Medicare Prescription Drug Improvement and Modernization Act of 2003 contains provisions that
may change U.S. importation laws and expand pharmacists' and wholesalers' ability to import lower priced versions of an approved
drug and competing products from Canada, where there are government price controls. These changes to U.S. importation laws will not take
effect unless and until the Secretary of Health and Human Services certifies that the changes will pose no additional risk to the public's
health and safety and will result in a significant reduction in the cost of products to consumers. The Secretary of Health and Human
Services has not yet announced any plans to make this required certification.

 A
number of federal legislative proposals have been made to implement the changes to the U.S. importation laws without any certification
and to broaden permissible imports in other ways. Even if the changes do not take effect, and other changes are not enacted, imports
from Canada and elsewhere may continue to increase due to market and political forces, and the limited enforcement resources of the FDA,
U.S. Customs and Border Protection and other government agencies. For example, Pub. L. No. 111-83, which was signed into law in October
2009, provides appropriations for the Department of Homeland Security for the 2010 fiscal year, expressly prohibits U.S. Customs and
Border Protection from using funds to prevent individuals from importing from Canada less than a 90-day supply of a prescription drug
for personal use, when the drug otherwise complies with the Federal Food, Drug, and Cosmetic Act. Further, several states and local governments
have implemented importation schemes for their citizens, and, in the absence of federal action to curtail such activities, we expect
other states and local governments to launch importation efforts.

 The
importation of foreign products that compete with our products could have an adverse effect on our revenue and profitability.

 We
may become subject to the risk of product liability claims.

 We
face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater
risk on commercialized products. Human therapeutic products involve the risk of product liability claims and associated adverse publicity.
Currently, the principal risks we face relate to patients in our clinical trials, who may suffer unintended consequences. Claims might
be made by patients, healthcare providers or pharmaceutical companies or others. We may be sued if any product we develop allegedly causes
injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.

 For
example, to our knowledge, HPC has not been administered orally in a published clinical trial in any pregnant woman for the prevention
of PTB. We cannot be certain of the safety profile upon single oral or multiple oral administration of LPCN 1107 to the patient or the
fetus and its long term side effects on the mother as well as the child because (i) oral performance of LPCN 1107 may be substantially
different from efficacy and/or safety standpoint compared to previously commercialized intramuscular HPC, Makena, and (ii) oral delivery
of HPC could have a very different PK and/or pharmacodynamic profile that has never been experienced with non-oral administration of
HPC, thus having its own significant liability exposure independent of known safety of non-oral HPC in humans.

 Any
product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent
in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection
acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required
to limit commercialization of our product candidates, if approved. Even successful defense would require significant financial and management
resources. Regardless of the merits or eventual outcome, liability claims may result in:

 decreased
 demand for our product candidates;

 injury
 to our reputation;

 withdrawal
 of clinical trial participants;

 initiation
 of investigations by regulators;

 costs
 to defend the related litigation;

 a
 diversion of management's time and our resources;

 substantial
 monetary awards to trial participants or patients;

 product
 recalls, withdrawals or labeling, marketing or promotional restrictions;

 loss
 of revenues from product sales; and

 the
 inability to commercialize any of our product candidates, if approved.

 We
may not have or be able to obtain or maintain sufficient and affordable insurance coverage, and without sufficient coverage any claim
brought against us could have a materially adverse effect on our business, financial condition or results of operations. We run clinical
trials through investigators that could be negligent through no fault of our own and which could affect patients, cause potential liability
claims against us and result in delayed or stopped clinical trials. We are required in many cases by contractual obligations, to indemnify
collaborators, partners, third party contractors, clinical investigators and institutions. These indemnifications could result in a material
impact due to product liability claims against us and/or these groups. We currently carry $3.0 million in product liability insurance,
which we believe is appropriate for our clinical trials. Although we maintain such insurance, any claim that may be brought against us
could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in
excess of the limits of our insurance coverage. Our insurance policies also have various exclusions, and we may be subject to a product
liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that
exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital
to pay such amounts.

 Testosterone
is a Schedule III substance under the Controlled Substances Act and any failure to comply with this Act or its state equivalents would
have a negative impact on our business.

 Testosterone
is listed by the U.S. Drug Enforcement Agency, or DEA, as a Schedule III substance under the Controlled Substances Act of 1970. The DEA
classifies substances as Schedule I, II, III, IV or V substances, with Schedule I substances considered to present the highest risk of
substance abuse and Schedule V substances the lowest risk. Scheduled substances are subject to DEA regulations relating to manufacturing,
storage, distribution and physician prescription procedures. For example, all regular Schedule III drug prescriptions must be signed
by a physician and may not be refilled more than six months after the date of the original prescription or more than five times unless
renewed by the physician.

 Entities
must register annually with the DEA to manufacture, distribute, dispense, import, export and conduct research using controlled substances.
In addition, the DEA requires entities handling controlled substances to maintain records and file reports, follow specific labeling
and packaging requirements, and provide appropriate security measures to control against diversion of controlled substances. Failure
to follow these requirements can lead to significant civil and/or criminal penalties and possibly even lead to a revocation of a DEA
registration. Individual states also have controlled substances laws. State controlled substances laws often mirror federal law, however
because the states are separate jurisdictions, they may schedule products separately. While some states automatically schedule a drug
when the DEA does so, in other states there must be rulemaking or legislative action, which could delay commercialization.

 Products
containing controlled substances may generate public controversy. As a result, these products may have their marketing approvals withdrawn.
State and Federal legislatures and administrative agencies may take additional action to combat a perceived misuse or overuse of such
products.

 We
may have to dedicate resources to the defense and resolution of litigation.

 Securities
legislation in the United States makes it relatively easy for stockholders to sue companies. This can lead to frivolous lawsuits which
take substantial time, money, resources and attention or force us to settle such claims rather than seek adequate judicial remedy or
dismissal of such claims. Historically, securities class action litigation has often been brought against a company following a decline
in the market price of its securities. Biotechnology and pharmaceutical companies, including us, have experienced significant stock price
volatility in recent years, increasing the risk of such litigation. As we defend class action lawsuits or future patent infringement
actions should they be filed, or if we are required to defend future actions brought by shareholders, we may be required to pay substantial
litigation costs and managerial attention and financial resources may be diverted from business operations even if the outcome is in
our favor. In addition, while our insurance carrier may cover the costs of settling claims, the Company's capital resources are
critical to its continued operations, and the payment of litigation settlements and associated legal fees diverts these capital resources
away from our operations, even if such amounts do not have a material impact on our financial statements.

 On
November 14, 2019, the Company and certain of its officers were named as defendants in a purported shareholder class action lawsuit,
 Solomon Abady v. Lipocine Inc. et al., 2:19-cv-00906-PMW, filed in the United District Court for the District of Utah. The complaint
alleges that the defendants made false and/or misleading statements and/or failed to disclose that our filing of the NDA for TLANDO to
the FDA contained deficiencies and as a result the defendants' statements about our business and operations were false and misleading
and/or lacked a reasonable basis in violation of federal securities laws. The lawsuit seeks certification as a class action (for a purported
class of purchasers of the Company's securities from March 27, 2019 through November 8, 2019), compensatory damages in an unspecified
amount, and unspecified equitable or injunctive relief. We have insurance that covers claims of this nature. The Company filed a motion
to dismiss the class action lawsuit on July 24, 2020. In response, the plaintiffs filed their response to the motion to dismiss the class
action lawsuit on September 22, 2020 and the Company filed its reply to its motion to dismiss on October 22, 2020. A hearing on the motion
to dismiss occurred on January 12, 2022. On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure
of the action. Although this outcome was in favor of our current and former officers and directors, we incurred litigation costs and
expended managerial resources defending ourselves against these allegations. In addition, there can be no assurance that we will not
experience similar claims in the future.

 Additionally
on April 2, 2019, we filed a lawsuit against Clarus in the United States District Court in Delaware alleging that Clarus's JATENZO
product infringes six of Lipocine's issued U.S. patents: 9,034,858; 9,205,057; 9,480,690; 9,757,390; 6,569,463; and 6,923,988.
Clarus answered the complaint and asserted counterclaims of non-infringement and invalidity. We answered Clarus's counterclaims
on April 29, 2019. On February 11, 2020, we voluntarily dismissed allegations of patent infringement for expired U.S. Patent Nos. 6,569,463
and 6,923,988 in an effort to streamline the issues and associated costs for dispute. 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; 9,205,057;
9,480,690; and 9,757,390 invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112. Clarus still had
remaining claims before the Court. On July 13, 2021, we entered into a Global Agreement with Clarus which resolved all outstanding claims
of this litigation. Under the terms of the settlement, we 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. In April 2022, we amended the Global Agreement with Clarus in an Amended
Settlement Agreement and we agreed to settle 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 Global Agreement agreed to in 2021. The payment of this and other settlement payments divert capital
resources away from our operations, which may adversely affect our business.

 Cyber
security risks and the failure to maintain the integrity of company, employee or guest data could expose us to data loss, litigation
and liability, and our reputation could be significantly harmed.

 We
collect and third parties collaborating on our clinical trials collect and retain large volumes of data, including personally identifiable
information regarding clinical trial participants and others, for business purposes, including for regulatory, research and development
and commercialization purposes, and our collaborators' various information technology systems enter, process, summarize and report
such data. We also maintain personally identifiable information about our employees. The integrity and protection of our Company, employee
and clinical data is critical to our business. We are subject to significant security and privacy regulations, as well as requirements
imposed by government regulation. Maintaining compliance with these evolving regulations and requirements could be difficult and may
increase our expenses. In addition, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure
of data could result in theft, loss or fraudulent or unlawful use of company, employee or clinical data which could harm our reputation,
disrupt our operations, or result in remedial and other costs, fines or lawsuits.

 Risks
Related to Our Dependence on Third Parties

 We
may enter into license agreements and/or collaborations with third parties for the development and commercialization of our drug candidates.
If those collaborations, including, without limitation, our license arrangement with Verity for the development and commercialization
of TLANDO, are not successful, we may not be able to capitalize on the market potential of these drug candidates and may have to alter
our development and commercialization plans for our products.

 Our
drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet
established any collaborative arrangements relating to the development or commercialization of LPCN 1154, LPCN 2101, LPCN 2203, LPCN
1144, LPCN 1148, or LPCN 1107. We have entered into the Verity License Agreement for TLANDO and LPCN 1111 with respect to TRT in the
U.S. We intend to continue to develop our product candidates in the United States with or without a partner although our ability to
advance these product candidates will depend on our capital resources and/or our ability to find a suitable partner to further
develop our product candidates. In order to commercialize our TLANDO product candidates in the United States and Canada, we have
partnered with Verity with respect to TLANDO and LPCN 1111 and we will likely look to establish partnership arrangements with
respect to the development of some of our other product candidates. We may also seek to enter into collaborative arrangements to
develop and commercialize our product candidates outside the United States. We will face significant competition in seeking
appropriate collaborators and these collaborations are complex and time-consuming to negotiate and document. We may not be able to
negotiate collaborations on acceptable terms or in a timely manner, or at all. If that were to occur, we may have to curtail the
development or delay commercialization of our product candidates in certain geographies, reduce the scope of our sales or marketing
activities, reduce the scope of our development plans, or increase our expenditures and undertake development or commercialization
activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities either
inside or outside of the United States on our own, we may need to obtain additional capital, which may not be available to us on
acceptable terms, or at all.

 To
the extent we have, and if we do enter into any further such arrangements with any third parties, we will likely have limited control
over the amount and timing of resources that our partners dedicate to the development or commercialization of our product candidates.
On 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 and LPCN 1111 products with respect to TRT in the U.S. and Canada.
Consequently, our ability to generate any revenues from TLANDO with respect to TRT in the U.S. and Canada depends on the efforts of Verity
to commercialize TLANDO. We have very limited control over the amount and timing of resources that Verity dedicates to these efforts.

 Our
ability to generate revenues from this and other collaborative arrangements will depend on our collaborators' abilities and efforts
to successfully perform the functions agreed to with them in these arrangements. License agreements and/or collaborations involving our
drug candidates, such as our agreement with Verity, pose numerous risks to us, including the following:

 have significant discretion in determining the efforts and resources that they will apply to these efforts and may not perform their
 obligations as expected;

 may de-emphasize or not pursue development and commercialization of our drug candidates or may elect not to continue or renew development
 or commercialization programs based on clinical trial results, changes in the partners' strategic focus, including as a result
 of a sale or disposition of a business unit or development function, or available funding or external factors such as an acquisition
 that diverts resources or creates competing priorities;

 may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate,
 repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing;

 could independently develop, or develop with third parties, products that compete directly or indirectly with our products or drug
 candidates if the partners believe that competitive products are more likely to be successfully developed or can be commercialized
 under terms that are more economically attractive than ours;

 may not be able to acquire and maintain supplier and manufacturer relationships necessary to successfully commercialize our products;

 a
 partner with marketing and distribution rights to multiple products may not commit sufficient resources to the marketing and distribution
 of our product relative to other products;

 may not properly obtain, maintain, defend or enforce our intellectual property rights or may use our proprietary information and
 intellectual property in such a way as to invite litigation or other intellectual property related proceedings that could jeopardize
 or invalidate our proprietary information and intellectual property or expose us to potential litigation or other intellectual property
 related proceedings;

 disputes
 may arise between our partners and us that result in the delay or termination of the research, development or commercialization of
 our products or drug candidates or that result in costly litigation or arbitration that diverts management attention and resources;

 agreements
 may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization
 of the applicable drug candidates;

 agreements
 may not lead to development or commercialization of drug candidates in the most efficient manner or at all; and

 if
 a partner of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or
 commercialization program could be delayed, diminished or terminated.

 If
our license arrangements with Verity, or any future license or collaboration we may enter into, if any, are not successful, our business,
financial condition, results of operations, prospects and development and commercialization efforts may be adversely affected. Any termination
or expiration of the Verity License Agreement, or any future license or collaboration we may enter into, if any, could adversely affect
us financially or harm our business reputation, development and commercialization efforts.

 We
rely upon third-party contractors and service providers for the execution of some aspects of our development programs. Failure of these
collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of our development
programs.

 We
outsource certain functions, tests and services to contract research organizations ("CROs"), medical institutions and collaborators;
and also outsource manufacturing to collaborators and/or contract manufacturers ("CMOs"). We also rely on third parties
for quality assurance, clinical monitoring, clinical data management and regulatory expertise. We may also engage a CRO to run all aspects
of a clinical trial on our behalf. There is no assurance that such individuals or organizations will be able to provide the functions,
tests, drug supply or services as agreed upon or in a quality fashion. Any failure to do so could cause us to suffer significant delays
in the development of our products or processes.

 Due
to our reliance on CROs or other third parties to assist us or who have historically assisted us in conducting clinical trials, we will
be unable to directly control all aspects of our clinical trials.

 We
engaged a CRO to conduct our SOAR, DV and DF Phase 3 clinical studies for TLANDO, as well as the ABPM study for TLANDO. Additionally,
we utilized a CRO for the Phase 2 LiFT clinical study for LPCN 1144, the Phase 2 clinical
study for LPCN 1148 and the pilot and future pivotal studies for LPCN 1154. As a result, we have less direct control over the conduct
of our clinical trials, the timing and completion of the trials and the management of data developed through the trials than if we were
relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well
as difficulties in coordinating activities. Outside parties, including CROs, may:

 have
 staffing difficulties or disruptions;

 fail
 to comply with contractual obligations;

 experience
 regulatory compliance issues;

 undergo
 changes in priorities or may become financially distressed;

 form
 relationships with other entities, some of which may be our competitors; or

 manufacturing
 capacity limitations.

 These
factors may materially adversely affect their willingness or ability to conduct our trials in a manner acceptable to us. We may experience
unexpected cost increases that are beyond our control.

 Moreover,
the FDA requires us to comply with GCP's for conducting, recording, and reporting the results of clinical trials to assure that
data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements.

 Problems
with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service
provider. However, making this change may be costly and may delay our trials, and contractual restrictions may make such a change difficult
or impossible. If we must replace any CRO that is conducting our clinical trials, our trials may have to be suspended until we find another
CRO that offers comparable services. The time that it takes us to find alternative organizations may cause a delay in the commercialization
of our product candidates or may cause us to incur significant expenses to replicate data that may be lost. Although we do not believe
that any CRO on which we may rely will offer services that are not available elsewhere, it may be difficult to find a replacement organization
that can conduct our trials in an acceptable manner and at an acceptable cost. Any delay in or inability to complete our clinical trials
could significantly compromise our ability to secure regulatory approval of our product candidates and preclude our ability to commercialize
them, thereby limiting or preventing our ability to generate revenue from their sales.

 We
and our Licensee rely on a single supplier for our supply of testosterone esters, the active pharmaceutical ingredient of TLANDO, LPCN
1111, LPCN 1148, and LPCN 1144, and the loss of this supplier could harm our business.

 We and our Licensee rely on a single third-party supplier for our supply
of testosterone esters, the active pharmaceutical ingredient of TLANDO, LPCN 1111, LPCN 1148, and LPCN 1144. Since there are only a limited
number of testosterone esters suppliers in the world, if this supplier ceases to provide us with testosterone esters, we or our Licensee
may be unable to procure testosterone esters on commercially favorable terms and/or may not be able to obtain testosterone esters in a
timely manner. Furthermore, the limited number of suppliers of testosterone esters may provide such companies with greater opportunity
to raise their prices. If we or our Licensee are unable to obtain testosterone esters in a timely manner and/or in sufficient quantities,
our ability to develop, and potentially commercialize, LPCN 1111, LPCN 1148, and LPCN 1144 may be adversely affected. In addition, any
increase in price for testosterone esters will likely reduce our potential gross margins for LPCN 1148 and LPCN 1144.

 We rely on limited suppliers for our supply of NAS, the active pharmaceutical
ingredients of LPCN 1154, LPCN 2101, and LPCN 2203 and the loss of these limited suppliers could harm our business.

 We rely on a limited third-party supplier for our supply of NAS, the
active pharmaceutical ingredients of LPCN 1154, LPCN 2101, and LPCN 2203. Since there are only a limited number of NAS suppliers in the
world, if a supplier ceases to provide us with NAS, we may be unable to procure NAS on developmental or commercially favorable terms.
Furthermore, the limited number of suppliers of NAS may provide such suppliers with a greater opportunity to raise their prices. If
we are unable to obtain NAS in a timely manner and/or in sufficient quantities, our ability to develop LPCN 1154, LPCN 2101, and LPCN
2203 may be adversely affected.

 If
we do not establish successful collaborations, we may have to alter our development and commercialization plans for our products.

