What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-12 · 189 added, 121 removed, 389 unchanged (44% of the section changed)

2 unchanged sentences

Condensed Balance Sheets

September 30,

Current Assets:

Cash and cash equivalents

Restricted cash

Deferred license costs

19 unchanged sentences

Preferred stock, $ 0.0001 par value, 6,000,000 shares authorized;

0 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

0 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.0001 par value, 90,000,000 shares authorized;

25,946,646 and 24,978,585 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

25,963,185 and 24,978,585 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Operating Income

12 unchanged sentences

Small Business Administration Economic Injury Disaster Grant

Extinguishment of PPP 7(a) loan

Other expense

Interest expense

11 unchanged sentences

Condensed Statements of Changes in Stockholders’ Equity

For the Three and Six Months Ended June 30, 2021

For the Three and Nine Months Ended September 30, 2021

Stockholders’

15 unchanged sentences

( 87,633,986 )

Exercise of stock options

Stock-based compensation

( 5,568,598 )

Balance - September 30, 2021

( 93,202,584 )

[1] Allocated fair value of warrants of $ 354,539 , less allocated issuance costs of $ 3,149 .

For the Three and Six Months Ended June 30, 2020

EYENOVIA, INC.

Condensed Statements of Changes in Stockholders’ Equity (Continued)

For the Three and Nine Months Ended September 30, 2020

Stockholders’

1 unchanged sentence

( 57,671,052 )

Issuance of common stock and warrants in public offering [2]

Issuance of common stock and warrants in private placement [1]

Stock-based compensation

9 unchanged sentences

( 68,137,527 )

Issuance of common stock in public offering [2]

Exercise of stock warrants

Exercise of stock options

Stock-based compensation

( 5,096,530 )

Balance – September 30, 2020

( 73,234,057 )

[1] Includes gross proceeds of $ 5,984,931 , less total issuance costs of $ 533,189 .

[2] Includes gross proceeds of $ 13,800,002 , less total issuance costs of $ 1,304,294 .

The accompanying notes are an integral part of these condensed financial statements.

1 unchanged sentence

Condensed Statements of Cash Flows

For the Six Months Ended

For the Nine Months Ended

September 30,

Cash Flows From Operating Activities

4 unchanged sentences

Amortization of debt discount

Extinguishment of PPP 7(a) Loan

Stock-based compensation

3 unchanged sentences

Deferred license costs

( 1,600,000 )

Accounts payable

10 unchanged sentences

Purchases of property and equipment

( 1,165,066 )

Net Cash Used In Investing Activities

( 1,165,066 )

Cash Flows From Financing Activities

Proceeds from sale of common stock and warrants in private placement [1]

Proceeds from sale of common stock in public offering [2]

Proceeds from exercise of stock warrants

6 unchanged sentences

Net Cash Provided By Financing Activities

Net Decrease in Cash and Cash Equivalents

( 1,194,985 )

Net (Decrease) Increase in Cash and Cash Equivalents

( 6,995,957 )

2 unchanged sentences

[1] Includes gross proceeds of $ 5,984,931 , less issuance costs of $ 415,795 deducted directly from the private placement.

[2] Includes gross proceeds of $ 13,800,002 , less issuance costs of $ 1,066,000 deducted directly from the offering proceeds.

EYENOVIA, INC.

Condensed Statements of Cash Flows (Continued)

Cash and restricted cash consisted of the following:

Restricted cash

Supplemental Disclosure of Cash Flow Information:

1 unchanged sentence

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Accrual of public offering costs

Purchase of insurance premium financed by note payable

5 unchanged sentences

Eyenovia, Inc.

(“Eyenovia” or the “Company”) is a clinical stage ophthalmic company developing a pipeline of advanced therapeutics based on its propriety array print (MAP TM ) platform technology.

Eyenovia aims to achieve clinical microdosing of next-generation formulations of novel and existing ophthalmic pharmaceutical agents using its high-precision targeted ocular delivery system, branded the Optejet ® , which has the potential to replace conventional eye dropper delivery and improve safety, tolerability, patient compliance and topical delivery success for ophthalmic eye treatments.