 Our
drug development programs for our product candidates will require substantial additional cash to fund expenses. We have not yet established
any collaborative arrangements relating to the development or commercialization of LPCN 1148, LPCN 1144, or LPCN 1107. We intend to continue
to develop some of our product candidates in the United States without a partner although our ability to advance these product candidates
will depend on our capital resources. However, in order to commercialize our product candidates in the United States, we will likely
look to establish a partnership or co-promotion arrangement with an established pharmaceutical company that has a sales force, collaborate
on the establishment of an internal sales force or build an internal sales force on our own. We may also seek to enter into collaborative
arrangements to develop and commercialize our product candidates outside the United States. We will face significant competition in seeking
appropriate collaborators and these collaborations are complex and time-consuming to negotiate and document. We may not be able to negotiate
collaborations on acceptable terms or in a timely manner, or at all. If that were to occur, we may have to curtail the development or
delay commercialization of our product candidates in certain geographies, reduce the scope of our sales or marketing activities, reduce
the scope of our commercialization plans, or increase our expenditures and undertake development or commercialization activities at our
own expense. If we elect to increase our expenditures to fund development or commercialization activities either inside or outside of
the United States on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms, or at all.

 If
we are successful in entering into collaborative arrangements and any of our collaborative partners do not devote sufficient time and
resources to a collaboration arrangement with us, we may not realize the potential commercial benefits of the arrangement, and our results
of operations may be materially adversely affected. In addition, if any future collaboration partner were to breach or terminate its
arrangements with us, the development and commercialization of our product candidates could be delayed, curtailed or terminated because
we may not have sufficient financial resources or capabilities to continue development and commercialization of our product candidates
on our own in such locations.

 Risks
Related to Ownership of Our Common Stock

 Our
stock price could decline significantly based on the results and timing of clinical trials, and/or regulatory and other decisions affecting
our product candidates.

 Results
of clinical trials and preclinical studies of our current and potential product candidates may not be viewed favorably by us or third
parties, including the FDA or other regulatory authorities, investors, analysts and potential collaborators. The same may be true of
how we design the clinical trials of our product candidates and regulatory decisions affecting those clinical trials. Pharmaceutical
company stock prices have declined significantly when such results and decisions were unfavorable or perceived negatively or when a product
candidate did not otherwise meet expectations. The final results from our clinical development programs may be negative, may not meet
expectations or may be perceived negatively. The designs of our clinical trials (which may change significantly and be more expensive
than currently anticipated depending on our clinical results and regulatory decisions) may also be viewed negatively by third parties.
We may not be successful in completing these clinical trials on our projected timetable, if at all. In addition, we may never achieve
FDA approval for any of our product candidates other than TLANDO, which could cause our stock price to decline significantly and have
other significant adverse effects on our business.

 If
we do not maintain effective internal controls over financial reporting in the future, the accuracy and timeliness of our financial reporting
may be adversely affected.

 The
Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually
and disclosure controls and procedures quarterly. In particular, we must perform system and process evaluation and testing of our internal
control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting,
as required by Section 404 of the Sarbanes-Oxley Act. If material weaknesses are identified in the future or we are not able to comply
with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated, we could receive
an adverse opinion regarding our internal controls over financial reporting from our accounting firm, and we could be subject to investigations
or sanctions by regulatory authorities, which would require additional financial and management resources, and the market price of our
stock could decline.

 We
incur significant expenses in order to comply with the requirements of being a public company in the United States.

 As
a public company, we incur significantly more legal, accounting and other expenses than as a private company. In addition, the Sarbanes-Oxley
Act of 2002 and rules subsequently implemented by the SEC and U.S. stock exchanges impose numerous requirements on public companies,
including requiring changes in corporate governance practices. Also, the Exchange Act requires, among other things, that we file annual,
quarterly and current reports with respect to our business and operating results. Our management and other personnel will need to devote
a substantial amount of time to compliance with these laws and regulations. These requirements have increased and will continue to increase
our legal, accounting, and financial compliance costs and have made and will continue to make some activities more time consuming and
costly.

 Our
share price is expected to be volatile and may be influenced by numerous factors that are beyond our control.

 A
low share price and low market valuation may make it difficult to raise sufficient additional cash due to the significant dilution to
current stockholders. Market prices for shares of biotechnology and biopharmaceutical companies such as ours are often volatile. The
market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

 the
 success of the commercialization of TLANDO;

 plans
 for, costs of, progress of and results from clinical trials of our product candidates;

 the
 failure of our product candidates to receive FDA approval;

 regulatory
 uncertainty in the TRT class;

 FDA
 Advisory Committee meetings and related recommendations including meetings convened on the TRT class or on similar companies;

 announcements
 by the FDA that may impact on-going clinical studies related to safety or efficacy of TRT products;

 product
 approval and potential FDA required labeling language and/or Phase 4 study commitments;

 announcements
 of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors;

 our
 ability to license our products to third parties;

 failure
 to engage with collaborators or build an internal sales force to commercialize our products should a product candidate other than
 TLANDO receive FDA approval;

 the
 success or failure of other TRT products or non-testosterone based testosterone therapy products;

 failure
 of our products, if approved, to achieve commercial success;

 fluctuations
 in stock market prices and trading volumes of similar companies;

 general
 market conditions and overall fluctuations in U.S. equity markets;

 variations
 in our quarterly operating results;

 changes
 in our financial guidance or securities analysts' estimates of our financial performance;

 changes
 in accounting principles;

 sales
 of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders;

 additions
 or departures of key personnel;

 discussion
 of us or our stock price by the press and by online investor communities;

 our
 cash balance; and

 other
 risks and uncertainties described in these risk factors.

 In
recent years, the stock of other biotechnology and biopharmaceutical companies has experienced extreme price fluctuations that have been
unrelated to the operating performance of the affected companies. There can be no assurance that the market price of our shares of common
stock will not experience significant fluctuations in the future, including fluctuations that are unrelated to our performance. These
fluctuations may result due to macroeconomic and world events, national or local events, general perception of the biotechnology industry
or to a lack of liquidity. In addition, other biotechnology companies or our competitors' programs could have positive or negative
results that impact their stock prices and their results, or stock fluctuations could have a positive or negative impact on our stock
price regardless of whether such impact is direct or not.

 Stockholders
may not agree with our business, scientific, clinical, commercial, or financial strategy, including additional dilutive financings, and
may decide to sell their shares or vote against shareholder proposals. Such actions could materially impact our stock price. In addition,
portfolio managers of funds or large investors can change or change their view on us and decide to sell our shares. These actions could
have a material impact on our stock price. In order to complete a financing, or for other business reasons, we may elect to consolidate
our shares of common stock. Investors may not agree with these actions and may sell our shares. We may have little or no ability to impact
or alter such decisions.

 The
stock prices of many companies in the biotechnology industry have experienced wide fluctuations that have often been unrelated to the
operating performance of the companies. Following periods of volatility in the market price of a company's securities, securities
class action litigation often has been initiated against a company. For example, on July 1, 2016, the Company and certain of its officers
were named as defendants in a purported shareholder class action lawsuit, David Lewis v. Lipocine Inc., et al., filed in the United
States District Court for the District of New Jersey. This initial action was followed by additional lawsuits also filed in the District
of New Jersey. David Lewis v Lipocine Inc., et al. was ultimately settled. Additionally on November 14, 2019, the Company and certain
of its officers were named as defendants in a purported shareholder class action lawsuit, Solomon Abady v. Lipocine Inc. et al.,
2:19-cv-00906-PMW, filed in the United District Court for the District of Utah. This initial action was followed by additional lawsuits
also filed in the United States District Court for the District of Utah. Any future class action litigation that may be initiated against
us may result in us incurring substantial costs and our management's attention may be diverted from our operations, which could
significantly harm our business. In addition, such litigation could lead to increased volatility in our share price.

 The
value of our warrants outstanding from the November 2019 Offering is subject to potentially material increases and decreases based on
fluctuations in the price of our common stock.

 In
November 2019, we completed a public offering of common stock and warrants to purchase common stock (the "November 2019 Offering").
Gross proceeds from the November 2019 Offering were approximately $6.0 million. In the November 2019 Offering, the Company sold (i) 614,706
Class A Units, with each Class A Unit consisting of one share of common stock and a common stock warrant to purchase one share of common
stock, and (ii) 91,177 Class B Units, with each Class B Unit consisting of one pre-funded warrant to purchase one share of a common
stock and one common stock warrant to purchase one share of common stock at a price of $8.50 per Class A Unit and $8.4998 per Class B
Unit. The pre-funded warrants were issued in lieu of common stock in order to ensure the purchaser did not exceed certain beneficial
ownership limitations. The pre-funded warrants were immediately exercisable at an exercise price of $0.0017 per share, subject to adjustment.
Additionally, the common stock warrants were immediately exercisable at an exercise price of $8.50 per share and expire on November 17,
2024. As of December 31, 2023, there were 64,362 warrants from the November 2019 offering outstanding.

 We
account for the common stock warrants as a derivative instrument, and changes in the fair value of the warrants are included under other
income (expense) in the Company's statements of operations for each reporting period. As of December 31, 2023, the aggregate fair
value of the warrant liability included in the Company's consolidated balance sheet was approximately $17,000. We use the Black-Scholes
option pricing model to determine the fair value of the warrants. As a result, the option-pricing model requires the input of several
assumptions, including the stock price volatility, share price and risk-free interest rate. Changes in these assumptions can materially
affect the fair value estimate. While the liability may only result from a change of control at a point in time, we ultimately may incur
amounts significantly different than the carrying value of the liability.

 We
may not be able to maintain our listing on the NASDAQ Capital Market, which would adversely affect the price and liquidity of our common
stock.

 As
a small capitalization pharmaceutical company, the price of our common shares has been, and is likely to continue to be, highly volatile.
Any announcements concerning us or our competitors, clinical trial results, quarterly variations in operating results, introduction of
new products, delays in the introduction of new products or changes in product pricing policies by us or our competitors, acquisition
or loss of significant customers, partners and suppliers, changes in earnings estimates or our ratings by analysts, regulatory developments,
or fluctuations in the economy or general market conditions, among other factors, could cause the market price of our common shares to
fluctuate substantially. There can be no assurance that the market price of our common shares will not decline below its current price
or that it will not experience significant fluctuations in the future, including fluctuations that are unrelated to our performance.

 Currently
our common stock is quoted on the NASDAQ Capital Market under the symbol "LPCN". We must satisfy certain minimum listing
maintenance requirements to maintain the NASDAQ Capital Market quotation, including certain governance requirements and a series of financial
tests relating to stockholders' equity or net income or market value, public float, number of market makers and stockholders, market
capitalization, and maintaining a minimum bid price of $1.00 per share.

 If
Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:

 a
 limited availability of market quotations for our securities;

 reduced
 liquidity for our securities;

 a
 determination that our common stock is a "penny stock" which will require brokers trading in our common stock to adhere
 to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 a
 limited amount of news and analyst coverage; and

 a
 decreased ability to issue additional securities or obtain additional financing in the future.

 The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as "covered securities." If our common stock continues to be listed on
NASDAQ, our common stock will be a covered security. Although the states are preempted from regulating the sale of our securities, the
federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case.

 Anti-takeover
provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware
law and our stockholder rights plan, might discourage, delay or prevent a change in control of our Company or changes in our Board of
Directors or management and, therefore, depress the trading price of our common stock.

 Our
amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that may depress the
market price of our common stock by acting to discourage, delay or prevent a merger, acquisition or other change in control that stockholders
may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares of our common
stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove members of our Board of Directors
or our management. Our corporate governance documents include provisions:

 limiting
 the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu
 of a meeting;

 requiring
 advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates
 for election to our Board of Directors;

 authorizing
 blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock;
 and

 limiting
 the liability of, and providing indemnification to, our directors and officers.

 As
a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation
Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock from engaging in certain business
combinations with us. Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware
law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium
for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

 Additionally,
on November 5, 2021, we adopted an amended and restated stockholder rights plan that would cause substantial dilution to, and substantially
increase the costs paid by, a stockholder who attempts to acquire us on terms not approved by our board. The intent of the stockholder
rights plan is to protect our stockholders' interests by encouraging anyone seeking control of our Company to negotiate with our
board. However, our stockholder rights plan could make it more difficult for a third party to acquire us without the consent of our board,
even if doing so may be beneficial to our stockholders. This plan may discourage, delay or prevent a tender offer or takeover attempt,
including offers or attempts that could result in a premium over the market price of our common stock. This plan could reduce the price
that stockholders might be willing to pay for shares of our common stock in the future. Furthermore, the anti-takeover provisions of
our stockholder rights plan may entrench management and make it more difficult to replace management even if the stockholders consider
it beneficial to do so.

 The
common warrants issued in the November 2019 Offering include a right to receive the Black Scholes value of the warrants in the event
of a fundamental transaction, which payment would be senior to our common stock.

 The
common warrants issued in the November 2019 Offering provide that, in the event of a "fundamental transaction," including,
among other things, a merger or consolidation of the Company or sale of all or substantially all of the Company's assets, the holders
of such warrants have the option to require the Company to pay to such holders an amount of cash equal to the Black Scholes value of
the warrants. Such amount would be payable prior to any payments to holders of our common stock. The payment of such amount could result
in common stockholders and other warrant holders not receiving any consideration if we were to liquidate, dissolve or wind up, either
voluntarily or involuntarily. In addition, the existence of such right may reduce the value of our common stock, make it harder for us
to sell shares of common stock in offerings in the future, or prevent or delay a change of control.

 We
have no current plans to pay dividends on our common stock and investors must look solely to stock appreciation for a return on their
investment in us.

 We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings
to fund the development and growth of our business. Any payment of future dividends will be at the discretion of our board of directors
and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and
contractual restrictions applying to the payment of dividends and other considerations that the board of directors deems relevant. Investors
may need to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return
on their investment. Investors seeking cash dividends should not purchase our common stock.

 Our
management and directors will be able to exert influence over our affairs.

 As
of December 31, 2023, our executive officers and directors beneficially owned approximately 5.9% of our common stock. These stockholders,
if they act together, may be able to influence our management and affairs and all matters requiring stockholder approval, including significant
corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might affect
the market price of our common stock.

 The
market price of our common stock has been volatile over the past year and may continue to be volatile.

 The
market price and trading volume of our common stock has been volatile over the past year, and it may continue to be volatile. During
2023, our common stock has traded as low as $2.36 and as high as $9.86 per share. We cannot predict the price at which our common stock
will trade in the future, and it may decline. The price at which our common stock trades may fluctuate significantly and may be influenced
by many factors, including our financial results; developments generally affecting our industry; general economic, industry and market
conditions; the depth and liquidity of the market for our common stock; investor perceptions of our business; reports by industry analysts;
announcements by other market participants, including, among others, investors, our competitors, and our customers; regulatory action
affecting our business; and the impact of other "Risk Factors" discussed herein and in our Annual Report. In addition, changes
in the trading price of our common stock may be inconsistent with our operating results and outlook. The volatility of the market price
of our common stock may adversely affect investors' ability to purchase or sell shares of our common stock.

 If
securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price
could decline.

 The
trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about
us or our business. We currently only have limited securities and industry analysts providing research coverage of our Company and may
never obtain additional research coverage by securities and industry analysts. If no additional securities or industry analysts commence
coverage of our Company or if current securities analyst coverage of our Company ceases, the trading price for our stock could be negatively
impacted. If the analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would
likely decline. If analysts cease coverage of us or fail to publish reports on us regularly, demand for our stock could decrease, which
could cause our stock price and trading volume to decline.

 Risks
Relating to Our Financial Position and Capital Requirements

 We
will need substantial additional capital in the future. If additional capital is not available, we will have to delay, reduce or cease
operations.

 We
will need to raise additional capital to continue to fund our operations. Our future capital requirements may be substantial and will
depend on many factors including:

 market
 conditions for raising capital, particularly for life science companies;

 current
 and future clinical trials for our product candidates, including for LPCN 1154, LPCN 2101, LPCN 2203 and LPCN 1148;

 regulatory
 actions of the FDA;

 the
 scope, size, rate of progress, results and costs of completing ongoing clinical trials and development plans with our product candidates;

 the
 cost, timing and outcomes of our efforts to obtain marketing approval for our product candidates in the United States;

 payments
 received under any current or future license agreements, strategic partnerships or collaborations;

 the
 cost of filing, prosecuting and enforcing patent claims;

 the
 costs associated with commercializing our product candidates if we receive marketing approval for product candidates other than TLANDO,
 including the cost and timing of developing internal sales and marketing capabilities or entering into strategic collaborations to
 market and sell our products;

 the
 costs of on-going and future litigation; and

 funding
 additional product line expansions.

 We
believe that our existing capital resources, together with interest thereon, will be sufficient to meet our projected operating
requirements through at least March 31, 2025. 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. While we believe we have sufficient liquidity and capital
resources to fund our projected operating requirements through at least March 31, 2025, we will need to raise additional capital at
some point through the equity or debt markets or through out-licensing activities, either before or after March 31, 2025, to support
our operations, the on-going clinical development of our product candidates, and compliance with regulatory requirements. If the Company is
unsuccessful in raising additional capital, its ability to continue as a going concern will become a risk. 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 1148, LPCN 1144, and 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 or suspend on-going clinical studies.

 Funding
may not be available to us on favorable terms, or at all. Also, market conditions may prevent us from accessing the debt and equity capital
markets, including sales of our common stock through the ATM Offering (as defined below). If we are unable to obtain adequate financing
when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical studies, research and development programs
or, if any of our product candidates other than TLANDO receive approval from the FDA, commercialization efforts. We may seek to raise
any necessary additional capital through a combination of public or private equity offerings, including the ATM Offering, debt financings,
collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. These arrangements may
not be available to us or available on terms favorable to us. To the extent that we raise additional capital through marketing and distribution
arrangements, other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable
rights to our product candidates, future revenue streams, research programs or product candidates or grant licenses on terms that may
not be favorable to us. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing
stockholders will be diluted, and the terms of these securities may include liquidation or other preferences, warrants or other terms
that adversely affect our stockholders' rights or further complicate raising additional capital in the future. If we raise additional
capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as
incurring additional debt, making capital expenditures or declaring dividends. If we are unable, for any reason, to raise needed capital,
we will have to reduce costs, delay research and development programs, liquidate assets, dispose of rights, commercialize products or
product candidates earlier than planned or on less favorable terms than desired, or reduce or cease operations.

 Raising
additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights.

 We
may seek additional capital through a combination of private and public equity offerings, debt financings, collaborations, and strategic
and licensing arrangements. To the extent that we raise additional capital through the sale of common stock or securities convertible
or exchangeable into common stock, current stockholders' ownership interest in the Company will be diluted. In addition, the terms
may include liquidation or other preferences that materially adversely affect their rights as a stockholder. Debt financing, if available,
would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to
take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional
funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights
to our product candidates, our intellectual property, future revenue streams or grant licenses on terms that are not favorable to us.

 We
cannot predict when we will generate product revenues and may never achieve or maintain profitability.

 Our
ability to become profitable depends upon our ability to generate revenue from product sales and/or licensing agreements. To date, we
have not generated any significant revenue from product sales of TLANDO or our other drug candidates in the current pipeline, and we
do not know when, or if, we will generate significant revenue from product sales. Our ability to generate revenue depends on a number
of factors, including, but not limited to, our ability to:

 other
 than for TLANDO in the U.S., obtain U.S. and foreign marketing approval for our product candidates;

 commercialize
 our product candidates by developing a sales force and/or entering into licensing agreements or collaborations with partners/third
 parties, either before or after obtaining marketing approval for our product candidates; and

 achieve
 market acceptance of our product candidates in the medical community and with third-party payors.

 Even
if our product candidates other than TLANDO are approved for commercial sale, we expect to incur significant costs as we prepare to commercialize
them. Even if we receive FDA approval for our product candidates, they may not be commercially successful drugs. We may not achieve profitability
soon after generating product sales, if ever. If we are unable to generate product revenue, we will not become profitable and may be
unable to continue operations without continued funding.

 Accordingly,
the likelihood of our success must be evaluated in light of many potential challenges and variables associated with an early-stage drug
development company, many of which are outside of our control, and past operating or financial results should not be relied on as an
indication of future results. If one or more of our product candidates is approved for commercial sale and we retain commercial rights,
we anticipate incurring significant costs associated with commercializing any such approved product candidate. Therefore, even if we
are able to generate revenues from the sale of any approved product, we may never become profitable. Because of the numerous risks and
uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amount of expenses and when
we will be able to achieve or maintain profitability, if ever.

 We
have incurred significant operating losses in most years since our inception and anticipate that we will incur continued losses for the
foreseeable future.

 We have focused a significant portion of our efforts on developing
TLANDO and more recently on our oral neuroactive steroids LPCN 1154 and LPCN 2101, LPCN 1148, and LPCN 1144. We have funded our operations
to date through sales of our equity securities, debt, and payments received under our license and collaboration arrangements. We have
incurred losses in most years since our inception. As of December 31, 2023, we had an accumulated deficit of $199.8 million. Substantially
all of our operating losses resulted from costs incurred in connection with our research and development programs and from general and
administrative costs associated with our operations. These losses, combined with expected future losses, have had and will continue to
have an adverse effect on our stockholders' equity and working capital. We expect our research and development expenses to increase
in connection with clinical trials associated with our oral neuroactive steroids LPCN 1154, LPCN 2101, LPCN 2203, and LPCN 1148, and LPCN
1144 and LPCN 1107, if further clinical trials are initiated. As a result, we expect to continue to incur significant operating losses
for the foreseeable future as we evaluate further clinical development of LPCN 1154, LPCN 2101, LPCN 2203, LPCN 1148, LPCN 1144, and LPCN
1107 and our other programs and continued research efforts. Because of the numerous risks and uncertainties associated with developing
pharmaceutical products, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

 Our
operating results may fluctuate significantly, and any failure to meet financial expectations may disappoint securities analysts or investors
and result in a decline in the price of our securities.

 We
have a history of operating losses. Our operating results have fluctuated in the past and are likely to do so in the future. These fluctuations
could cause our share price to decline. Due to fluctuations in our operating results, we believe that period-to-period comparisons of
our results are not indicative of our future performance. It is possible that in some future quarter or quarters, our operating results
will be above or below the expectations of securities analysts or investors. In this case, the price of our securities could decline.

 Risks
Relating to Our Intellectual Property

 Our
success depends in part on our ability to protect our intellectual property. It is difficult and costly to protect our proprietary rights
and technology, and we may not be able to ensure their protection.

 Our
commercial success will depend in large part on obtaining and maintaining patent, trademark and trade secret protection of our product
candidates, their respective formulations, methods used to manufacture them and methods of treatment, as well as successfully defending
these patents against third party challenges. Our ability to stop unauthorized third parties from making, using, selling, offering to
sell, or importing our product candidates, once commercialized, is dependent upon the extent to which we have rights under valid and
enforceable patents or trade secrets that cover these products and activities.

 The
patent positions of pharmaceutical, biopharmaceutical and related companies can be highly uncertain and involve complex legal and factual
questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in patents
in these fields has emerged to date in the United States. There have been changes regarding how patent laws are interpreted, and both
the United States Patent and Trademark Office ("USPTO") and Congress have enacted radical changes to the patent system. We
cannot accurately predict future changes in the interpretation of patent laws or changes to patent laws which might be enacted into law.
Those changes may materially affect our patents, our ability to obtain patents and/or the patents and applications of our collaborators
and licensors. The patent situation in these fields outside the United States is even more uncertain. Changes in either the patent laws
or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property or
narrow the scope of our patent protection. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in the
patents we own or which we license or third-party patents.

 The
degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately
protect our rights or permit us to gain or keep a competitive advantage. For example:

 others
 may be able to make or use compounds that are the same or similar to the pharmaceutical compounds used in our product candidates but
 that are not covered by the claims of our patents;

 the
 Active Pharmaceutical Ingredients ("APIs") in our licensed product TLANDO and current product candidates LPCN 1154, LPCN
 1148, LPCN 1144, LPCN 1111, and LPCN 1107 are, or may soon become, commercially available in generic drug products, and no patent
 protection may be available without regard to formulation or method of use;

 we
 may not be able to detect infringement against our owned or licensed patents, which may be especially difficult for manufacturing
 processes or formulation patents;

 we
 might not have been the first to make the inventions covered by our issued patents or pending patent applications or those we license;

 we
 might not have been the first to file patent applications for these inventions;

 others
 may independently develop similar or alternative technologies or duplicate any of our technologies;

 it
 is possible that our pending patent applications or those of our licensor will not result in issued patents;

 it
 is possible that there are dominating patents to any of our product candidates of which we are not aware;

 it
 is possible that there are prior public disclosures that could invalidate our patents, or parts of our patents, of which we are not
 aware;

 it
 is possible that others may circumvent our owned or licensed patents;

 it
 is possible that there are unpublished applications or other patent applications maintained in secrecy that may issue later than
 our patents/applications but may have priority dates that are earlier than our priority dates and may have claims covering our products
 or technology similar to ours;

 the
 laws of foreign countries may not protect our proprietary rights to the same extent as the laws of the United States;

 the
 claims of our owned or licensed issued patents or patent applications, if and when issued, may not cover our product candidates;

 our
 issued patents or those of our licensor may not provide us with any competitive advantages, or may be narrowed in scope, be held
 invalid or unenforceable as a result of legal challenges by third parties;

 our
 licensor or licensees as the case may be, who have access to our patents, may attempt to enforce our owned or licensed patents, which
 if unsuccessful, may result in narrower scope of protection of our owned or licensed patents or our owned or licensed patents becoming
 invalid or unenforceable;

 we
 may not develop additional proprietary technologies for which we can obtain patent protection; or

 the
 patents of others may have an adverse effect on our business.

 We
also may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable.
However, trade secrets are difficult to protect, and we have limited control over the protection of trade secrets used by our collaborators
and suppliers. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific
collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third
party illegally obtained and is using for any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.
In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently
develop equivalent knowledge, methods, and know-how. If our confidential or proprietary information is divulged to or acquired by third
parties, including our competitors, our competitive position in the marketplace will be harmed and our ability to successfully penetrate
our target markets could be severely compromised.

 If any of our owned or licensed patents are found to be invalid or
unenforceable, or if we are otherwise unable to adequately protect our rights, it could have a material adverse impact on our business
and our ability to commercialize or license our technology and products. Additionally, we currently do not have patent protection for
some of our product candidates in many countries, including large territories such as India, Russia, and China, and we will be unable
to prevent unauthorized third parties from using our intellectual property in those countries unless we can file patent applications and
obtain patents in those countries that cover our product candidates. Likewise, our United States patents covering certain technology used
in our product candidates, including TLANDO, are expected to expire on various dates through 2041. Upon the expiration of these patents,
we will lose the right to exclude others from practicing these inventions to the extent that at those times we have no additional issued
patents to protect our product candidates, including TLANDO. Additionally, if these are our only patents listed in the FDA Orange Book,
should we have an FDA-approved and marketed product at that time, their expiration will mean that we lose certain advantages that come
with Orange Book listing of patents. The expiration of these patents could also have a similar material adverse effect on our business,
results of operations, financial condition and prospects. Moreover, if we are unable to commence or continue any action relating to the
defense of our patents, we may be unable to protect our product candidates.

 If
we do not obtain additional protection under the Drug Price Competition and Patent Term Restoration Act and similar foreign legislation
by extending the patent terms and obtaining data exclusivity for our product candidates, our business may be materially harmed.

 Depending
upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or more of our U.S. patents may be eligible
for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman
Act. The Hatch-Waxman Act permits a patent restoration term of up to five years as compensation for patent term lost during product development
and the FDA regulatory review process. However, we may not be granted an extension because of, for example, failing to apply within applicable
deadlines, failing to apply prior to expiration of relevant patents or competitor's prior product launch or otherwise failing to
satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we
request. If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we request, our
competitors may obtain approval of competing products following our patent expiration, and our ability to generate revenues could be
materially adversely affected.

 We
may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights,
and we may be unable to protect our rights to our products and technology.

 If
we or our collaborators choose to go to court to stop a third party from using the inventions claimed in our owned or licensed patents,
that third party may ask a court to rule that the patents are invalid and should not be enforced against that third party. These lawsuits
are expensive and would consume time and other resources, including financial resources, even if we were successful in stopping the infringement
of these patents. In addition, there is a risk that a court will decide that these patents are not valid or not enforceable and that
we do not have the right to stop others from using the inventions.

 There
is also the risk that, even if the validity of these patents is not challenged or is upheld, the court will refuse to stop the third
party on the ground that such third-party's activities do not infringe on our owned or licensed patents. In addition, the U.S.
Supreme Court has changed and continues to change some standards relating to the granting of patents and assessing the validity of patents.
As a consequence, issued patents may be found to contain invalid claims according to the newly revised standards. Some of our owned or
licensed patents may be subject to challenge and subsequent invalidation or significant narrowing of claim scope in a reexamination or
other proceeding before the USPTO, or during litigation, under the revised criteria which make it more difficult to obtain or maintain
patents.

 While
our in-licensed patents and applications are not currently used in our product candidates, should we develop other product candidates
that are covered by this intellectual property, we may rely on our licensor to file and prosecute patent applications and maintain patents
and otherwise protect the intellectual property we license from them. Our licensor has retained the first right, but not the obligation,
to initiate an infringement proceeding against a third-party infringer of the intellectual property licensed to us, and enforcement of
our in-licensed patents or defense of any claims asserting the invalidity or unenforceability of these patents would also be subject
to the control or cooperation of our licensor. It is possible that our licensor's defense activities may be less vigorous than
had we conducted the defense ourselves.

 We
also license our patent portfolio, including U.S. and foreign patents and patent applications that cover TLANDO and our other product
candidates, to third parties for their respective products and product candidates. Under our agreements with our licensees, we have the
right, but not the obligation, to enforce our current and future licensed patents against infringers of our licensees. In certain cases,
our licensees may have primary enforcement rights and we have the obligation to cooperate. In the event of an enforcement action against
infringers of our licensees, our licensees might not have the interest or resources to successfully preserve the patents, the infringers
may countersue, and as a result our patents may be found invalid or unenforceable or of a narrower scope of coverage and leave us with
no patent protection for TLANDO and our other product candidates.

 We
may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination,
inter partes review, post-grant review or interference proceedings challenging our owned or licensed patent rights or the patent rights
of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our owned
or licensed patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment
to us, or result in our inability to manufacture or commercialize products without infringing third party patent rights. In addition,
if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from
collaborating with us to license, develop or commercialize current or future product candidates and impair our ability to raise needed
capital.

 If
we are required to defend patent infringement actions brought by other third parties, or if we sue to protect our own patent rights or
otherwise to protect our proprietary information and to prevent its disclosure, we may be required to pay substantial litigation costs
and managerial attention and financial resources may be diverted from business operations even if the outcome is in our favor.

 If
we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome
in that litigation would have a material adverse effect on our business.

 Our
commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product
candidates and use our proprietary technologies without infringing the proprietary rights of third parties. Numerous U.S. and foreign
patents and pending patent applications, which are owned by third parties, exist in the fields relating to our product candidates. As
the biotechnology, pharmaceutical, and related industries expand and more patents are issued, the risk increases that others may assert
that our product or product candidates infringe the patent rights of others. Moreover, it is not always clear to industry participants,
including us, which patents cover various types of drugs, products or their formulations or methods of use. Thus, because of the large
number of patents issued and patent applications filed in our fields, there may be a risk that third parties may allege they have patent
rights encompassing our product, product candidates, technology, or methods. For example, on November 2, 2015, Clarus Therapeutics Holdings,
Inc. (Clarus) filed a complaint against us in the United States District Court for the District of Delaware alleging that TLANDO would
infringe the Clarus 428 Patent, and the complaint sought damages, declaratory and injunctive relief. On October 6, 2016, United States
District Court of the District of Delaware granted our motion to dismiss the lawsuit filed by Clarus, because at the time there was no
actionable infringement on Clarus' 428 patent.

 In
addition, there may be issued patents of third parties of which we are currently unaware, that are infringed or are alleged to be infringed
by our product candidates or proprietary technologies. Because some patent applications in the United States may be maintained in secrecy
until the patents are issued, because patent applications in the United States and many foreign jurisdictions are typically not published
until eighteen months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot
be certain that others have not filed patent applications for technology covered by our or our licensor's patents or our pending
applications, or that we were the first to invent the technology. Our competitors may have filed, and may in the future file, patent
applications covering our products or technology similar to ours. Any such patent application may have priority over our owned or licensed
patent applications or patents, which could further require us to obtain rights to issued patents covering such technologies. If another
party has filed a U.S. patent application on inventions similar to those owned or licensed by us, we may have to participate in an interference
proceeding declared by the USPTO to determine priority of invention in the United States. If another party has an allowed reason to question
the validity of our owned or licensed U.S. patents, the third party can request that the USPTO reexamine the patent claims, which may
result in a loss of scope of some claims or a loss of the entire patent. In addition to potential infringement claims, interference and
reexamination proceedings, we may become a party to patent opposition proceedings in the European Patent Office or post-grant proceedings
in the United States where either our patents are challenged, or we are challenging the patents of others. The costs of these proceedings
could be substantial, and it is possible that such efforts would be unsuccessful, for example if the other party had independently arrived
at the same or similar invention prior to our invention, resulting in a loss of our U.S. patent position with respect to such inventions.
We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging
that our product candidates and/or proprietary technologies infringe their intellectual property rights. These lawsuits are costly and
could adversely affect our results of operations and divert the attention of managerial and technical personnel. There is a risk that
a court would decide that we or our commercialization partners are infringing the third party's patents and would order us or our
partners to stop the activities covered by the patents. In addition, there is a risk that a court will order us or our partners to pay
the other party damages for having violated the other party's patents.

 If
a third-party's patent was found to cover our product candidates, proprietary technologies or their uses, we or our collaborators
could be enjoined by a court and required to pay damages and could be unable to commercialize any one or more of our product candidates
or use our proprietary technologies unless we or they obtain a license to the patent. A license may not be available to us or our collaborators
on acceptable terms, if at all. In addition, during litigation, the patent holder could obtain a preliminary injunction or other equitable
relief which could prohibit us from making, using or selling our products, technologies or methods pending a trial on the merits, which
could be years away.

 There
is a substantial amount of litigation involving patent and other intellectual property rights in the biotechnology, pharmaceutical, and
related industries generally. If a third-party claims that we or our collaborators infringe its intellectual property rights, we may
face a number of issues, including, but not limited to:

 infringement
 and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert
 our management's attention from our core business;

 substantial
 damages for infringement, which we may have to pay if a court decides that the product at issue infringes on or violates the third
 party's rights, and if the court finds that the infringement was willful, we could be ordered to pay treble damages and the
 patent owner's attorneys' fees;

 a
 court prohibiting us from selling or licensing the product unless the third-party licenses its product rights to us, which it is
 not required to do;

 if
 a license is available from a third party, we may have to pay substantial royalties, upfront fees and/or grant cross-licenses to
 intellectual property rights for our products; and

 redesigning
 our products or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and
 time.

 Some
of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially
greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material
adverse effect on our ability to raise the funds necessary to continue our operations or otherwise have a material adverse effect on
our business, results of operations, financial condition, and prospects.

 Although
we own worldwide rights to our product candidates, we do not have patent protection for the product candidates in a significant number
of countries, and we will be unable to prevent infringement in those countries.

 Our
patent portfolio related to our product candidates includes patents in the United States and other foreign countries. The covered technology
and the scope of coverage varies from country to country. For those countries where we do not have granted patents, we have no ability
to prevent the unauthorized use of our intellectual property, and third parties in those countries may be able to make, use, or sell
products identical to, or substantially similar to our product candidates.

 Obtaining
and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements
imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

 Periodic
maintenance/annuity fees on our owned or licensed patents and patent applications are due to be paid to respective patent offices in
several stages over the lifetime of the patents and applications. In addition, the USPTO and various foreign governmental patent agencies
require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
There are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial
or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and
this circumstance would have a material adverse effect on our business.

 We
also may rely on trade secrets and confidentiality agreements to protect our technology and know-how, especially where we do not believe
patent protection is appropriate or obtainable. However, trade secrets are difficult to protect, and we have limited control over the
protection of trade secrets used by our collaborators and suppliers. Although we use reasonable efforts to protect our trade secrets,
our employees, consultants, contractors, outside scientific collaborators, and other advisors may unintentionally or willfully disclose
our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive
and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect
trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how. If our confidential or
proprietary information is divulged to or acquired by third parties, including our competitors, our competitive position in the marketplace
will be harmed and our ability to successfully generate revenues from our product candidates, if approved by the FDA or other regulatory
authorities, could be adversely affected.

 We
may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

 As
is common in the biotechnology, pharmaceutical and related industries, we employ individuals who were previously employed at other biotechnology
or pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending,
we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary
information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending
against these claims, litigation could result in substantial costs and be a distraction to management, which would adversely affect our
financial condition.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Risk
Management and Strategy

 We
regularly assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities, and test those systems
pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program. To protect
our information systems from cybersecurity threats, we use various security tools that are designed to help identify, escalate, investigate,
resolve, and recover from security incidents in a timely manner. Our board of directors assesses risks based on probability and potential
impact to key business systems and processes as part of our overall risk management program overseen by the board of directors. Risks
that are considered high are incorporated into our overall risk management program. We collaborate with third parties to assess the effectiveness
of our cybersecurity prevention and response systems and processes and to assist in the identification, verification, and validation
of cybersecurity risks, as well as to support associated mitigation plans when necessary. We have also developed a third-party cybersecurity
risk management process to conduct due diligence on external entities, including those that perform cybersecurity services. Cybersecurity
threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our
business strategy, results of operations, or financial condition. Refer to the risk factor captioned " Cyber security risks and
the failure to maintain the integrity of company, employee or guest data could expose us to data loss, litigation and liability, and
our reputation could be significantly harmed " in Part I, Item 1A. "Risk Factors" for additional details regarding
cybersecurity risks and potential impacts on our business.