In clinical trials, the Optejet has demonstrated that Eyenovia’s targeted horizontal microdose delivery can achieve a significantly higher rate of successful ocular topical delivery compared to the established rate reported with traditional eye drops (~ 90 % vs.

(“Eyenovia” or the “Company”) is a clinical stage ophthalmic biopharmaceutical company developing a pipeline of microdose array print (MAP™) therapeutics.

Eyenovia aims to achieve clinical microdosing of next-generation formulations of well-established ophthalmic pharmaceutical agents using its high-precision targeted ocular delivery system branded the Optejet ® , which has the potential to replace conventional eye dropper delivery and improve safety, tolerability, patient compliance and topical delivery success for ophthalmic eye treatments.

In the clinic, the Optejet has demonstrated the ability to horizontally deliver ophthalmic medication with a success rate significantly higher than that of traditional eye drops (~ 90 % vs.

Using its proprietary delivery technology, Eyenovia is developing the next generation of smart ophthalmic therapies which target new indications or new combinations where there are currently no comparable drug therapies approved by the U.S.

1 unchanged sentence

Eyenovia’s microdose therapeutics follow the FDA-designated pharmaceutical registration and regulatory process.

Its products are classified by the FDA as drugs, and not medical devices or drug-device combination products.

On October 25, 2021, the Company announced the reclassification of the Company’s proprietary, first-in-class combination microdose formulation of tropicamide and phenylephrine for in-office pupil dilation, (“MydCombi” or “MicroStat”) as a drug-device combination product by the FDA in a Complete Response Letter (“CRL”) received on October 22, 2021, following a change in the agency’s legal interpretation of its authorities imposed by a recent court ruling.

The Company is preparing the necessary documents for expedited resubmission of the new drug application for MydCombi in response to the CRL.

The Company believes that its other product candidates will similarly be classified by the FDA as drug-led combination products that would be subject to marketing approval via new drug applications.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

2 unchanged sentences

GAAP for complete financial statements.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed financial statements of the Company as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020.

The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 or any other period.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related disclosures of the Company as of December 31, 2020 and for the year then ended, which were included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2021.

In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed financial statements of the Company as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020.

The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 or any other period.

Securities and Exchange Commission (“SEC”) on March 30, 2021.

Note 2 – Summary of Significant Accounting Policies

1 unchanged sentence

Liquidity and Going Concern

As of June 30, 2021, the Company had cash of approximately $ 27.2 million and an accumulated deficit of approximately $87.6 million.

For the six months ended June 30, 2021 and 2020, the Company incurred net losses of approximately $10.2 million and $10.5 million, respectively, and used cash in operations of approximately $9.9 million and $9.9 million, respectively.

As of September 30, 2021, the Company had unrestricted cash and cash equivalents of approximately $ 13.5 million and an accumulated deficit of approximately $93.2 million.

For the nine months ended September 30, 2021 and 2020, the Company incurred net losses of approximately $15.8 million and $15.6 million, respectively, and used cash in operations of approximately $15.0 million and $11.9 million, respectively.

Pursuant to the At-The-Market Offering (see Note 9 – Stockholders’ Equity – At-The-Market Offering and Note 11 – Subsequent Events – At-The-Market Offering), the Company commenced sales of its common stock on October 6, 2021.

As of the filing date, the Company has received approximately $ 12.8 million in gross proceeds and $ 12.4 million in net proceeds from the sale of 2,435,604 shares of its common stock.

The Company does not have recurring revenue and has not yet achieved profitability.

2 unchanged sentences

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date that these financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise further capital, through the sale of additional equity or debt securities or otherwise, to support its future operations.

Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to generate sufficient recurring revenues or the Company’s ability to raise further capital, through the sale of additional equity or debt securities or otherwise, to support its future operations.

The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures.

The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings.

If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Cash and Cash Equivalents

developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings.

If the Company is unable to generate sufficient recurring revenues or secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents in the financial statements.

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain executed agreements are recorded as Restricted Cash on the balance sheets, such as the collateralized money market account pursuant to the Loan and Security Agreement, dated May 7, 2021 with Silicon Valley Bank (“SVB”), as amended on September 29, 2021 by the First Amendment to the Loan and Security Agreement.