 Governance

 Our
board of directors oversees our risk management process, including as it pertains to cybersecurity risks, which focuses on the most significant
risks we face in the short-, intermediate-, and long-term timeframe. Management is responsible for the operational oversight of company-wide
cybersecurity strategy, policy, and standards across relevant departments to assess and help prepare us to address cybersecurity risks.
Meetings of our board of directors include discussions and presentations from management regarding specific risk areas throughout the
year, including, among others, those relating to cybersecurity threats, and reports from management on our enterprise risk profile on
an annual basis. The board of directors reviews our cybersecurity risk profile with management on a periodic basis using key performance
and/or risk indicators. These key performance indicators are metrics and measurements designed to assess the effectiveness of our cybersecurity
program in the prevention, detection, mitigation, and remediation of cybersecurity incidents. We take a risk-based approach to cybersecurity
and have implemented cybersecurity policies throughout our operations that are designed to address cybersecurity threats and incidents.

 ITEM
2. PROPERTIES

 Our
corporate headquarters are located in a leased facility in Salt Lake City, Utah. Our lease expires on February 28, 2025. We believe that
our existing facility is suitable and adequate and that we have sufficient capacity to meet our current anticipated needs.

 ITEM
3. LEGAL PROCEEDINGS

 On
April 2, 2019, we 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. patents: 9,034,858; 9,205,057; 9,480,690; 9,757,390; 6,569,463; and
6,923,988. However, on February 11, 2020, we voluntarily dismissed allegations of patent infringement for expired U.S. Patent Nos. 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. We answered Clarus's counterclaims on April 29, 2019. 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;
9,205,057; 9,480,690; and 9,757,390 invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112. Clarus
still had remaining claims before the Court. On July 13, 2021, we entered into 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 (as described below). Under the terms of the Global Agreement, Lipocine 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 July 15, 2021, the Court dismissed
with prejudice Lipocine's claims and Clarus' counterclaims. In April 2022, we agreed to an amendment to Section 3.1 of the
Global Agreement with Clarus pursuant to which we agreed to settle the payments due in July 2022 and 2023 for $1,250,000 rather than
the $1,500,000 total future payments due. No future royalties are owing from either party.

 On
November 14, 2019, we and certain of our officers were named as defendants in a purported shareholder class action lawsuit, Solomon
Abady v. Lipocine Inc. et al., 2:19-cv-00906-PMW, filed in the United District Court for the District of Utah. The complaint alleges
that the defendants made false and/or misleading statements and/or failed to disclose that our filing of the NDA for TLANDO to the FDA
contained deficiencies and as a result the defendants' statements about our business and operations were false and misleading and/or
lacked a reasonable basis in violation of federal securities laws. The lawsuit seeks certification as a class action (for a purported
class of purchasers of the Company's securities from March 27, 2019, through November 8, 2019), compensatory damages in an unspecified
amount, and unspecified equitable or injunctive relief. We have insurance that covers claims of this nature. The retention amount payable
by us under our policy is $1.25 million. On April 14, 2023, a judgment was issued
ordering the case dismissed with prejudice and closure of the action.

 ITEM
4. MINE SAFETY DISCLOSURES

 Not
Applicable.

 PART
II

 ITEM
5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market
Information

 Our
common stock is quoted on The NASDAQ Capital Market under the symbol "LPCN".

 Holders

 As
of March 5, 2024, there were approximately 87 holders of record of our common stock. This number does not include an undetermined number
of stockholders whose stock is held in "street" or "nominee" name.

 Dividends

 We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain any future earnings to
finance growth and development and therefore do not anticipate paying cash dividends in the foreseeable future.

 ITEM 6. RESERVED

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The
following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and the related notes thereto and other financial information included elsewhere in this report.

 As
used in the discussion below, "we," "our," and "us" refers to the historical financial results of
Lipocine.

 Forward
Looking Statements

 This
section and other parts of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on certain assumptions and include any statement that does not directly
relate to any historical or current fact. Forward-looking statements may refer to such matters as products, product benefits, pre-clinical
and clinical development timelines, clinical and regulatory expectations and plans, anticipated financial performance, future revenues
or earnings, business prospects, projected ventures, new products and services, anticipated market performance, future expectations for
liquidity and capital resources needs and similar matters. Such words as "may", "will", "expect",
"continue", "estimate", "project", and "intend" and similar terms and expressions are
intended to identify forward looking statements. Forward-looking statements are not guarantees of future performance and our actual results
may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in Part I, Item 1A (Risk Factors) of this Form 10-K. Except as required by applicable law, we
assume no obligation to revise or update any forward-looking statements for any reason.

 Overview
of Our Business

 We
are a biopharmaceutical company focused on leveraging our proprietary Lip'ral platform to develop differentiated products through
the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System ("CNS") disorders.
Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.
Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs. We have a portfolio of differentiated
innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone
supplementation for men and women.

 We
entered into a license agreement for the development and commercialization our product candidate, TLANDO, an oral testosterone replacement
therapy ("TRT") comprised of testosterone undecanoate ("TU"). On January 12, 2024, we entered into a license
agreement (the "Verity License Agreement") 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 U.S. and Canada. 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).

 Additional clinical development pipeline candidates include: LPCN 1154
for postpartum depression ("PPD"); LPCN 2101 for epilepsy; and LPCN 2203 for essential tremor. In addition to our CNS 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.

 To
date, we have funded our operations primarily through the sale of equity securities, debt and convertible debt and through up-front payments,
research funding and royalty and milestone payments from our license and collaboration arrangements. We have not generated any revenues
from product sales and while we expect to generate royalties from our Licensee's sales of TLANDO, we do not expect to generate
revenue from product sales from our other product candidates unless and until approval.

 We
have incurred losses in most years since our inception. As of December 31, 2023, we had an accumulated deficit of $199.8 million. Income
and losses fluctuate year to year, primarily depending on the nature and timing of research and development occurring on our product
candidates. Our net loss was $16.4 million for the year ended December 31, 2023, compared to $10.8 million for the year ended December
31, 2022. Substantially all of our operating losses resulted from expenses incurred in connection with our product candidate development
programs, our research activities and general and administrative costs associated with our operations.

 We
expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

 subject
 to resource availability, conduct further development of our other product candidates, including LPCN 1154, LPCN 2101, LPCN 2203,
 and LPCN 1148;

 continue
 our research efforts;

 research
 new products or new uses for our existing products;

 maintain,
 expand and protect our intellectual property portfolio; and

 provide
 general and administrative support for our operations.

 To
fund future long-term operations, including the potential commercialization of any of our product candidates, we will need to raise additional
capital. The amount and timing of future funding requirements will depend on many factors, including capital market conditions, regulatory
requirements and commercial success of TLANDO, regulatory requirements related to our other product development programs, the timing
and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development
programs, our ability to license and/or partner our products to third parties, the pursuit of various potential commercial activities
and strategies associated with our development programs and related general and administrative support. We anticipate that we will seek
to fund our operations through public or private equity or debt financings or other sources, such as potential license, partnering and
collaboration agreements. We cannot be certain that anticipated additional financing will be available to us on favorable terms, in amounts
sufficient to fund our operations, or at all. Although we have previously been successful in obtaining financing through public and private
equity securities offerings and our license and collaboration agreements, there can be no assurance that we will be able to do so in
the future.

 Corporate
Strategy

 Our
goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip'ral drug delivery technology platform
to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders. The key components
of our strategy are to:

 Advance
LPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids ("NAS")
which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated
oral therapeutics. Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression ("PPD")
with potential for outpatient use.

 Support
our Licensee in commercialization of our licensed oral TRT option. We believe the TRT market needs a differentiated, convenient oral
option. We have exclusively licensed rights to TLANDO to Verity for commercialization of TLANDO in the U.S. and Canada. 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.

 Develop
partnership(s) to continue the advancement of non-core pipeline assets. We continuously strive to prioritize our resources in seeking
partnerships of our pipeline assets. We are currently exploring partnering of our liver programs LPCN 1144, our candidate for treatment
of non-cirrhotic NASH and LPCN 1148 for the management of decompensated cirrhosis, and LPCN 1107, our candidate for prevention of pre-term
birth. We are 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.

 Financial
Operations Overview

 To
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 December 31, 2023, we have generated $41.9 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.

 Research
and Development Expenses

 Research
and development expenses consist primarily of salaries, benefits, stock-based compensation and related personnel costs, fees paid to
external service providers such as contract research organizations and contract manufacturing organizations, contractual obligations
for clinical development, clinical sites, manufacturing and scale-up for late-stage clinical trials, formulation of clinical drug supplies,
and expenses associated with regulatory submissions. Research and development expenses also include an allocation of indirect costs,
such as those for facilities, office expense and depreciation of equipment based on the ratio of direct labor hours for research and
development personnel to total direct labor hours for all personnel. We expense research and development expenses as incurred. Since
our inception, we have spent approximately $147.2 million in research and development expenses through December 31, 2023.

 On
January 12, 2024, we entered into the Verity License Agreement, pursuant to which we granted to Verity an exclusive, royalty-bearing,
sublicensable right and license to develop and commercialize our TLANDO product for TRT in the U.S. and Canada. Any FDA required post-marketing
studies will also be the responsibility of our Licensee, Verity. On March 28, 2022, TLANDO was approved by the FDA as a TRT in adult
males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism. On January 31, 2024, our license
agreement with former licensee, Antares Pharma, Inc. ("Antares"), was terminated and the transition of the U.S. commercial
rights for TLANDO from Antares to Verity was completed on February 1, 2024, for the distribution, marketing and sale of TLANDO. 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. and Canada.

 We
expect to continue to incur significant costs as we develop our other product candidates, including our CNS product candidates as well
as the development of any future pipeline product candidates.

 In
general, the cost of clinical trials may vary significantly over the life of a project as a result of uncertainties in clinical development,
including, among others:

 the
 number of sites included in the trials;

 the
 length of time required to enroll suitable subjects;

 the
 duration of subject follow-ups;

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

 the
 cost, timing and outcome of regulatory review; and

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

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

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

 our
 dependence on third-party manufacturers for the production of satisfactory finished product for registration and launch should regulatory
 approval be obtained on any of our product candidates;

 the
 potential for future license or co-promote arrangements for our product candidates, when such arrangements will be secured, if at
 all, and to what degree such arrangements would affect our future plans and capital requirements; and

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

 A
change of outcome for any of these variables with respect to the development of our product development candidates could mean a substantial
change in the costs and timing associated with these efforts, could require us to raise additional capital, and may require us to reduce
operations.

 Given
the stage of clinical development and the significant risks and uncertainties inherent in the clinical development, manufacturing
and regulatory approval process, we are unable to estimate with any certainty the time or cost to complete the development of LPCN
1154, LPCN 2101, LPCN 2203, 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 1107 and for TLANDO and LPCN 1111 outside of the U.S. and Canada.

 We
expect research and development expenses to increase 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 1107. We are
exploring the possibility of licensing LPCN 1144, LPCN 1148, 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, business development, and support functions. Other general and administrative expenses include rent and utilities, travel expenses,
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.

 We
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.

 Other
Expense (Income), Net

 Other
expense (income), net consists primarily of interest income earned on our cash, cash equivalents and marketable investment securities,
imputed interest on minimum royalties under the license agreement we had with Antares, which was terminated January 31, 2024, gains on
our warrant liability and gains on our litigation liability.

 Results
of Operations

 Comparison
of the Years Ended December 31, 2023 and 2022

 The
following table summarizes our results of operations for the years ended December 31, 2023 and 2022:

 2023

 2022

 Variance

 $
 (2,850,818
)

 $

 $
 (3,350,818
)

 Research and development expenses

 10,175,251

 8,556,888

 1,618,363

 General and administrative expenses

 4,904,888

 4,062,487

 842,401

 Interest and investment income

 1,366,940

 572,578

 794,362

 Interest expense

 -

 (27,098
)

 27,098

 Unrealized gain on warrant liability

 212,690

 565,940

 (353,250
)

 Gain on litigation settlement

 -

 250,000

 (250,000
)

 Income tax expense

 (755
)

 (681
)

 (74
)

 We
recognized a net reversal of variable consideration revenue of $2.9 million during the year ended December 31, 2023, compared to
revenue of $500,000 during the year ended December 31, 2022. Net reversal of variable consideration revenue in 2023 was mainly
attributable to the reversal of variable consideration revenue recognized for minimum guaranteed royalties in 2021 under the license
agreement with Antares, offset by $110,000 in license revenue payments received from Spriaso under a licensing agreement in the
cough and cold field. License revenue in 2022 was related to a non-refundable cash fee of $500,000 received from Antares for
consideration of a 90-day extension to exercise its option to license LPCN 1111. On June 30, 2022, Antares' option to license
TLANDO XR expired and was not exercised. On October 2, 2023, the Company received notice from Antares of Antares' termination
of the Antares License Agreement which stated that the Antares License Agreement will terminate effective January 31, 2024. On
January 12, 2024, the Company entered into the Verity License Agreement with Verity. 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.

 Research
and Development Expenses

 We
recorded research and development expenses of $10.2 million and $8.6 million, respectively, for the years ended December 31, 2023 and
2022. The increase in research and development expenses during the year ended December 31, 2023 was primarily due to a $1.2 million increase
in contract research organization expense related to our LPCN 1154 clinical studies, a $591,000 increase in TLANDO manufacturing related
costs, a $560,000 increase related to our Phase 2 POC study in male patients with cirrhosis with LPCN 1148, and a $537,000 increase in
personnel expense primarily resulting from additional headcount. These increases are offset by a $600,000 decrease related to LPCN 1111
scale up costs in 2022, a $416,000 decrease in contract research organization expense and outside consulting costs related to the LPCN
1144 LiFT Phase 2 clinical study in NASH subjects, a $144,000 decrease in our LPCN 1107 clinical study, and a $123,000 decrease
in other research and development activities.

and Administrative Expenses

 We recorded general and administrative
expenses of $4.9 million and $4.1 million, respectively, for the years ended December 31, 2023 and 2022. The increase in general and administrative
expenses during the year ended December 31, 2023 was primarily due to a $374,000 increase in business development and strategic advisory
services related expenses, a $217,000 increase in legal fees relating to corporate matters such as our reverse stock split, potential
licensing partnerships, and corporate strategy, a $219,000 increase in personnel related costs, a $188,000 increase in franchise taxes
resulting from our increase in authorized shares and reverse stock split, a $133,000 increase in director fees, a $41,000 increase in
other general and administrative expenses and a $22,000 increase in royalty expense relating to the net sales of TLANDO. These increases
were offset by a $222,000 decrease in corporate insurance expense, a $138,000 decrease related to the recruitment of two additional directors,
and a $8,000 decrease in our various consulting and professional fees.

 Interest
and Investment Income

 The
increase in interest and investment income during the year ended December 31, 2023 was due to higher interest rates in 2023 compared
to 2022, despite declining cash and marketable investment securities balances quarter over quarter in 2023.

 Interest
Expense

 The
decrease in interest expense during the year ended December 31, 2023 is due to a decrease in interest expense on our Loan and Security
Agreement with SVB, mainly as a result of lower principal balances in 2023 compared to 2022 as the SVB loan matured and was paid in full
in June of 2022.

 Unrealized
Loss (Gain) on Warrant Liability

 We
recorded gains of $213,000 and $566,000, respectively, on warrant liability during the years ended December 31, 2023 and 2022 related
to the change in the fair value of outstanding common stock warrants issued in the November 2019 Offering. The gains in 2023 and 2022
were attributable to a decrease in the value of warrants outstanding as of December 31, 2023 as compared to December 31, 2022, and a
decrease in the value of warrants outstanding as of December 31, 2022 as compared to December 31, 2021. These decreases in value were
due to a decrease in our stock price and a shorter term remaining on the outstanding warrants. There were no common stock warrants from
the November 2019 Offering exercised during 2023 or 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.

 Litigation
Settlement

the year ended December 31, 2022, we recorded a gain on the settlement of litigation liability of $250,000 as a result of the April 2022
Amendment to Global Agreement with Clarus ("Amended Settlement Agreement"). 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 Global
Agreement agreed to in 2021. Under the terms of the Global Agreement we entered into in 2021, 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 which was
to be paid on July 13, 2023. No future royalties are owing from either party. On July 15, 2021, the Court dismissed with prejudice the
Company's claims and Clarus' counterclaims.

 Liquidity
and Capital Resources

 Since
our inception, our operations have been primarily financed through sales of our equity securities, debt and payments received under our
license and collaboration arrangements. We have devoted our resources to funding research and development programs, including discovery
research, 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 clinical development of LPCN 1154, LPCN 2101,
LPCN 2203 and any other product candidate, including continued research efforts.

 As
of December 31, 2023, we had $22.0 million of unrestricted cash, cash equivalents and marketable investment securities compared to $32.5
million at December 31, 2022.

 On
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. and Canada. 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. and Canada. We
are 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 percentages of 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.

 On
March 6, 2017, we entered into a sales agreement ("Sales Agreement") with Cantor Fitzgerald & Co. ("Cantor")
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 (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. We have
also provided Cantor with customary indemnification rights.

 We
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.

 As
of December 31, 2023, we 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 year ended December 31, 2023, we sold 81,000
shares of our common stock pursuant to the ATM Offering at a weighted-average sales price of $5.36 per share, resulting in net proceeds
of approximately $405,000, under the Sales Agreement which is net of approximately $24,000 in expenses. During the year ended December
31, 2022, we did not sell any shares of our common stock pursuant to the ATM Offering. As of December 31, 2023, we had $40.8 million
available for sale under the Sales Agreement. However, as of November 22, 2023, we are 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 common stock pursuant to the Sales Agreement having an aggregate offering price of up to $5.3 million.

 We believe that our existing capital resources, together with interest
thereon, will be sufficient to meet our projected operating requirements through at least March 31, 2025 which include on-going clinical
studies for LPCN 1154 and/or LPCN 2101 or LPCN 2203 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 1148, LPCN 1144, and/or LPCN
1107. While we believe we have sufficient liquidity and capital resources to fund our projected operating requirements through at least
March 31, 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 March 31, 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 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 2203, 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 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:

 the scope, rate of progress, results and cost of our clinical studies,
preclinical testing and other related activities for all of our product candidates, including LPCN 1154, LPCN 2101 and LPCN 2203, LPCN
1148, LPCN 1144, LPCN 1107;

 the
 cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we
 may develop;

 the
 cost and timing of establishing sales, marketing and distribution capabilities, if any;

 the
 terms and timing of any collaborative, licensing, settlement and other arrangements that we may establish;

 the
 number and characteristics of product candidates that we pursue;

 the
 cost, timing and outcomes of regulatory approvals;

 the
 timing, receipt and amount of sales, profit sharing or royalties, if any, from our potential products;

 the
 cost of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

 the
 extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements
 relating to any of these types of transactions; and

 the
 extent to which we grow significantly in the number of employees or the scope of our operations.

 Funding
may not be available to us on favorable terms, or at all. Also, market conditions may prevent us from accessing the debt and equity capital
markets, including sales of our common stock through the Sales Agreement. If we are unable to obtain adequate financing when needed,
we may have to delay, reduce the scope of or suspend one or more of our clinical studies, research and development programs or, if any
of our product candidates receive approval from the FDA, commercialization efforts. We may seek to raise any necessary additional capital
through a combination of public or private equity offerings, including the Sales Agreement, debt financings, collaborations, strategic
alliances, licensing arrangements and other marketing and distribution arrangements. These arrangements may not be available to us or
available on terms favorable to us. To the extent that we raise additional capital through marketing and distribution arrangements, other
collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product
candidates, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will
be diluted, and the terms of these securities may include liquidation or other preferences, warrants or other terms that adversely affect
our stockholders' rights or further complicate raising additional capital in the future. If we raise additional capital through
debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional
debt, making capital expenditures or declaring dividends. If we are unable, for any reason, to raise needed capital, we will have to
reduce costs, delay research and development programs, liquidate assets, dispose of rights, commercialize products or product candidates
earlier than planned or on less favorable terms than desired or reduce or cease operations.

 Sources
and Uses of Cash

 The
following table provides a summary of our cash flows for the years ended December 31, 2023 and 2022:

 2023

 2022

 Cash used in operating activities

 $
 (11,865,991
)

 $
 (11,968,819
)

 Cash provided by investing activities

 13,084,686

 14,293,707

 Cash provided by (used in) financing activities

 404,567

 (2,126,944
)

 Net
Cash Used in Operating Activities

each of the years ended December 31, 2023 and 2022, net cash used in operating activities was $11.9 and $12.0 million, respectively.

 Net
cash used in operating activities during 2023 and 2022 was primarily attributable to cash outlays to support on-going operations, including
research and development expenses and general and administrative expenses. During 2023, we were performing activities mainly related
to our LPCN 1154 clinical studies and our LPCN 1148 Phase 2 POC Study in male subjects with cirrhosis. During 2022, we were performing
activities related to our Phase 2 POC study in male subjects with cirrhosis with LPCN 1148, our PK and food effect studies with LPCN
1154 and LPCN 1107, and the LPCN 1111 manufacturing scale up.

 Net
Cash Provided by Investing Activities

the year ended December 31, 2023, net cash provided by investing activities was $13.1 million and during the year ended December 31,
2022, net cash used in investing activities was $14.3 million.

 Net
cash provided by investing activities during 2023 and 2022 was primarily the result of the maturity of marketable investment securities,
net of $36.0 million and $59.5 million, respectively. There were $13,000 and $134,000 in capital expenditures for the years ended December
31, 2023 and 2022, respectively.

 Net
Cash Provided by (Used In) Financing Activities

the year ended December 31, 2023, net cash provided by financing activities was $405,000 and during the year ended December 31, 2022
net used in financing activities was $2.1 million.

 Net
cash provided by financing activities during the year ended December 31, 2023, was related to the sale of 81,000 shares of our common
stock under our ATM Offering, less associated costs. Net cash used in financing activities during the year ended December 31, 2022 was
mainly 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.

 Contractual
Commitments and Contingencies

 Long-Term
Debt Obligations and Interest on Debt

 On
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.

 Purchase
Obligations

 We
enter into contracts and issue purchase orders in the normal course of business with clinical research organizations for clinical trials
and clinical and commercial supply manufacturing and with vendors for preclinical research studies, research supplies and other services
and products for operating purposes. These contracts generally provide for termination on notice and are cancellable obligations.

 Operating
Leases

 In
August 2004, we entered into an agreement to lease our facility in Salt Lake City, Utah consisting of office and laboratory space which
serves as our corporate headquarters. On January 24, 2024, we modified and extended the lease through February 28, 2025.

 Critical
Accounting Policies and Significant Judgments and Estimates

 Our
management's discussion and analysis of our financial condition and results of operations is based on our financial statements
which we have prepared in accordance with U.S. generally accepted accounting principles ("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. We have identified the following accounting policies that we believe require application of management's
most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.

 While
our significant accounting policies are described in more detail in Note 2 of our annual financial statements included in this filing,
we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements.

Recognition

 In
May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09,
 Revenue from Contracts with Customers (Topic 606) with amendments in 2015 (ASU 2015-14) and 2016 (ASU 2016-8, ASU 2016-10, ASU
2016-12 and ASU 2016-20). The updated standard is a new comprehensive revenue recognition model that requires revenue to be recognized
in a manner that depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be
received in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty
of revenue and cash flows arising from contracts with customers. We adopted this pronouncement effective January 1, 2017. We recognized
net reversal of variable consideration revenue of $2.9 million during the year ended December 31, 2023, and license revenue of $500,000
during the year ended December 31, 2022. Net reversal of variable consideration revenue in 2023 was mainly attributable to the reversal
of variable consideration revenue recognized for minimum guaranteed royalties in 2021 under the license agreement with Antares, offset
by $110,000 in license revenue payments received from Spriaso under a licensing agreement in the cough and cold field. License revenue
in 2022 was related to a non-refundable cash fee of $500,000 received from Antares for consideration of a 90-day extension to exercise
its option to license LPCN 1111. On June 30, 2022, Antares' option to license TLANDO XR expired and was not exercised.

 We
may provide research and development services under collaboration arrangements to advance the development of jointly owned products.
We record the expenses incurred and reimbursed on a net basis in research and development expense.

 As
of December 31, 2023, we do not have any active collaboration agreements.

 Research and Development Expenses

 We
make estimates of our accrued expenses as of each balance sheet date in our financial statements based on the facts and circumstances
known to us at that time. Our expense accruals for contract research, contract manufacturing and other contract services are based on
estimates of the fees associated with services provided by the contracting organizations. Payments under some of the contracts we have
with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of clinical trial milestones.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in
each period. If possible, we obtain information regarding unbilled services directly from these service providers. However, we may be
required to estimate these services based on other information available to us. If we underestimate or overestimate the activity or fees
associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future
periods. Subsequent changes in estimates may result in a material change in our accruals.

 Stock-Based
Compensation

 We
recognize stock-based compensation expense for grants of stock option awards, restricted stock units and restricted stock under our Incentive
Plan to employees, nonemployees and nonemployee members of our board of directors based on the grant-date fair value of those awards.
The grant-date fair value of an award is generally recognized as compensation expense over the award's requisite service period.
In addition, in the past we have granted performance-based stock option awards and restricted stock grants, which vest based upon our
satisfying certain performance conditions. Potential compensation cost, measured on the grant date, related to these performance options
will be recognized only if, and when, we estimate that these options will vest, which is based on whether we consider the options'
performance conditions to be probable of attainment. Our estimates of the number of performance-based options that will vest will be
revised, if necessary, in subsequent periods.

 We
use the Black-Scholes model to compute the estimated fair value of stock option awards. Using this model, fair value is calculated based
on assumptions with respect to (i) expected volatility of our common stock price, (ii) the periods of time over which employees and members
of the board of directors are expected to hold their options prior to exercise (expected term), (iii) expected dividend yield on the
common stock, and (iv) risk-free interest rates. Stock-based compensation expense also includes an estimate, which is made at the time
of grant, of the number of awards that are expected to be forfeited. This estimate is revised, if necessary, in subsequent periods if
actual forfeitures differ from those estimates.

 As
of December 31, 2023, there was $455,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements
granted under the Company's stock option plan.

 Warrant
Liability

 In
connection with the November 2019 public offering, we issued warrants to purchase common stock. The warrants require us to pay such holders
an amount of cash in the event of a fundamental transaction, as defined in the warrant agreement. As the cash payment is at the option
of the warrant holder, we account for the common stock warrants as a liability, which is adjusted to fair value each reporting period
as well as upon exercise of such warrants. The Company estimates the fair value of the warrant liability based on a hypothetical payout
associated with a fundamental transaction. The fair value estimate utilizes a pricing model and unobservable inputs. Unlike the fair
value of other assets and liabilities which are readily observable and therefore more easily independently corroborated, the warrants
are not actively traded, and fair value is determined based on significant judgments regarding models, unobservable inputs and valuation
methodologies.

 As
of December 31, 2023 and 2022, the warrant liability was $17,000 and $230,000, respectively.

 Accounting
Standards Issued Not Adopted

 None.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Not
applicable.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

INC.

TO FINANCIAL STATEMENTS

 Page

 Audited
 Financial Statements of Lipocine Inc. for the Years ended December 31, 2023 and 2022

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 270)

 Consolidated Balance Sheets

 Consolidated Statements of Operations and Comprehensive Loss

 Consolidated Statements of Changes in Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 Report
of Independent Registered Public Accounting Firm

 To
the Board of Directors and Stockholders

Lipocine Inc.

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated balance sheets of Lipocine Inc. and subsidiaries (the Company) as of December 31, 2023 and
2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows
for the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as
of December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for years then ended, in conformity
with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matter

 The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts
or disclosures to which is relates.

Recognition

 The
Company entered into a license agreement during 2021 that includes a license fee, guaranteed minimum royalties, ongoing sales royalties,
milestone payments and transfer of materials. On October 2, 2023, the licensee provided notice that the contract would be terminated
effective January 31, 2024, resulting in a reversal of a portion of the variable consideration revenue that had been previously recognized.

 Management
is required to determine the transaction price and allocate the transaction price to the performance obligations in the license agreement.
Management is also required to make estimates of when achievement of a particular milestone becomes probable. Milestone payments are
included in the transaction price when it becomes probable that such inclusion would not result in a significant revenue reversal. A
reversal of variable consideration is recorded in the period that the change becomes known.

 We
identified revenue recognition as a critical audit matter because of the significant judgment by management in determining the transaction
price and allocating the transaction price to the performance obligations as well as the accounting treatment of the constrained revenue
resulting from the termination of the license agreement. This in turn led to a high degree of auditor judgment and effort in performing
procedures and evaluating audit evidence related to the judgments made by management.

 Our
audit procedures for auditing revenue included the following procedures, among others:

 We
 obtained and read the material license and royalty agreements.

 We
 tested management's determination of the transaction price and the allocation of the transaction price to the performance obligations.

 We
 evaluated the reasonableness of management's judgments and estimates.

 /s/ Tanner LLC

 We
have served as the Company's auditor since 2018

 Salt
Lake City, Utah

 March
7, 2024

 Consolidated
Balance Sheets

 2023

 2022

 Assets

 Current assets:

 Cash and cash equivalents

 $
 4,771,758

 $
 3,148,496

 Marketable investment securities

 17,263,788

 29,381,410

 Accrued interest income

 52,254

 80,427

 Contract asset - current portion

 -

 579,428

 Prepaid and other current assets

 773,424

 945,319

 Total current assets

 22,861,224

 34,135,080

 Contract asset - non-current portion

 -

 3,252,500

 Property and equipment, net of accumulated depreciation of $ 1,182,191 and $ 1,153,530 respectively

 116,095

 131,589

 Other assets

 23,753

 23,753

 Total assets

 $
 23,001,072

 $
 37,542,922

 Liabilities and Stockholders' Equity

 Current liabilities:

 Accounts payable

 $
 1,395,977

 $
 600,388

 Accrued expenses

 1,218,486

 1,077,738

 Warrant liability - current portion

 -

 Total current liabilities

 2,631,629

 1,678,126

 Warrant liability

 -

 Total liabilities

 2,631,629

 1,907,982

 Commitments and contingencies (notes 8, 9 and 11)

 -

 -

 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

 8,860

 8,852

 Additional paid-in capital

 220,171,250

 219,112,164

 Treasury stock at cost, 336 shares

)

)

 Accumulated other comprehensive gain (loss)

 7,259

 ( 20,321
)

 Accumulated deficit

 ( 199,777,214
)

 ( 183,425,043
)

 Total stockholders' equity

 20,369,443

 35,634,940

 Total liabilities and stockholders' equity

 $
 23,001,072

 $
 37,542,922

 See
accompanying notes to consolidated financial statements

 Consolidated
Statements of Operations and Comprehensive Loss

 2023

 2022

 2023

 2022

 Revenues:

 License revenue

 $
 109,987

 $

 Minimum guaranteed royalties revenue (reversal of variable consideration)

 ( 2,960,805
)

 -

 Total revenues (reversal of variable consideration), net

 ( 2,850,818
)

 Operating expenses:

 Research and development

 10,175,251

 8,556,888

 General and administrative

 4,904,888

 4,062,487

 Total operating expenses

 15,080,139

 12,619,375

 Operating loss

 ( 17,930,957
)

 ( 12,119,375
)

 Other income (expense):

 Interest and investment income

 1,366,940

 572,578

 Interest expense

 -

 ( 27,098
)

 Unrealized gain on warrant liability

 212,690

 565,940

 Gain on litigation settlement liability

 -

 250,000

 Total other income, net

 1,579,630

 1,361,420

 Loss before income tax expense

 ( 16,351,327
)

 ( 10,757,955
)

 Income tax expense

 ( 755
)

 ( 681
)

)

)

 Issuance of Series B preferred stock dividend

 ( 89
)

 -

 Net loss attributable to common shareholders Net loss attributable to common shareholders

 $
 ( 16,352,171
)

 $
)

 Basic loss per share attributable to common stock

 $
 ( 3.10
)

 $
 ( 2.06
)

 Weighted average common shares outstanding, basic

 5,231,681

 Diluted loss per share attributable to common stock

 $
 ( 3.14
)

 $
 ( 2.15
)

 Weighted average common shares outstanding, diluted

 5,256,169

 Comprehensive loss:

 $
)

 $
)

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

 27,580

 ( 2,305
)

 Comprehensive loss

 $
 ( 16,324,502
)

 $
 ( 10,760,941
)

 See
accompanying notes to consolidated financial statements

 Consolidated
Statements of Changes in Stockholders' Equity

 For
the Years Ended December 31, 2023 and 2022

 Paid-In
 Capital

 Comprehensive
 Loss

 Deficit

 Mezzanine

 Stockholder's

 Series
 B Preferred Stock

 Stock

 Treasury
 Stock

 Additional

 Other

 Total

 Paid-In
 Capital

 Comprehensive
 Loss

 Deficit

 Balances
 at December 31, 2021

 -

 $
 -

 -

 5,221,883

 $
 8,830

 $
)

 $
 218,286,323

 $
 ( 18,016
)

 $
 ( 172,666,407
)

 $
 45,570,018

 Mezzanine equity, balance, shares

 -

 Net
 loss

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

)

 -

 Unrealized net loss on marketable investment - securities

 -

 -

 -

 -

 -

 -

 -

 ( 2,305
)

 -

 ( 2,305
)

 -

 Stock-based
 compensation

 -

 -

 -

 -

 -

 -

 636,140

 -

 -

 636,140

 Mezzanine equity, Issuance of Series B preferred stock dividend, value

 Mezzanine equity, Issuance of Series B preferred stock dividend, share

 Mezzanine equity, Redemption of Series B preferred stock, value

 Mezzanine equity, Redemption of Series B preferred stock, share

 -

 Option
 exercises

 -

 -

 12,947

 -

 -

 211,401

 -

 -

 211,423

 -

 Costs
 associated with ATM Offering

 -

 -

 -

 -

 -

 -

 ( 21,700
)

 -

 -

 ( 21,700
)

 Balances
 at December 31, 2022

 -

 $
 -

 -

 5,234,830

 $
 8,852

 $
)

 $
 219,112,164

 $
 ( 20,321
)

 $
 ( 183,425,043
)

 $
 35,634,940

 Mezzanine equity, balance, shares

 -

 Paid-In
 Capital

 Comprehensive
 Loss

 Deficit

 Mezzanine

 Stockholder's

 Series
 B Preferred Stock

 Stock

 Treasury
 Stock

 Additional

 Other

 Total

 Paid-In
 Capital

 Comprehensive
 Loss

 Deficit

 Balances
 at December 31, 2022

 -

 $
 -

 -

 5,234,830

 $
 8,852

 $
)

 $
 219,112,164

 $
 ( 20,321
)

 $
 ( 183,425,043
)

 $
 35,634,940

 Balances, value

 -

 $
 -

 -

 5,234,830

 $
 8,852

 $
)

 $
 219,112,164

 $
 ( 20,321
)

 $
 ( 183,425,043
)

 $
 35,634,940

 Net
 loss

 -

 -

 -

 -

 -

 -

 -

 -

 -

)

)

 Unrealized net gain on marketable investment securities

 -

 -

 -

 -

 -

 -

 -

 27,580

 -

 27,580

 Stock-based
 compensation

 -

 -

 -

 -

 -

 -

 654,438

 -

 -

 654,438

 Issuance
 of Series B preferred stock dividend

 88,511

 -

 -

 -

 -

 -

 Redemption
 of Series B preferred stock

 ( 88,511
)

 ( 9

)

 -

 -

 -

 -

 -

 ( 89
)

 ( 80
)

 stock sold through ATM offering

 -

 -

 81,000

 -

 -

 404,559

 -

 -

 404,567

 Balances
 at December 31, 2023

 -

 $
 -

 -

 5,315,830

 $
 8,860

 $
)

 $
 220,171,250

 $
 7,259

 $
 ( 199,777,214
)

 $
 20,369,443

 Balances, value

 -

 $
 -

 -

 5,315,830

 $
 8,860

 $
)

 $
 220,171,250

 $
 7,259

 $
 ( 199,777,214
)

 $
 20,369,443

 See accompanying notes to consolidated financial statements

 Consolidated
Statements of Cash Flows

 2023

 2022

 2023

 2022

 Cash flows from operating activities:

 $
)

 $
)

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

 Depreciation expense

 28,661

 9,453

 Stock-based compensation expense

 654,438

 636,140

 Non-cash interest expense

 -

 5,842

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

 ( 212,690
)

 ( 565,940
)

 Gain on settlement of litigation liability

 -

 ( 250,000
)

 Amortization of discounts on marketable investment securities

 ( 952,651
)

 ( 122,048
)

 Write off of contract asset due to variable consideration revenue reversal

 2,960,805

 -

 Changes in operating assets and liabilities:

 Accrued interest income

 28,173

 166,826

 Contract asset

 709,933

 218,072

 Prepaid and other current assets

 333,085

 569,146

 Accounts payable

 795,589

 ( 688,954
)

 Accrued expenses

 140,748

 61,280

 Litigation settlement liability

 -

 ( 1,250,000
)

 Cash used in operating activities

 ( 11,865,991
)

 ( 11,968,819
)

 Cash flows from investing activities:

 Purchase of property and equipment

 ( 13,167
)

 ( 133,831
)

 Purchases of marketable investment securities

 ( 22,902,147
)

 ( 45,074,462
)

 Maturities of marketable investment securities

 36,000,000

 59,502,000

 Cash provided by investing activities

 13,084,686

 14,293,707

 Cash flows from financing activities:

 Debt repayments

 -

 ( 1,666,667
)

 End of loan payment

 -

 ( 650,000
)

 Net proceeds from sale of common stock through ATM

 404,567

 ( 21,700
)

 Proceeds from stock option exercises

 -

 211,423

 Cash provided by (used in) financing activities

 404,567

 ( 2,126,944
)

 Net increase in cash and cash equivalents

 1,623,262

 197,944

 Cash and cash equivalents at beginning of period

 3,148,496

 2,950,552

 Cash and cash equivalents at end of period

 $
 4,771,758

 $
 3,148,496

 Supplemental disclosure of cash flow information:

 Interest paid

 $
 -

 $
 21,256

 Income taxes paid

 $

 Supplemental disclosure of non-cash investing and financing activity:

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

 $
 27,580

 $
 ( 2,305
)

 Accrued final payment charge on debt

 $
 -

 $
 5,842

 Issuance of Series B preferred stock

 $

 $
 -

 See
accompanying notes to consolidated financial statements

 NOTES

 (1) Description of Business

 Lipocine
Inc. ("Lipocine" or the "Company"), a clinical-stage biopharmaceutical company focused on central nervous system
("CNS") disorders, is engaged in research and development for the delivery of drugs using its proprietary delivery technology.
The Company's principal operation is to provide oral delivery solutions for existing drugs. Lipocine develops its own drug candidates
or it develops drug candidates on behalf of or in collaboration with corporate partners. The Company has funded operating costs primarily
through collaborative license, milestone and research arrangements, through federal grants, through the sale of equity securities and
through debt. The Company is incorporated under the laws of the State of Delaware.