See Note 6 - Notes Payable - Silicon Valley Bank Loan.

In connection with which the Company pledged to establish and maintain a collateralized money market account in the amount of $ 7,875,000 .

The Company has cash deposits in a financial institution which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions.

As of June 30, 2021 and December 31, 2020, the Company had cash balances in excess of FDIC insurance limits of $ 26,676,843 and $ 28,121,828 , respectively.

As of September 30, 2021 and December 31, 2020, the Company had cash balances in excess of FDIC insurance limits of $ 21,125,871 and $ 28,121,828 , respectively.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period plus fully vested shares that are subject to issuance for little or no monetary consideration.

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period, plus weighted average vested but unsettled restricted stock units.

Diluted earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.

The following securities are excluded from the calculation of weighted average diluted common shares because their inclusion would have been anti-dilutive:

September 30,

Total potentially dilutive shares

9 unchanged sentences

Our policy is to recognize amounts allocated to joint operating activities as a reduction in research and development expense.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Under ASC 606, we recognize revenue when our customers obtain control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

5 unchanged sentences

Recognize revenue when the company satisfies a performance obligation.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

We must make significant judgments in our revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.

11 unchanged sentences

See Note 7 – Commitments and Contingencies for additional details.

Deferred License Fee

The Company enters into license agreements which provide for the receipt of non-refundable, upfront licensing payments.

These payments are recorded as deferred license fees and will be earned and recognized as revenue upon the satisfaction of performance obligations.

See Note 7 – Commitments and Contingencies for additional details.

Deferred License Costs

The Company enters into license agreements which provide for payment of license costs in connection with the Company’s receipt of license fees.

These payments are recorded as deferred license costs and will be recorded as an expense when the related license fee revenue is recognized.

See Note 8 – Related Party Transactions for additional details.

Recently Adopted Accounting Standards

8 unchanged sentences

This standard did not have a material impact on the Company’s financial position, results of operations or cash flow.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”).

In February 2016, the FASB issued ASU No.

2016-02 “Leases (Topic 842)” (“ASU 2016-02”).

ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases.

3 unchanged sentences

ASU 2016-02, as amended, is now effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The FASB issued ASU 2019-01 “Leases (Topic 842) Codification Improvements” in March 2019 and ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU 2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018.

The FASB issued ASU No.

2019-01 “Leases (Topic 842) Codification Improvements” in March 2019 and ASU No.

2018-10 “Codification Improvements to Topic 842, Leases” and ASU No.

2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU No.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018.

ASU 2019-01, ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02.

1 unchanged sentence

The Company is currently evaluating ASU 2016-02 and its impact on its financial position, results of operations, and cash flows.

On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange.

On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.” This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange.

This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

4 unchanged sentences

Note 3 – Prepaid Expenses and Other Current Assets

As of June 30, 2021 and December 31, 2020, prepaid expenses and other current assets consisted of the following:

As of September 30, 2021 and December 31, 2020, prepaid expenses and other current assets consisted of the following:

September 30,

Payroll tax receivable

3 unchanged sentences

Prepaid licenses and subscriptions

Prepaid patent expenses

Prepaid conference expenses

3 unchanged sentences

Note 4 – Accrued Compensation

As of June 30, 2021 and December 31, 2020, accrued compensation consisted of the following:

As of September 30, 2021 and December 31, 2020, accrued compensation consisted of the following:

September 30,

Accrued bonus expenses

4 unchanged sentences

Note 5 – Accrued Expenses and Other Current Liabilities

As of June 30, 2021 and December 31, 2020, accrued expenses and other current liabilities consisted of the following:

As of September 30, 2021 and December 31, 2020, accrued expenses and other current liabilities consisted of the following:

September 30,

Accrued research and development expenses

7 unchanged sentences

Note 6 – Notes Payable

As of June 30, 2021 and December 31, 2020, notes payable consisted of the following:

June 30, 2021

As of September 30, 2021 and December 31, 2020, notes payable consisted of the following:

September 30, 2021

December 31, 2020

8 unchanged sentences

On May 8, 2020, the Company received cash proceeds of $ 463,353 pursuant to a loan provided in connection with the Paycheck Protection Program under the CARES Act (the “PPP Loan”).