 (2) Summary of Significant Accounting Policies

 (a) Use of Estimates

 The
preparation of financial statements in conformity with U.S. generally accepted accounting principles ("US GAAP") requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include those related
to the timing and amount of revenue recognized from licensing agreements, stock-based compensation; income tax uncertainties; the fair
value of the warrant liability and the useful lives of property and equipment.

 (b) Cash and Cash Equivalents

 The
Company considers all highly liquid investments with original maturities to the Company of three months or less to be cash equivalents.
Although the Company may deposit its cash and cash equivalents with multiple financial institutions, its deposits, at times, may exceed
federally insured limits. Cash and cash equivalents were $ 4.8 million and $ 3.1 million at December 31, 2023 and 2022.

 (c) Receivables

 Accounts
receivable are recorded at the invoiced amount and do not bear interest.

 The
Company maintains an allowance for doubtful accounts for estimated losses. In establishing the allowance, management considers historical
losses adjusted to take into account current market conditions and their customers' financial condition, the amount of receivables
in dispute, and the current receivables aging and current payment patterns. The Company had no write-offs in 2023 and 2022 and the Company
did not record an allowance for doubtful accounts as of December 31, 2023 and 2022 as there were no accounts receivable outstanding.
The Company does not have any off-balance-sheet credit exposure related to its customers.

 (d) Revenue Recognition

 The
Company generates most of its revenue from license and royalty arrangements. At the inception of each contract, the Company identifies
the goods and services that have been promised to the customer and each of those that represent a distinct performance obligation, determines
the transaction price including any variable consideration, allocates the transaction price to the distinct performance obligations and
determines whether control transfers to the customer at a point in time or over time. Variable consideration is included in the transaction
price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or
when the uncertainty associated with the variable consideration is subsequently resolved. The Company reassesses its reserves for variable
consideration at each reporting date and makes adjustments, if necessary, which may affect revenue and earnings in periods in which any
such changes become known.

 NOTES

 Disaggregation
of Revenue. In the following tables, revenues reported for the years ended December 31, 2023 and 2022, under Topic 606, are disaggregated
by type of revenue.

 Schedule of Disaggregation
of Revenue

 Type of Revenue

 2023

 2022

 License

 $
 109,987

 $

 Minimum guaranteed royalties revenue (reversal of variable consideration)

 ( 2,960,805
)

 -

 $
 ( 2,850,818
)

 $

 Under
Topic 606, all revenue has been recognized as point in time for the years ended December 31, 2023 and 2022.

 See
Note 4 for a description of the license agreement with Antares Pharma, Inc. (the "Antares License Agreement"). See Note 12
for a description of the agreement with Spriaso.

 License
Fees. For distinct license performance obligations, upfront license fees are recognized when the Company satisfies the underlying
performance obligation. This generally occurs upon transfer of the right to use the Company's licensed technology 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 for which the licensee and/or Company must 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.
 Royalties revenue consists of sales-based and minimum royalties earned under licenses agreements for our products. 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. 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. The Company estimates sales-based
royalties revenue earned but unpaid at each reporting period using information provided by the licensee. The Company's license
arrangements may also provide for minimum royalties, which the Company recognizes upon the satisfaction of the underlying performance
obligation, which generally occurs with delivery of the underlying technology rights to the licensee. Sales-based and minimum royalties
are generally due within 45 days after the end of each quarter in which they are earned.

 Contract
Assets

 Contract
assets consist of minimum royalty revenue earned in relation to the license agreement but not yet payable based on the terms of the contract.
On October 2, 2023, the Company received notice from Antares of Antares' termination of the Antares License Agreement which stated
that the Antares License Agreement will terminate effective January 31, 2024. The Company received approximately $ 902,000 from Antares
during the year ended December 31, 2023 under the terms of our license agreement, of which approximately $ 710,000 was applied to the
contract asset and $ 192,000 was applied to imputed interest receivable. Based on the termination notice, the Company recorded a non-cash
revenue reversal of variable consideration relating to the minimum guaranteed royalties recorded as part of the Antares License Agreement
of approximately $ 3.0 million for the balance of the contract asset that is not expected to be received. The contract asset as of December
31, 2023 and 2022, was zero and $ 3,832,000, respectively and is related to the Antares License Agreement.

Concentration

 A
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 $ 3.0 million
and revenue of $ 500,000 for the years ended December 31, 2023, and 2022, respectively. The reversal of revenue in 2023 is due to the
write off of the contract asset resulting in a reversal of variable consideration recognized in 2021 for minimum guaranteed royalties
which resulted from termination of the Antares License Agreement. License revenue recognized in 2022 was 100 % from one major customer,
Antares.

 NOTES

 (e) Property and Equipment

 Property
and equipment are recorded at cost, less accumulated depreciation. Maintenance and repairs that do not extend the life or improve the
asset are expensed in the year incurred.

 Depreciation
is computed using the straight-line method over the estimated useful lives of the assets, which are five years for laboratory and office
equipment, three years for computer equipment and software, and seven years for furniture and fixtures.

 (f) Accounting for Impairment of Long-Lived Assets

 Long-lived
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to future net cash
flows (undiscounted) expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized
is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets held for sale are reported
at the lower of the carrying amount, or fair value, less costs to sell.

 (g) Income Taxes

taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation
allowance is provided against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or
all of the net deferred tax assets will not be realized.

 The
Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized
income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition
or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related
to unrecognized tax benefits as a component of its income tax expense.

 (h) Share Based Payments

 The
Company recognizes stock-based compensation expense for grants of stock option awards, restricted stock units and restricted stock under
the Company's Incentive Plan to employees, nonemployees and nonemployee members of the Company's board of directors based
on the grant-date fair value of those awards. The grant-date fair value of an award is generally recognized as compensation expense over
the award's requisite service period. In addition, in the past the Company has granted performance-based stock option awards and
restricted stock units, which vest based upon the Company satisfying certain performance conditions. Potential compensation cost, measured
on the grant date, related to these performance options will be recognized only if, and when, the Company estimates that these options
or units will vest, which is based on whether the Company considers the performance conditions to be probable of attainment. The Company's
estimates of the number of performance-based options or units that will vest will be revised, if necessary, in subsequent periods.

 NOTES

 The
Company uses the Black-Scholes model to compute the estimated fair value of stock option awards. Using this model, fair value is calculated
based on assumptions with respect to (i) expected volatility of the Company's common stock price, (ii) the periods of time over
which employees, nonemployees and members of the board of directors are expected to hold their options prior to exercise (expected term),
(iii) expected dividend yield on the common stock, and (iv) risk-free interest rates. Stock-based compensation expense also includes
an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. This estimate is revised,
if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation cost that has been expensed
in the statements of operations amounted to $ 654,000
 and $ 636,000
 for the years ended December 31, 2023 and 2022,
allocated as follows:

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

 2023

 2022

 Research and development

 $
 358,352

 $
 338,018

 General and administrative

 296,086

 298,122

 $
 654,438

 $
 636,140

 The
Company issued 26,467 stock options and 74,334 stock options during the years ended December 31, 2023 and 2022, respectively.

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

 Expected
Term: The expected term represents the period that the stock-based awards are expected to be outstanding. Due to limited historical
experience of similar awards, 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.

 Risk-Free
Interest Rate: The risk-free interest rate used was based on the implied yield currently available on U.S. Treasury issues with an
equivalent remaining term.

 Expected
Dividend: The expected dividend assumption is based on management's current expectation about the Company's anticipated
dividend policy. The Company does not anticipate declaring dividends in the foreseeable future.

 Expected
Volatility: The volatility factor is based solely on the Company's trading history.

 NOTES

 For
options granted in 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:

 Schedule of Key Assumption of Fair Value of Stock Options Granted

 2023

 2022

 Expected term

 5.73 years

 5.82 years

 Risk-free interest rate

 3.73
 %

 3.06
 %

 Expected dividend yield

 —

 —

 Expected volatility

 98.97
 %

 99.31
 %

 FASB
Accounting Standards Codification ("ASC") 718, Stock Compensation, requires the Company to recognize 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.

 As
of December 31, 2023, there was $ 455,000 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 1.4 years
and will be adjusted for subsequent changes in estimated forfeitures. The weighted average fair value of share-based compensation awards
granted during the years ended December 31, 2023 and 2022 was approximately $ 6.19 per share and $ 11.50 per share, respectively.

 (i) Fair Value

 The
Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability
in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

 Level
 1 Inputs: Quoted prices for identical instruments in active markets.

 Level
 2 Inputs: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets
 that are not active, and model-derived valuation in which all significant inputs and significant value drivers are observable in
 active markets.

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

 NOTES

 All
of the Company's financial instruments are valued using quoted prices in active markets or based on other observable inputs. For
accrued interest income, prepaid and other current assets, accounts payable, and accrued expenses, the carrying amounts approximate fair
value because of the short maturity of these instruments. 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 at December 31, 2023 and 2022:

of Fair Value, Assets and Liabilities Measured on Recurring Basis

 Fair value measurements at reporting date using

 December 31, 2023

 Level 1 inputs

 Level 2 inputs

 Level 3 inputs

 Assets:

 Cash equivalents - money market funds

 $
 4,695,491

 $
 4,695,491

 $
 -

 $
 -

 Government treasury bills

 14,281,104

 14,281,104

 -

 -

 US. Government agency securities

 -

 -

 $
 21,959,279

 $
 18,976,595

 $

 $
 -

 Liabilities:

 Warrant liability

 $

 $
 -

 $
 -

 $

 $
 21,976,445

 $
 18,976,595

 $

 $

 Fair value measurements at reporting date using

 Deember 31, 2022

 Level 1 inputs

 Level 2 inputs

 Level 3 inputs

 Assets:

 Cash equivalents - money market funds

 $
 2,694,434

 $
 2,694,434

 $
 -

 $
 -

 Government treasury bills

 5,959,000

 5,959,000

 -

 -

 Commercial paper

 14,586,930

 -

 14,586,930

 -

 Corporate bonds and notes

 5,454,690

 -

 5,454,690

 -

 U.S. government agency securities

 3,380,790

 -

 3,380,790

 -

 $
 32,075,844

 $
 8,653,434

 $
 23,422,410

 $
 -

 Liabilities:

 Warrant liability

 $

 $
 -

 $
 -

 $

 $
 32,305,700

 $
 8,653,434

 $
 23,422,410

 $

 NOTES

 The
following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value
in the balance sheets:

 Cash
equivalents: Cash equivalents primarily consist of highly rated money market funds and treasury bills with original maturities to the
Company of three months or less and are purchased daily at par value with specified yield rates. Cash equivalents related to money market
funds and treasury bills are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices
or broker or dealer quotations for similar assets.

 Government
bonds and notes: The Company uses a third-party pricing service to value these investments. United States bonds and notes are classified
within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical assets and reportable trades.

 Corporate
bonds, notes, and commercial paper: The Company uses a third-party pricing service to value these investments. Corporate bonds, notes
and commercial paper 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.

 Warrant
liability: The warrant liability (which relates to warrants to purchase shares of common stock) is marked-to-market each reporting period
with the change in fair value recorded to other income (expense) in the accompanying statements of operations until the warrants are
exercised, expire or other facts and circumstances lead the warrant liability to be reclassified to stockholders' equity. The fair
value of the warrant liability is estimated using a Black-Scholes option-pricing model. The significant assumptions used in preparing
the option pricing model for valuing the warrant liability as of December 31, 2023, include (i) volatility of 100 %, (ii) risk free interest
rate of 4.79 %, (iii) strike price of $ 8.50, (iv) fair value of common stock of $ 2.79, and (v) expected life of 0.9 years. The significant
assumptions used in preparing the option pricing model for valuing the warrant liability as of December 31, 2022, include (i) volatility
of 100 %, (ii) risk free interest rate of 4.41 %, (iii) strike price of $ 8.50, (iv) fair value of common stock of $ 6.77, and (v) expected
life of 1.9 years.

 The
Company's accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change
in circumstances that caused the transfer. There were no transfers into or out of Level 1, Level 2 or Level 3 for the years ended December
31, 2023 and December 31, 2022.

 (j) Earnings (Loss) per Share

 Basic
earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted average number
of common shares outstanding during the period.

 Diluted
earnings (loss) per share is based on the weighted average number of common shares outstanding plus, where applicable, the additional
potential common shares that would have been outstanding related to dilutive options, warrants, and unvested restricted stock units to
the extent such shares are dilutive.

 NOTES

 The
following table sets forth the computation of basic and diluted earnings (loss) per share of common stock for the years ended December
31, 2023 and 2022.

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

 2023

 2022

 2023

 2022

 Basic loss per share attributable to common stock:

 Numerator

 $
 ( 16,352,171
)

 $
)

 Denominator

 Weighted avg. common shares outstanding

 5,231,681

 Basic loss per share attributable to common stock

 $
 ( 3.10
)

 $
 ( 2.06
)

 Diluted loss per share attributable to common stock:

 Numerator

 $
 ( 16,352,171
)

 $
)

 Effect of dilutive securities on net loss:

 Common stock warrants

 212,690

 565,940

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

 $
 ( 16,564,861
)

 $
 ( 11,324,576
)

 Denominator

 Weighted avg. common shares outstanding

 5,231,681

 Weighted average effect of dilutive securities:

 Common stock warrants

 -

 24,488

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

 5,256,169

 Diluted loss per share attributable to common stock

 $
 ( 3.14
)

 $
 ( 2.15
)

 The
computation of diluted earnings per share for the years ended December 31, 2023 and 2022 does not include the following stock options
or warrants to purchase shares in the computation of diluted earnings per share because these instruments were antidilutive:

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

 2023

 2022

 Stock options

 262,247

 277,225

 Warrants

 49,433

 49,433

 NOTES

 (k) Segment Information

 The
Company is a single reportable segment engaged in research and development for the delivery of drugs using its proprietary delivery technology.
Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation
by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The chief operating
decision maker made such decisions and assessed performance at the company level, as one segment.

 (l) Principles of Consolidation

 The
consolidated financial statements include the accounts of the Company and all subsidiaries. The Company eliminates all intercompany accounts
and transactions in consolidation.

 (3) Marketable Investment Securities

 The
Company has classified its marketable investment securities as available-for-sale securities, all of which are debt securities. These
securities are carried at fair value with unrealized holding gains and losses, net of the related tax effect, included in accumulated
other comprehensive income (loss) in stockholders' equity until realized. Gains and losses on investment security transactions
are reported on the specific-identification method. Dividend income is recognized on the ex-dividend date and interest income is recognized
on an accrual basis. 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 at December 31, 2023 and 2022 were as follows:

of Available for Sale Securities

 December 31, 2023

 Amortized

 Cost

 Gross

 unrealized

 holding gains

 Gross

 unrealized

 holding losses

 fair value

 Government treasury bills

 $
 14,272,530

 $
 8,574

 $
 -

 $
 14,281,104

 U.S. government agency securities

 2,983,999

 -

 ( 1,315
)

 $
 17,256,529

 $
 8,574

 $
 ( 1,315
)

 $
 17,263,788

 December 31, 2022

 Amortized

 Cost

 Gross

 unrealized

 holding gains

 Gross

 unrealized

 holding losses

 fair value

 Government treasury bills

 $
 5,973,087

 $
 -

 $
 ( 14,087
)

 $
 5,959,000

 Commercial paper

 20,052,505

 -

 ( 10,885
)

 20,041,620

 U.S. government agency securities

 3,376,139

 4,651

 -

 3,380,790

 $
 29,401,731

 $
 4,651

 $
 ( 24,972
)

 $
 29,381,410

 NOTES

 (3)

 Marketable
 Investment Securities - (continued)

 Maturities
of debt securities classified as available-for-sale securities at December 31, 2023 are as follows:

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

 December 31, 2023

 Amortized Cost

 fair value

 Due within one year

 $
 17,256,529

 $
 17,263,788

 $
 17,256,529

 $
 17,263,788

 There
were no sales of marketable investment securities during the years ended December 31, 2023 and 2022 and therefore no realized gains or
losses. Additionally, $ 36.0 million and $ 59.5 million of marketable investment securities matured during the years ended December 31,
2023 and 2022, respectively. The Company determined there were no other-than-temporary impairments for the years ended December 31, 2023
and 2022.

 (4) Contractual Agreements

 (a)

 Abbott
 Products, Inc.

 On
March 29, 2012, the Company terminated its collaborative agreement with Solvay Pharmaceuticals, Inc. (later acquired by Abbott Products,
Inc.) for TLANDO. As part of the termination, the Company reacquired the rights to the intellectual property from Abbott. All obligations
under the prior license agreement have been completed except that Lipocine will owe Abbott a perpetual 1 % royalty on net sales. Such
royalties are limited to $ 1.0 million in the first two calendar years following product launch, after which period there is not a cap
on royalties and no maximum aggregate amount. If generic versions of any such product are introduced, then royalties are reduced by 50 %.
The Company incurred royalty expense of $ 34,000 and $ 12,000 in the years ended December 31, 2023 and 2022, respectively.