The PPP Loan provides for monthly installment payments of $ 19,508 beginning in August 2021 with the remaining balance due on May 3, 2022, the maturity date.

The PPP Loan bears interest at a fixed rate of 1.00 % per annum.

Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company is eligible to apply for and receive forgiveness for all or a portion of its PPP Loan.

The PPP Loan provided for monthly installment payments of $ 19,508 beginning in August 2021 with the remaining balance due on May 3, 2022, the maturity date.

The PPP Loan incurred interest at a fixed rate of 1.00 % per annum.

Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company was eligible to apply for and receive forgiveness for all or a portion of its PPP Loan.

The Company applied for loan forgiveness on the PPP Loan in March 2021.

Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP Loan, including, but not limited to, payroll costs and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee and compensation levels following the funding of the PPP Loan.

The Company has used the proceeds of its PPP Loan for Qualifying Expenses.

However, no assurance is provided that the Company will be able to obtain forgiveness of its PPP Loan in whole or in part.

Any amounts that are not forgiven incur interest at 1.0 % per annum and monthly repayments of principal and interest are deferred until six months after the Small Business Administration makes a determination on forgiveness.

While the PPP Loan currently has a two-year maturity, the amended law permits the borrower to request a five-year maturity from its lender.

During the three months ended June 30, 2021 and 2020, the Company recorded interest expense of $ 4,481 and $ 4,333 , respectively.

During the six months ended June 30, 2021 and 2020, the Company recorded interest expense of $ 6,963 and $ 6,032 , respectively.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

The Company received notification in August 2021 that it had received approval for full loan forgiveness of the PPP Loan in the amount of $ 463,353 .

The Company has recorded this extinguishment as other income in the condensed statement of operations for the three and nine months ended September 30, 2021.

The Company also received notification of forgiveness of accrued interest payable of $ 5,738 , which has been reversed from interest expense.

Silicon Valley Bank Loan

On May 7, 2021 (the “Effective Date”), the Company entered into a Loan and Security Agreement (the “Loan”) with Silicon Valley Bank (the “Lender”, or “SVB”) for an aggregate principal amount of up to $ 25.0 million.

On May 7, 2021 (the “Effective Date”), the Company entered into a Loan and Security Agreement (the “Loan”) with Silicon Valley Bank (“SVB”) for an aggregate principal amount of up to $ 25.0 million.

The Loan bears interest at an annual rate equal to the greater of (a) the sum of 1.25% plus the prime rate as reported in The Wall Street Journal and (b) 5.00 %.

3 unchanged sentences

The interest-only period can be extended to June 1, 2023, upon the occurrence of a milestone event.

Upon the end of the interest-only period, the Company will make regular monthly amortizing payments of principal and interest through the maturity date.

Upon the end of the interest-only

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

period, the Company will make regular monthly amortizing payments of principal and interest through the maturity date.

The Loan indicates a prepayment fee of 1.0 % to 3.0 %, as follows:

3 unchanged sentences

The Loan also provides for a final payment.

The final payment is in addition to and not a substitution for the regular monthly payments of principal plus accrued interest due on the earliest to occur of the loan maturity date, the repayment of the loan in full or the termination of the Loan Agreement, in an amount equal to the original aggregate principal amount of the multiplied by 5.0 %.

The initial tranche of the Loan, in the amount of $ 7.5 million was received by the Company on May 7, 2021.

In connection with the Loan, the Company issued to the Lender warrants to purchase 91,884 shares of common stock at an exercise price per share equal to $ 4.76 .

In connection with the Loan, the Company issued warrants to SVB to purchase 91,884 shares of common stock at an exercise price per share equal to $ 4.76 .

The warrants are exercisable for a period of ten years from the date of issuance.

At the Company’s option, Eyenovia has the ability to draw down the remaining $ 17.5 million in gross proceeds in two tranches over the next two years based upon the achievement of several milestones in accordance with the terms of the Loan.

During the period ended June 30, 2021, the Company recorded interest expense relating to the Loan of $ 54,516 .

The following are the scheduled future annual maturities, subject to an extension of the interest-only period:

Remainder of 2021

At the Company’s option, the Company has the ability to draw down the remaining $ 17.5 million in gross proceeds in two tranches over the next two years based upon the achievement of several milestones in accordance with the terms of the Loan.

On September 29, 2021, the Company and SVB executed the First Amendment to the Loan and Security Agreement (the “Amendment”).

In accordance with the Amendment, the Company must maintain a collateralized money market account in the amount of $ 7,875,000 .

The Company has recorded this amount as Restricted Cash.

See Note 2 - Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash.

This account must be maintained until the Release Event occurs (defined as when the Company has received approval by the FDA of the MydCombi product and achieved the minimum equity raise under the terms of the amended agreement, on or prior to November 30, 2021).

Given the FDA’s recent reclassification of MydCombi as a drug-device combination and the need to resubmit a new drug application in early 2022, (See Note 11 - Subsequent Events), the restricted cash will become callable on November 30, 2021, at SVB’s election, to satisfy the Loan obligations.

Therefore, the Loan has been fully classified as a current note payable.

During the three and nine months ended September 30, 2021, the Company recorded interest expense relating to the Loan of $ 95,833 and $ 150,349 , respectively.

The Company determined that the warrants should be equity-classified and that the relative fair value was $ 354,539 , by using the Black-Scholes option pricing methodology using the following assumptions:

5 unchanged sentences

See the table below for additional details:

June 30, 2021

September 30, 2021

Gross loan proceeds

3 unchanged sentences

Amortization of debt discount

Note payable - current portion

Note payable - non-current portion

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 7 – Commitments and Contingencies

5 unchanged sentences

On August 10, 2020, the Company entered into the Arctic Vision License Agreement pursuant to which Arctic Vision may develop and commercialize MicroPine for the treatment of progressive myopia and MicroLine for the treatment of presbyopia in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Under the terms of the Arctic Vision License Agreement, the Company received a non-refundable, upfront payment of $ 4.0 million, before any payments to Senju Pharmaceutical Co., Ltd.

6 unchanged sentences

As a result, the Company recognized the remaining $ 2.0 million of deferred license fees and recognized the remaining $ 0.8 million of deferred license costs related to the Senju payment during the three months ended June 30, 2021.

In addition, the Company may receive up to a total of $ 41.75 million in additional payments, based on various development and regulatory milestones, including the initiation of clinical research and regulatory approvals in Greater China and South Korea, and development costs.

In addition, the Company may receive up to a total of $ 43.75 million in additional payments, based on various development and regulatory milestones, including the initiation of clinical research and regulatory approvals in Greater China and South Korea (up to $ 39.75 million), and development costs (up to $ 4.0 million).

In December 2020, the Company satisfied a performance obligation which resulted in the Company recognizing $ 2.0 million of milestone revenues, pursuant to the Arctic Vision License Agreement.

Arctic Vision also will purchase its supply of MicroPine and MicroLine from the Company or, for such products not supplied by the Company, pay the Company a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments.

No royalty payments were earned through June 30, 2021.

The $ 2.0 million was received from Arctic Vision in December 2020.

The milestone revenue referred to above includes $ 2.0 million related to the MicroStat product resulting from Amendment 1 to the Arctic Vision License Agreement.

On September 14, 2021, the Company and Arctic Vision executed this amendment which provides for a one-time upfront payment of $ 250,000 and milestone payments of $ 2.0 million based on the achievement of filing for and receiving regulatory approval separately from China and South Korea for the MicroStat Product.

The Company anticipates the Marketing Authorization Application (MAA) filings to occur in December 2023 and the receipt of regulatory approval to occur in December 2024.

The Company didn’t recognize revenue for the $ 250,000 upfront payment because it was passed through to Senju.

See Note 8 - Related Party Transactions for additional information.

Arctic Vision also will purchase its supply of MicroPine, MicroLine and MicroStat from the Company or, for such products not supplied by the Company, pay the Company a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments.

No royalty payments were earned through September 30, 2021.

The Company will pay a mid-double digit percentage of such payments, royalties, or net proceeds of such supply to Senju pursuant to the Senju License Agreement.