 (b)

 Antares
 Pharma, Inc.

 On
October 14, 2021, the Company entered into a license agreement ("License Agreement") with Antares Pharma, Inc. ("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 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 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. TLANDO received FDA approval on March 29, 2022.

 Upon
execution of the Antares License Agreement, Antares paid to the Company an initial payment of $ 11.0 million. 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 all products licensed by Antares under the Antares License Agreement.
In addition, upon commercialization, the Company was to 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. On January 12, 2024, the Company entered into a license agreement (the
"Verity License Agreement") with Verity

 NOTES

 (4)

 Contractual
 Agreements – (continued)

 Pharmaceuticals
Inc. (Verity). See Note 4(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 will terminate and all rights in TLANDO will
be transferred to the Company's new licensing partner, Verity.

 Under
the Antares License Agreement, the 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. The 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. The Company recognized a reversal of variable consideration revenue
under the Antares License Agreement of $ 3.0 million during the year ended December 31, 2023 and license revenue $ 500,000 during the years
ended December 31, 2022.

 (c)

 Verity
 Pharmaceuticals, Inc.

 On
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 outside of the United States and Canada, and with respect to applications outside of the Field inside or outside the United States
and Canada.

 Upon
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 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 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.

 Pursuant
to the terms of the License Agreement, GSL 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.

 (d)

 Contract
 Research and Development

 The
Company has entered into agreements with various contract organizations that conduct preclinical, clinical, analytical and manufacturing
development work on behalf of the Company as well as a number of independent contractors, primarily clinical researchers, who serve as
advisors to the Company. The Company incurred expenses of $ 6.7 million and $ 5.6 million under these agreements in 2023 and 2022 and has
recorded these expenses in research and development expenses.

 NOTES

 (5) Loan and Security Agreement

 Silicon
Valley Bank Loan

 On
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
on June 1, 2022. The Company made a final payment at maturity equal to $ 650,000 (the "Final Payment Charge") at the time
the loan matured. The expense of the final payment charge had been recognized over the term of the facility using the effective interest
method.

 (6) Property and Equipment

 Property
and equipment consisted of the following:

 Schedule of Property and Equipment

 2023

 2022

 2023

 2022

 Computer equipment and software

 $
 66,830

 $
 53,663

 Lab and office equipment

 1,180,052

 1,180,052

 Furniture and fixtures

 51,404

 51,404

 Property and equipment, gross

 1,298,286

 1,285,119

 Less accumulated depreciation

 ( 1,182,191
)

 ( 1,153,530
)

 Property
 and equipment, net

 $
 116,095

 $
 131,589

 Depreciation
expense for the years ended December 31, 2023 and 2022 was approximately $ 29,000 and $ 9,500, respectively.

 NOTES

 (7) Income Taxes

 (a)

 Tax Expense

tax expense consists of:

 Schedule of Income Tax Expense

 2023

 2022

 2023

 2022

 U.S. federal

 $
 -

 $
 -

 State and local

 Deferred

 -

 -

 Total

 $

 $

 (b)

 Tax
 Rate Reconciliation

tax expense was $ 755 and $ 681, respectively, for the years ended December 31, 2023 and 2022 and differed from the amounts computed by
applying the U.S. federal income tax rate of 21 % for 2023 and 2022, respectively, to pretax income from continuing operations as a result
of the following:

 Schedule of Pretax Income from Continuing Operations

 2023

 2022

 2023

 2022

 Computed "expected" tax expense (benefit)

 $
 ( 3,433,893
)

 $
 ( 2,259,272
)

 Increase (reduction) in income taxes resulting from:

 Change in valuation allowance

 3,619,564

 2,529,547

 State and local income taxes, net of federal income tax benefit

 Stock expense

 319,214

 314,186

 Research and development tax credits

 ( 434,858
)

 ( 422,495
)

 Orphan drug tax credit

 ( 26,245
)

 ( 42,976
)

 Warrant Liability

 ( 44,665
)

 ( 118,847
)

 Other, net

 1,042

 -

 Total

 $

 $

 NOTES

 (7)

 Taxes – (continued)

 (c)

 Significant
 Components of Deferred Taxes

 The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at
December 31, 2023 and 2022 are presented below:

 Schedule of Deferred Tax Assets and Liabilities

 2023

 2022

 2023

 2022

 Deferred tax assets:

 Stock-based compensation

 $
 1,188,535

 $
 1,428,167

 Net operating loss carryforwards

 35,108,766

 35,595,940

 Employee benefits

 45,592

 44,602

 Research and development tax credits

 6,032,559

 5,491,805

 Orphan drug tax credits

 1,274,204

 1,240,982

 Plant and equipment

 -

 -

 Sec. 174 Expenses

 3,945,862

 1,997,787

 Other deductible temporary differences

 167,371

 69,273

 Total gross deferred tax assets

 47,762,889

 45,868,556

 Net deferred tax assets

 $
 47,762,889

 $
 45,868,556

 Deferred tax liabilities:

 Plant and equipment

 ( 7,227
)

 ( 9,052
)

 Total gross deferred tax liabilities

 ( 7,227
)

 ( 9,052
)

 Net deferred tax liabilities

 $
 ( 7,227
)

 $
 ( 9,052
)

 Deferred tax asset/deferred tax liability

 47,755,662

 45,859,504

 Valuation allowance

 ( 47,755,662
)

 ( 45,859,504
)

 Net deferred tax asset

 $
 -

 $
 -

 The
valuation allowance for deferred tax assets as of December 31, 2023 and 2022 was $ 47.8 million and $ 45.9 million, respectively. The net
change in the valuation allowance was an increase of $ 1.9 million in 2023 and an increase of $ 2.9 million in 2022. A valuation allowance
has been provided for the full amount of the Company's net deferred tax assets as the Company believes it is more likely than not
that these benefits will not be realized. In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled
reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable
income, and tax planning strategies in making this assessment.

 NOTES

 (7)

 Taxes – (continued)

the year ended December 31, 2013, the Company experienced a change in ownership, as defined by the Internal Revenue Code, as amended
(the "Code") under Section 382. A change of ownership occurs when ownership of a company increases by more than 50 percentage
points over a three-year testing period of certain stockholders. As a result of this ownership change, we determined that our annual
limitation on the utilization of our federal net operating loss ("NOL") and credit carryforwards is approximately $ 1.1 million
per year. We will only be able to utilize $ 9.8 million of our pre-ownership change NOL carryforwards and will forgo utilizing $ 3.3 million
of our pre-ownership change NOL carryforwards and $ 1.2 million of our pre-change credit carryforwards as a result of this ownership change.
We do not account for forgone NOL and credit carryovers in our deferred tax assets and only account for the NOL and credit carryforwards
that will not expire unutilized as a result of the restrictions of Code Section 382.

 As
of December 31, 2023, we had NOL and research and development credit carryforwards for U.S. federal income tax reporting purposes of
approximately $ 138.6 million and $ 4.4 million, respectively. Approximately $33.7 million of the NOL will expire between 2024 and 2034
and $52.4 million of the NOL will expire 2035 through 2037. Pursuant to the Tax Cuts and Jobs Act of 2017, NOL's generated in 2018
and subsequent years have an unlimited carryforward therefore the 2023, 2022, 2020, 2019 and 2018 NOL of $52.5 million can be carried
forward indefinitely. The research and development credits will begin to expire in 2033 through 2043. We have orphan drug credit carry
forwards of approximately $ 1.3 million which will expire if unused through 2043.

 We
also have state NOL and research and development credit carry forwards of approximately
$ 128.9
million and $ 1.7
million, respectively. The Company's state NOL of $31.2 million will expire between 2024 and 2029, and $97.7
million will expire in 2030 through 2037. The state research and development credits expire
in 2024 through 2038.

 The
Company's federal and state income tax returns for December 31, 2020 through 2023 are open tax years.

 A
reconciliation of the beginning and ending amount of total unrecognized tax contingencies, excluding interest and penalties, for the
years ended December 31, 2023 and 2022 are as follows:

 Schedule of Reconciliation of the Beginning and Ending Amount of Total Unrecognized Tax Contingencies, Excluding Interest and Penalties

 2023

 2022

 Balance, beginning of year

 $
 -

 $
 -

 Balance, end of year

 $
 -

 $
 -

 NOTES

 (8) Leases

 The
Company has a non-cancelable operating lease for office space and laboratory facilities in Salt Lake City, Utah. On January 24, 2024,
the term of the lease has been extended through February 28, 2025.

 Future
minimum lease payments under the non-cancelable operating lease as of December 31, 2023 are:

 Schedule of Future Minimum Rental Payments for Operating Leases

 Operating

 leases

 Year ending December 31:

 2024

 $
 366,290

 2025

 61,346

 Total minimum lease payments

 $
 427,636

 The
Company's rent expense was $ 355,000 and $ 341,000 for the years ended December 31, 2023 and 2022, respectively.

 (9) Stockholders' Equity

 On
May 1, 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 ration to be set within that range at the discretion of the Board without further approval or authorization
from stockholders.

 On
May 10, 2023, the Company's Board approved a reverse stock split of 1-for-17. The Company filed the Amendment to its Certificate
of Incorporation with the Secretary of the State of Delaware on May 10, 2023, and the Amendment became effective at 5:00 pm Eastern Time
on May 11, 2023. The Company's shares began trading on a split-adjusted basis on the Nasdaq Capital Market commencing upon market
open on May 12, 2023.

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

 On
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.

 (a)

 Issuance
 of Common Stock

 On
March 6, 2017, the Company entered into a sales agreement ("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. 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 shares. The Company pays Cantor 3.0 % of the aggregate gross proceeds from each sale of shares under the Sales Agreement.
In addition, the Company has also provided Cantor with customary indemnification rights.

 The
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.

 NOTES

 (9)

 Equity – (continued)

 As
of December 31, 2023, we 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 year ended December 31, 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 $ 405,000 under the Sales Agreement which is net of approximately $ 24,000 in expenses. During the year ended
December 31, 2022, the Company did not sell any shares of its common stock pursuant to the ATM Offering. As of December 31, 2023, the
Company had $ 40.8 million available for sale under the Sales Agreement. However, as of November 22, 2023, the Company is now subject
to General Instruction I.B.6 of Form S-3 which limits the amounts that we may sell under the registration statement. As a result of such
limitations, the Company has currently registered the offer and sale of shares of the Company's common stock pursuant to the Sales
Agreement having an aggregate offering price of up to $ 5.3 million.

 (b)

 Series
 B Preferred Stock

 On
March 7, 2023, the Board of the Company declared a dividend of one one-thousandth (1/1,000 th) of a share of Series B Preferred
Stock, par value $ 0.0001 per share ("Series B Preferred Stock"), for each outstanding share of common stock of the Company,
to stockholders of record on March 24, 2023. The Certificate of Designation of Series B Preferred Stock (the "Certificate of Designation")
was filed with the Delaware Secretary of State and became effective on March 10, 2023.

 The
dividend was based on the number of shares of outstanding common stock on March 24, 2023, and resulted in 88,511 Series B Preferred shares
being issued. Each whole share of Series B Preferred Stock entitled the holder thereof to 1,000,000 votes per share, and each fraction
of a share of Series B Preferred Stock had a ratable number of votes. Thus, each one-thousandth of a share of Series B Preferred Stock
was entitled to 1,000 votes. The outstanding shares of Series B Preferred Stock were entitled to vote together with the outstanding shares
of common stock as a single class exclusively with respect to any proposal to adopt an amendment to the Company's Amended and Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"), to effect a reverse stock split of the outstanding
shares of Common Stock at a ratio determined in accordance with the terms of such amendment (the "Reverse Stock Split"),
and (ii) any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse Stock Split (the "Adjournment
Proposal") in conjunction with the Company's 2023 annual meeting of stockholders.

 All
shares of Series B Preferred Stock that were not present in person or by proxy at the 2023 annual meeting as of immediately prior to
the opening of the polls (the "Initial Redemption Time") were automatically redeemed by the Company without further action
on the part of the Company or the holder of shares of Series B Preferred Stock (the "Initial Redemption"). The remaining
shares of Series B Preferred Stock that were not redeemed pursuant to the Initial Redemption were redeemed automatically upon the effectiveness
of the amendment to the Certificate of Incorporation implementing the Reverse Stock Split (the "Subsequent Redemption").

 Each
"beneficial owner" (as such terms are defined in the Certificate of Designation with respect to the Series B Preferred Stock)
of shares of Series B Preferred Stock redeemed in the redemptions described above has the right to receive an amount equal to $0.01 in
cash for each ten whole shares of Series B Preferred Stock that were "beneficially owned" by the beneficial owner as of immediately
prior to the applicable redemption time and redeemed pursuant to such redemption, payable upon receipt by the Company of a written request
submitted by the applicable beneficial owner to the corporate secretary of the Company following the applicable redemption time.

 The
Series B Preferred Stock was not convertible into, or exchangeable for, shares of any other class or series of stock or other securities
of the Company. The Series B Preferred Stock had no stated maturity and was not subject to any sinking fund. The Series B Preferred Stock
was not subject to any restriction on the redemption or repurchase of shares by the Company while there is any arrearage in the payment
of dividends or sinking fund installments.

 NOTES

 (9)

 Equity – (continued)

 The
Company was not solely in control of the redemption of the shares of Series B Preferred Stock prior to the annual meeting of stockholders
since the holders had the option of deciding whether to vote in respect of the above-described Reverse Stock Split, which determined
whether a given holder's shares of Series B Preferred Stock was redeemed in the Initial Redemption or the Subsequent Redemption.
Since the redemption of the Series B Preferred Stock was not solely in the control of the Company, the shares of Series B Preferred Stock
were classified within the mezzanine equity in the Company's unaudited consolidated statement of stockholder's equity. Upon
issuance, the shares of Series B Preferred Stock were measured at redemption value. As of June 30, 2023, all shares of Series B Preferred
Stock had been redeemed by the Company.

 The
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.

 (c)

 Rights
 Agreement

 On
November 13, 2015, the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent, entered into a Rights Agreement.
Also on November 12, 2015, the board of directors of the Company authorized and the Company declared a dividend of one preferred stock
purchase right (each a "Right" and collectively, the "Rights") for each outstanding share of common stock of
the Company. The dividend was payable to stockholders of record as of the close of business on November 30, 2015 and entitles the registered
holder to purchase from the Company one one-thousandth of a fully paid non-assessable share of Series A Junior Participating Preferred
Stock of the Company at a price of $ 63.96 per one-thousandth share (the "Purchase Price"). The Rights will generally become
exercisable upon the earlier to occur of (i) 10 business days following a public announcement that a person or group of affiliated or
associated persons has become an Acquiring Person (as defined below) or (ii) 10 business days (or such later date as may be determined
by action of the board of directors prior to such time as any person or group of affiliated or associated persons becomes an

 Acquiring
Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 15% or more of the outstanding common stock of the Company. Except
in certain situations, a person or group of affiliated or associated persons becomes an "Acquiring Person" upon acquiring
beneficial ownership of 15% or more of the outstanding shares of common stock of the Company.

 In
general, in the event a person becomes an Acquiring Person, then each Right not owned by such Acquiring Person will entitle its holder
to purchase from the Company, at the Right's then current exercise price, in lieu of shares of Series A Junior Participating Preferred
Stock, common stock of the Company with a market value of twice the Purchase Price. In addition, if after any person has become an Acquiring
Person, (a) the Company is acquired in a merger or other business combination, or (b) 50% or more of the Company's assets, or assets
accounting for 50% or more of its earning power, are sold, leased, exchanged or otherwise transferred (in one or more transactions),
proper provision shall be made so that each holder of a Right (other than the Acquiring Person, its affiliates and associates and certain
transferees thereof, whose Rights became void) shall thereafter have the right to purchase from the acquiring corporation, for the Purchase
Price, that number of shares of common stock of the acquiring corporation which at the time of such transaction would have a market value
of twice the Purchase Price.

 The
Company will be entitled to redeem the Rights at $ 0.001 per Right at any time prior to the time an Acquiring Person becomes such. The
terms of the Rights are set forth in the Rights Agreement, which is summarized in the Company's Current Report on Form 8-K dated
November 13, 2015. The rights plan was originally set to expire on November 12, 2018; however, on November 5, 2018 our Board of Directors
approved an Amended and Restated Rights Agreement pursuant to which the expiration date was extended to November 5, 2021 and again on
November 1, 2021, the Company adopted a Second Amended and Restated Rights Agreement pursuant to which the expiration date was extended
to November 1, 2024, unless the rights are earlier redeemed or exchanged by the Company.

 NOTES

 (9)

 Equity – (continued)

 (d)

 Stock
 Option Plan

 In
April 2014, the board of directors adopted the 2014 Stock and Incentive Plan ("2014 Plan") subject to shareholder approval
which was received in June 2014. The 2014 Plan provides for the granting of nonqualified and incentive stock options, stock appreciation
rights, restricted stock units, restricted stock and dividend equivalents. An aggregate of 58,823 shares were authorized for issuance
under the 2014 Plan. Additionally, 15,994 remaining authorized shares under the 2011 Equity Incentive Plan ("2011 Plan")
were issuable under the 2014 Plan at the time of the 2014 Plan adoption. Upon receiving shareholder approval in June 2016, the 2014 Plan
was amended and restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted
under the 2014 Plan from 74,817 to 145,405. Additionally, upon receiving shareholder approval in June 2018, the 2014 Plan was further
amended and restated to increase the authorized number of shares of common stock of the Company issuable under all awards granted under
the 2014 Plan from 145,405 to 189,522. 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 of directors, on an option-by-option basis, determines the number of shares, exercise price,
term, and vesting period for options granted. Options granted generally have a ten -year contractual life. The Company issues shares of
common stock upon the exercise of options with the source of those shares of common stock being either newly issued shares or shares
held in treasury. An aggregate of 336,582 shares are authorized for issuance under the 2014 Plan, with 48,422 shares remaining available
for grant as of December 31, 2023.