See Note 8 – Related Party Transactions for additional details.

See Note 8 – Related Party Transactions- Senju License Agreement for additional details.

Bausch License Agreement

3 unchanged sentences

The Company will consider payment earned once certain administrative functions are transferred to Bausch Health, permitting Bausch Health to assume supervisory oversight of the ongoing MicroPine study (the CHAPERONE study).

The upfront payment has not been earned as of June 30, 2021.

The upfront payment has not been earned as of September 30, 2021.

Bausch Health could also pay the Company up to an aggregate of approximately $ 35.0 million in additional payments, depending on the achievement of certain regulatory and launch-based milestones.

No milestone payments were earned through June 30, 2021.

Under the terms of the Bausch License Agreement, on a country-by-country basis and Bausch Licensed Product-by- Bausch Licensed Product basis, Bausch Health will pay the Company royalties on a tiered basis (ranging from mid-single digit to mid-teen percentages) on gross profits from the sales of the Bausch Licensed Product in the Licensed Territory, subject to certain adjustments in the event of generic entry, negative gross profits or patent expiration, for a period of the later to occur of the 10th anniversary of the first commercial

No milestone payments were earned through September 30, 2021.

No royalty payments were earned through September 30, 2021.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

sale of a Bausch Licensed Product in such country in the Licensed Territory or the expiration of the last valid patent claim for a Bausch Licensed Product in such country in the Licensed Territory.

No royalty payments were earned through June 30, 2021.

Note 8 – Related Party Transactions

Lease Agreements

The Company’s Vice President of Research and Development and Manufacturing (“VP of R&D”) owns a company that entered into a lease agreement with the Company on September 15, 2016 to lease 953 square feet of space located in Reno, Nevada with respect to research and development activities.

The Company’s Vice President of Research and Development and Manufacturing (“VP of R&D”) owns a company that entered into a lease agreement with the Company on September 15, 2016 to lease 953 square feet of space located in Reno, NV with respect to its research and development activities.

The initial monthly base rent was $ 3,895 per month over the term of the lease and the security deposit was $ 3,895 .

On September 15, 2018, the Company amended the lease agreement to extend it until September 14, 2020 and increase the monthly base rent and security deposit to $ 4,012 .

On September 15, 2020, the Company amended the lease agreement to extend it until September 14, 2022 and increase the monthly base rent and security deposit to $ 5,404 .

The Company made $ 82,500 of leasehold improvements related to this lease which are included on the condensed balance sheet.

The Company’s rent expense for this space is recorded in Research and Development on the condensed statement of operations and amounted to $ 16,212 and $ 15,494 for the three months ended June 30, 2021 and 2020, respectively, and $ 32,424 and $ 27,530 , respectively, for the six months ended June 30, 2021 and 2020.

The lease agreement was amended again on April 6, 2020 to lease additional space and increase the monthly base rent and security deposit to $ 5,247 .

On September 15, 2020, the Company agreed to extend the lease term until September 14, 2022 and increase the monthly base rent and security deposit to $ 5,404 .

The Company made $ 122,298 of leasehold improvements related to this lease which are included on the balance sheet.

The Company’s rent expense amounted to $ 16,212 and $ 15,982 for the three months ended September 30, 2021 and 2020, respectively, and $ 48,636 and $ 43,512 for the nine months ended September 30, 2021 and 2020, respectively.

Senju License Agreement

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Senju is owned by the family of a former member of the Company’s Board of Directors and, together, they beneficially own greater than 5 % of the Company’s common stock.

On April 8, 2020, Eyenovia entered into an amendment (the “License Amendment”) to the Exclusive License Agreement.

On April 8, 2020, the Company entered into an amendment (the “License Amendment”) to the Exclusive License Agreement.

Pursuant to the License Amendment, the Company can license to any third party the right to research, develop, commercialize, manufacture or use certain products identified below (the “Senju Licensed Products”) previously licensed to Senju in China (including the People’s Republic of China, Hong Kong, Macao, and Taiwan) and South Korea (the “Territory”) if such a license was executed by the Company by April 8, 2021.