 A
summary of stock option activity is as follows:

of Stock Option Activity

 Outstanding stock options

 Number of

 shares

 Weighted average exercise

 price

 Balance at December 31, 2022

 277,225

 $
 38.44

 Options granted

 26,467

 6.19

 Options exercised

 -

 -

 Options forfeited

 ( 7,352
)

 6.91

 Options cancelled

 ( 34,093
)

 52.72

 Balance at December 31, 2023

 262,247

 34.21

 Options exercisable at December 31, 2023

 194,228

 42.72

 NOTES

 (9)

 Stockholders' Equity – (continued)

 The
following table summarizes information about stock options outstanding and exercisable at December 31, 2023:

of Share-based Compensation of Stock Options Outstanding and Exercisable

 Options outstanding

 Options exercisable

 Number outstanding

 Weighted

 average

 remaining

 contractual

 life (Years)

 Weighted

 average

 exercise

 price

 intrinsic

 value

 exerciseable

 Weighted

 average

 remaining

 contractual

 life (Years)

 Weighted

 average

 exercise

 price

 intrinsic

 value

 262,247

 6.60

 $
 34.21

 $
 -

 194,228

 5.84

 $
 42.72

 $
 -

 The
intrinsic value for stock options is defined as the difference between the current market value and the exercise price. The total intrinsic
value of stock options exercised during the years ended December 31, 2023 and 2022, was $ 0 and $ 173,000, respectively. There were 0 and
 12,947 stock options exercised during the years ended December 31, 2023 and 2022, respectively.

 (e)

 Stock Warrants

 The
Company accounts for its common stock warrants under ASC 480, Distinguishing Liabilities from Equity, which requires any financial
instrument, other than an outstanding share, that, at inception, embodies an obligation to repurchase the issuer's equity shares,
or is indexed to such an obligation, and requires or may require the issuer to settle the obligation by transferring assets, to be classified
as a liability. In accordance with ASC 480, the Company's outstanding warrants from the November 2019 Offering are classified as
a liability. The liability is adjusted to fair value at each reporting period, with the changes in fair value recognized as gain (loss)
on change in fair value of warranty liability in the Company's consolidated statements of operations. The warrants issued in the
November 2019 Offering allow the warrant holder, if certain change in control events occur, the option 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 fundamental transaction.

 As
of December 31, 2023 and 2022, the Company had 64,362 warrants outstanding from the November 2019 Offering to purchase an equal number
of shares of common stock. The fair value of these warrants on November 18, 2019 (closing date of November 2019 Offering) and December
31, 2023 and 2022 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

 2023

 2022

 November 18,
 2019

 Expected life in years

 0.88

 1.88

 5.00

 Risk-free interest rate

 4.79
 %

 4.41
 %

 1.63
 %

 Dividend yield

 —

 —

 —

 Volatility

 100.00
 %

 100.00
 %

 224.47
 %

 Stock price

 $
 2.79

 $
 6.77

 $
 6.89

 NOTES

 (9)

 Equity – (continued)

the years ended December 31, 2023 and 2022, the Company recorded a non-cash gain of $ 213,000 and $ 566,000, respectively, from the change
in fair value of 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, 2022

 $

 Change in fair value of common stock warrants

 ( 212,690
)

 Balance at December 31, 2023

 $

 Additionally,
in the February 2020 Offering, the Company issued 296,593 common stock warrants. However, because these warrants do not provide the warrant
holder the option to put the warrant back to the Company, the warrants are classified as equity. As of December 31, 2023, there were
 49,433 warrants outstanding that were issued in the February 2020 Offering.

 The
following table summarizes the number of common stock warrants outstanding and the weighted average exercise price:

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

 Warrants

 Weighted Average

 Exercise Price

 Outstanding at December 31, 2022

 113,795

 $
 8.72

 Issued

 -

 -

 Exercised

 -

 -

 Expired

 -

 -

 Cancelled

 -

 -

 Forfeited

 -

 -

 Balance at December 31, 2023

 113,795

 $
 8.72

the years ended December 31, 2023 and 2022, zero common stock warrants to purchase one share of our common stock were exercised.

 The
following table summarizes information about common stock warrants outstanding at December 31, 2023:

 of Common Stock Warrants Outstanding

 Warrants outstanding

 Number exercisable

 Weighted average

 remaining

 contractual life

 (Years)

 Weighted average

 exercise price

 Aggregate intrinsic

 value

 113,795

 1.00

 $
 8.72

 $
 -

 NOTES

 (10) 401(k) Plan

 On
January 1, 2002, the Company adopted a tax qualified employee savings and retirement plan (the "401(k) Plan") covering eligible
employees. Pursuant to the 401(k) Plan, employees may elect to reduce current compensation by a percentage of eligible compensation,
not to exceed legal limits, and contribute the amount of such reduction to the 401(k) Plan. Beginning April 1, 2014, the 401(k) Plan
was amended to require matching contributions to the 401(k) Plan by the Company on behalf of the participants of 100 percent Company
match on up to four percent of an employee's compensation computed on a per pay period basis. The Company contributed $ 102,000
and $ 94,000, respectively, to the 401(k) Plan during the years ended December 31, 2023 and 2022.

 (11) Commitments and Contingencies

 Litigation

 The
Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of conducting
business. The Company records a liability when a particular contingency is probable and estimable.

 On
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. patents: 9,034,858; 9,205,057; 9,480,690; 9,757,390;
6,569,463; and 6,923,988. However, on February 11, 2020, the Company voluntarily dismissed allegations of patent infringement for expired
U.S. Patent Nos. 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,
2019. 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; 9,205,057; 9,480,690; and 9,757,390 invalid for failure to satisfy the written description requirement
of 35 U.S.C. § 112. Clarus still had remaining claims before the Court. On July 13, 2021, the Company entered into 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, 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. On July 15,
2021, the Court dismissed with prejudice the Company's claims and Clarus' counterclaims.

 On
November 14, 2019, the Company and certain of our officers were named as defendants in a purported shareholder class action lawsuit,
 Solomon Abady v. Lipocine Inc. et al., 2:19-cv-00906-PMW, filed in the United District Court for the District of Utah. The complaint
alleges that the defendants made false and/or misleading statements and/or failed to disclose that the Company's filing of the
NDA for TLANDO to the FDA contained deficiencies and as a result the defendants' statements about our business and operations were
false and misleading and/or lacked a reasonable basis in violation of federal securities laws. The lawsuit seeks certification as a class
action (for a purported class of purchasers of the Company's securities from March 27, 2019 through November 8, 2019), compensatory
damages in an unspecified amount, and unspecified equitable or injunctive relief. The Company has insurance that covers claims of this
nature. On April 14, 2023, a judgment was issued ordering the case dismissed with prejudice and closure of the action.

 NOTES

 (11)

 Commitments
 and Contingencies (continued)

 Management
does not currently believe that any other matter, individually or in the aggregate, will have a material adverse effect on our financial
condition, liquidity or results of operations.

 Guarantees
and Indemnifications

 In
the ordinary course of business, the Company enters into agreements, such as lease agreements, licensing agreements, clinical trial agreements,
and certain services agreements, containing standard guarantee and / or indemnifications provisions. Additionally, the Company has indemnified
its directors and officers to the maximum extent permitted under the laws of the State of Delaware.

 (12) Agreement with Spriaso, LLC

 The
Company has a license and a services agreement with Spriaso, a related-party that is majority-owned by certain current and former directors
of Lipocine Inc. and their affiliates. Under the license agreement, the Company assigned and transferred to Spriaso all of the Company's
rights, title and interest in its intellectual property to develop products for the cough and cold field. In addition, Spriaso received
all rights and obligations under the Company's product development agreement with a third-party. In exchange, the Company will
receive a royalty of 20 percent of the net proceeds received by Spriaso, up to a maximum of $ 10.0 million. Spriaso also granted back
to the Company an exclusive license to such intellectual property to develop products outside of the cough and cold field. The Company
also agreed to continue providing up to 10 percent of the services of certain employees to Spriaso for a period of time. The agreement
to provide services expired in 2021; however, it may be extended upon written agreement of Spriaso and the Company. The Company did not
receive any reimbursements from Spriaso for the years ended December 31, 2023 and 2022, respectively. Additionally, during the years
ended December 31, 2023 and 2022, the Company received $ 110,000 and $ 0, respectively, in royalty revenue from 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.

 (13) Subsequent Events

 On
January 12, 2024, the Company entered into a License Agreement with Verity Pharmaceuticals, Inc. for the commercialization of TLANDO
in the U.S. and for the development and commercialization rights to TLANDO XR in Canada as described in Note 4(c).

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 We
maintain "disclosure controls and procedures" within the meaning of Rule 13a-15(e) of the Securities Exchange Act of 1934,
as amended, or the Exchange Act. Our disclosure controls and procedures ("Disclosure Controls") are designed to ensure that
information required to be disclosed by us in the reports we file or submit under the Exchange Act, such as this Annual Report on Form
10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Our Disclosure
Controls include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.

 As
of the end of the period covered by this Annual Report on Form 10-K, we evaluated the effectiveness of the design and operation of our
Disclosure Controls, which was done under the supervision and with the participation of our management, including our Chief Executive
Officer and our Principal Financial Officer. Based on the controls evaluation, our Chief Executive Officer and Principal Financial Officer
have concluded that, as of the date of their evaluation, our Disclosure Controls were effective as of December 31, 2023.

 Management's
Report on Internal Control over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system
was designed to provide our management and board of directors reasonable assurance regarding the reliability of financial reporting and
preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting has inherent
limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses
in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion
or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected
on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial
reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

 Our
management has assessed the effectiveness of internal control over financial reporting as of December 31, 2023. In making this assessment,
we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated
Framework (2013). Based on our assessment we believe that, as of December 31, 2023, our internal control over financial reporting
is effective based on those criteria.

 Change
in Internal Control over Financial Reporting

the year ended December 31, 2023 there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.

 ITEM
9B. OTHER INFORMATION

the three months ended December 31, 2023, none of our directors or officers adopted or terminated a "Rule 10-b5-1 trading arrangement"
or "non-Rule 10-b5-1 trading arrangement" as each term is identified in Item 408 of Regulation S-K.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not
applicable.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Certain
of the information required by this item will be contained in our definitive Proxy Statement with respect to our 2024 Annual Meeting
of Stockholders, under the captions "Election of Directors," and "Compliance with Section 16(a) of the Exchange Act"
and is incorporated into this item by reference.

 ITEM
11. EXECUTIVE COMPENSATION

 The
information required by this item will be contained in our definitive Proxy Statement with respect to our 2024 Annual Meeting of Stockholders,
under the captions "Executive Compensation", "Compensation Committee Interlocks and Insider Participation", and
"Compensation Committee Report" and is incorporated into this item by reference.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS

 The
information required by this item will be contained in our definitive Proxy Statement with respect to our 2024 Annual Meeting of Stockholders,
under the captions "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information"
and is incorporated into this item by reference.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The
information required by this item will be contained in our definitive Proxy Statement with respect to our 2024 Annual Meeting of Stockholders
under the captions "Certain Relationships and Related Transactions" and "Independence of the Board" and is incorporated
into this item by reference.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The
information required by this item will be contained in our definitive Proxy Statement with respect to our 2024 Annual Meeting of Stockholders,
under the caption "Principal Accountant Fees and Services" and is incorporated into this item by reference.

 PART
IV

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)
The following documents are filed as part of this Annual Report on Form 10-K.

 1.
 Financial Statements. The financial statements listed on the accompanying Index to Consolidated Financial Statements are filed
as part of this report.

 2.
 Financial statement schedules. There are no financial statements schedules included because they are either not applicable or
the required information is shown in the consolidated financial statements or the notes thereto.

 3.
 Exhibits. The following exhibits are filed or incorporated by reference as part of this Form 10-K.

TO EXHIBITS

 Incorporation
By Reference

Description

 Form

 SEC
File No.

 Filing
Date

 2.1

 Agreement and Plan of Merger and Reorganization, dated July 24, 2013, by and among Marathon Bar Corp., Lipocine Operating Inc., and MBAR Acquisition Corp.

 2.1

 3.1

 Amended and Restated Certificate of Incorporation

 3.2

 3.2

 Amended and Restated Bylaws

 3.3

 3.3

 Certificate of Designation of Series A Junior Participating Preferred Stock.

 3.1

 12/1/2015

 3.4

 Certificate of Increase of Series A Junior Participating Preferred Stock

 3.1

 11/1/2021

 3.5

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Lipocine Inc.

 3.4

 6/28/2022

 3.6

 Certificate of Designation of Series B Preferred Stock

 3.2

 3/10/2023

 3.7

 Amendment to the Amended and Restated Bylaws of Lipocine Inc.

 3.1

 3/10/2023

 3.8

 Certificate of Amendment to the Amended and Restated Certificated of Incorporation of Lipocine Inc.

 3.2

 5/11/2023

 4.1

 Form of Common Stock certificate

 4.1

 4.2

 Second Amended and Restated Stockholder Rights Agreement dated as of November 1, 2021 by and between the Company and American Stock Transfer & Trust Company, LLC

 4.1

 11/1/2021

 4.3

 Form of Pre-Funded Warrant

 4.1

 11/14/2019

 4.4

 Form of Common Warrant

 4.2

 11/14/2019

 4.5

 Form of Common Warrant

 4.1

 2/26/2020

 4.6

 Description of Registered Securities

 4.6

 3/9/2022

 10.1**

 Lipocine Inc. Amended and Restated 2011 Equity Incentive Plan

 10.1

 10.2**

 Form of Stock Option Agreement and Option Grant Notice under the 2011 Equity Incentive Plan

 10.2

 10.3**

 Form of Restricted Stock Award Agreement and Notice under the 2011 Equity Incentive Plan

 10.3

 10.4**

 Form of Restricted Stock Unit Agreement and Notice under the 2011 Equity Incentive Plan

 10.4

 3/31/2014

 10.6

 Second Lease Extension and Modification Agreement, dated June 21, 2011, by and between Lipocine Inc. and Paradigm Resources, L.C.

 10.5

 10.7**

 Form of Indemnification Agreement by and between Lipocine Inc. and each of its directors and officers

 10.6

 Incorporation
 By Reference

 Description

 Form

 SEC
 File No.

 Filing
 Date

 10.8

 Registration Rights Agreement, dated May 25, 2004, by and between Lipocine Operating Inc. and Schwarz Pharma Limited (now UCB Manufacturing Ireland Ltd.)

 10.8

 10.9

 Registration Rights Agreement, dated April 20, 2001, by and among Lipocine Operating Inc., Elan International Services, Ltd., and Elan Pharma International Limited

 10.9

 10.10

 Form of Securities Purchase Agreement, dated July 26, 2013

 10.10

 7/31/2013

 10.11

 Form of Registration Rights Agreement, dated July 26, 2013

 10.11

 7/31/2013

 10.12+

 Manufacturing Agreement, dated August 27, 2013, by and between Lipocine Inc. and Encap Drug Delivery.

 10.12

 9/5/2013

 10.13**

 Executive Employment Agreement, dated January 7, 2014, by and between Lipocine Inc. and Dr. Mahesh V. Patel

 000-55092

 10.1

 1/7/2014

 10.15

 Commercial Manufacturing Services and Supply Agreement, dated March 3, 2016, by and between Lipocine Inc. and M.W. Encap Ltd.

 10.1

 5/9/2016

 10.16

 Controlled Equity Offering SM Sales Agreement, dated March 6, 2017, by and between Lipocine Inc. and Cantor Fitzgerald & Co.

 10.22

 3/6/2017

 10.17**

 Vice President Employment Agreement, dated November 5, 2018, by and between Lipocine Inc. and Nachiappan Chidambaram.

 10.1

 11/7/18

 10.18

 Loan and Security Agreement dated January 5, 2018

 10.1

 1/9/2018

 10.20

 Securities Purchase Agreement, dated as of November 14, 2019, by and between Lipocine, Inc. and the purchasers identified on the signature pages thereto

 10.2

 11/14/2019

 10.21

 Securities Purchase Agreement, dated as of February 25, 2020, by and between Lipocine, Inc. and the purchasers identified on the signature pages thereto

 10.2

 2/26/2020

 10.22

 Fourth Amended and Restated Lipocine Inc. 2014 Stock an d Incentive Plan

 S-8

 333-240197

 99.1

 07/30/2020

 10.23

 First Amendment to Loan and Security Agreement, dated February 16, 2021, made by and among Lipocine Inc., Lipocine Operating Inc. and Silicon Valley Bank

 10.1

 2/18/2021

 10.24***

 License Agreement dated October 14, 2021, by and between Lipocine, Inc. and Antares Pharma, Inc.

 10.1

 11/10/2021

 10.25***

 Amendment No. 1 to Commercial Manufacturing Services and Supply Agreement between Lipocine, Inc. and MW Encap Ltd. Dated October 13, 2021

 10.2

 11/10/2021

 10.26**

 Principal Accounting Officer Employment Agreement, dated March 7, 2022, by and between Lipocine Inc. and Krista Fogarty.

 8-K/A

 10.1

 3/7/2022

 10.27

 First Amendment to License Agreement, dated October 14, 2021, made by and among Lipocine Inc., and Antares Pharma, Inc.

 10.1

 5/9/2022

 Incorporation By
 Reference

 Exhibit Description

 Form

 SEC File No.

 Filing Date

 10.28*, ***

 License Agreement dated January 12, 2024 by and among Lipocine, Inc., Gordon Silver Limited, and Verity Pharmaceuticals

 21.1*

 Subsidiaries

 23.1*

 Consent of Tanner LLC

 31.1 *

 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2 *

 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1 *

 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.

 32.2 *

 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.

 97*

 Lipocine Inc. Clawback Policy

 101.INS *

 101.SCH *

 101.CAL *

 101.DEF *

 101.LAB *

 101.PRE *

 104*

 Cover

 *

 Filed herewith

 **

 Management contract or compensation plan or arrangement

 +

 Confidential treatment has been granted with respect
 to certain portions of this exhibit. Omitted portions have been submitted separately with the Securities and Exchange Commission.

 ***

 Certain portions of this exhibit have been omitted
 pursuant to Item 601(b)(10) of Regulation S-K. The Registrant hereby undertakes to furnish to the SEC, upon request, copies of any
 such instruments.

 ITEM 16. FORM 10-K SUMMARY

 None

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 Lipocine
 Inc.

 (Registrant)

 Dated:

 /s/
 Mahesh V. Patel

 Mahesh
 V. Patel, President and Chief

 Executive
 Officer

 (Principal
 Executive Officer and Principal Financial Officer)

 Dated:

 /s/
 Krista Fogarty

 Krista
 Fogarty, Corporate Controller

 (Principal
 Accounting Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

 Signature

 Title

 Date

 /s/
 Mahesh V. Patel

 President
and Chief Executive Officer (Principal Executive

 Mahesh V. Patel

 Officer and Principal Financial Officer)

 /s/
 Krista Fogarty

 Corporate Controller (Principal Accounting Officer)

 Krista Fogarty

 /s/
 Jeffrey Fink

 Director

 Jeffrey
Fink

 /s/
 Jill M. Jene

 Director

 Jill M. Jene

 /s/
 John Higuchi

 Director

 John Higuchi

 /s/
 R. Dana Ono

 Director

 R. Dana Ono

 /s/
 Spyros Papapetropoulos

 Independent Lead Director and Chairman
 of the Board

 Spyros Papapetropoulos