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Pursuant to the Letter Agreement, the Company will pay a mid-double digit percentage of certain payments, royalties, or net proceeds received from Arctic Vision in connection with the Arctic Vision License Agreement to Senju.

The Exclusive License Agreement was amended further by the License Amendment 2, effective September 14, 2021 (the “Amendment 2”).

The Amendment 2 excludes Greater China and South Korea from the territory in which Senju was granted an exclusive royalty-bearing license from the Company.

In consideration for this exclusion, and upon and after the execution of Amendment 1 with Arctic Vision, the Company must make payments to Senju based on non-royalty license revenue and sales revenue, including a one-time upfront payment of $ 250,000 which represented an inducement to Senju to approve Amendment 1 of the Arctic Vision License Agreement related to the MicroStat product.

This upfront payment to Senju was in addition to and separate from the previously established 40 % payment on milestone revenue.

See Note 7 – Commitments and Contingencies – Arctic Vision License Agreement for additional details.

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The Units were sold to the public at a price of $ 2.21425 per Unit and to certain directors and executive officers at a price of $ 2.42625 per Unit.

The Company generated approximately $ 5.3 million of net proceeds in the offering after deducting placement agent fees and offering expenses.

The Company generated approximately $ 5.45 million of net proceeds in the offering after deducting placement agent fees and offering expenses of $ 0.53 million.

In the offering, the Company issued an aggregate of 2,675,293 shares of common stock, Class A Warrants to purchase up to 1,337,659 shares of common stock, and Class B Warrants to purchase up to 2,006,495 shares of common stock.

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The exercise price of the Class B Warrants issued to the public is $ 2.4696 per share and the exercise price of the Class B Warrants issued to the directors and officers is $ 2.724 per share.

See “Warrants” below for additional details.

In connection with the private placement, on March 23, 2020, the Company also entered into a Registration Rights Agreement with the investors.

Pursuant to the Registration Rights Agreement, the Company was obligated to file with the SEC, no later than 30 days following the date on which the Company filed its Form 10-K for the year ended December 31, 2019 with the SEC, a registration statement on Form S-3 covering the shares of common stock issued in the offering and the shares of common stock underlying the Warrants.

Pursuant to the Registration Rights Agreement, the Company agreed to file with the SEC, no later than 30 days following the date on which the Company files its Form 10-K for the year ended December 31, 2019 with the SEC, a registration statement on Form S-3 covering the shares of common stock issued in the offering and the shares of common stock underlying the Warrants.

The Company timely filed the registration statement on Form S-3 (Registration Statement No.

333-237790), which was declared effective by the SEC on May 13, 2020.

333-237790), which was declared and has remained effective with the SEC since May 13, 2020.

Stock Options

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For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Expected term (years)

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0.26 % - 1.32 %

0.34 % - 1.32

Expected volatility

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Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

The weighted average estimated grant date fair value of the stock options granted for the three months ended June 30, 2021 and 2020 was approximately $ 3.48 and $ 2.13 per share, respectively.

The weighted average estimated grant date fair value of the stock options granted for the six months ended June 30, 2021 and 2020 was approximately $ 4.33 and $ 2.17 per share, respectively.

The weighted average estimated grant date fair value of the stock options granted for the three months ended September 30, 2021 and 2020 was approximately $ 3.56 and $ 2.71 per share, respectively.

The weighted average estimated grant date fair value of the stock options granted for the nine months ended September 30, 2021 and 2020 was approximately $ 4.16 and $ 2.24 per share, respectively.

On June 17, 2021, an employee exercised an option to purchase common shares on a cashless basis, which resulted in 13,675 shares being withheld and not issued, to cover the cost to exercise and all payroll taxes.

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NOTES TO CONDENSED FINANCIAL STATEMENTS

A summary of the option activity during the six months ended June 30, 2021 is presented below:

A summary of the option activity during the nine months ended September 30, 2021 is presented below:

Outstanding January 1, 2021

Outstanding June 30, 2021

Exercisable June 30, 2021

The following table presents information related to stock options as of June 30, 2021:

Outstanding September 30, 2021

Exercisable September 30, 2021

The following table presents information related to stock options as of September 30, 2021:

Options Outstanding

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Remaining Life

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

A summary of the Warrant activity for the six months ended June 30, 2021 is presented below:

Outstanding January 1, 2021

Outstanding June 30, 2021

Exercisable June 30, 2021

The following table presents information related to Warrants as of June 30, 2021:

Warrants Outstanding

Warrants Exercisable

Remaining Life

See Note 6 – Notes Payable – for details on the warrant issued in connection with the Silicon Valley Bank loan.

Restricted Stock Units

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The RSUs had an aggregate grant date fair value of $ 156,200 , which was recognized over the vesting period.

Stock Warrant Exercises

During the six months ended June 30, 2021, the Company issued an aggregate of 877,014 shares of common stock pursuant to the exercise of warrants for aggregate proceeds of $ 2,103,991 at exercise prices ranging from $ 2.058 to $ 2.4696 .

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense related to stock options and restricted stock units of $ 637,355 ($ 319,497 of which was included within research and development expenses and $ 317,858 was included within general and administrative expenses on the condensed statements of operations) and $ 633,146 ($ 348,447 of which was included within research and development expenses and $ 284,699 was included within general and administrative expenses on the condensed statements of operations) during the three months ended June 30, 2021 and 2020, respectively.

During the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to stock options and restricted stock units of $ 1,294,268 ($ 649,210 of which was included within research and development expenses and $ 645,058 was included within general and administrative expenses on the condensed statements of operations) and $ 1,217,011 ($ 655,856 of which was included within research and development expenses and $ 561,155 was included within general and administrative expenses on the condensed statements of operations), respectively.

As of June 30, 2021, there was

Pursuant to the terms of the grants, vested RSUs are not issued until (a) termination of the director’s service to the Company;

or (b) upon a change-of-control transaction (as specified).

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

$ 5,796,853 of unrecognized stock-based compensation expense which the Company expects to recognize over a weighted average period of 2.2 years.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense related to stock options and RSUs.

During the three months ended September 30, 2021 and 2020, the Company recorded expense of $ 777,467 ($ 489,121 of which was included within research and development expenses and $ 288,346 of which was included within general and administrative expenses on the condensed statement of operations) and $ 609,930 ($ 346,294 of which was included within research and development expenses and $ 263,636 of which was included within general and administrative expenses on the condensed statement of operations), respectively.

During the nine months ended September 30, 2021 and 2020, the Company recorded expense of $ 2,071,735 ($ 1,138,331 of which was included within research and development expenses and $ 933,404 was included within general and administrative expenses on the condensed statement of operations) and $ 1,826,941 ($ 1,002,150 of which was included within research and development expenses and $ 824,791 was included within general and administrative expenses on the condensed statement of operations), respectively.

As of September 30, 2021, there was $ 5,787,351 of unrecognized stock-based compensation expense which the Company expects to recognize over a weighted average period of 2.1 years.

A summary of warrant activity for the nine months ended September 30, 2021 is presented below:

Outstanding January 1, 2021

Outstanding September 30, 2021

Exercisable September 30, 2021

The following table presents information related to Warrants as of September 30, 2021:

Warrants Outstanding

Warants Exercisable

Remaining Life

See Note 6 – Notes Payable – for details on the warrant issued in connection with the SVB loan.

During the three months ended September 30, 2020, warrants for the purchase of 1,080,497 shares of the Company’s common stock, with exercise prices of either $ 2.058 or $ 2.4696 per share, were exercised for aggregate proceeds of approximately $ 2.3 million, while no warrants were exercised during the three months ended September 30, 2021.

During the nine months ended September 30, 2021 and 2020, warrants for the purchase of 877,014 and 1,248,161 shares of the Company’s common stock, respectively, with exercise prices of either $ 2.058 or $ 2.4696 per share, were exercised for aggregate proceeds of approximately $ 2.1 million and $2.6 million, respectively.

At-The-Market Offering

On May 14, 2021, the Company entered into a Sales Agreement (the “Agreement”) with SVB Leerink LLC (“SVB Leerink”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $ 30 million through SVB Leerink as its sales agent.

Subject to the terms and conditions of the Agreement, SVB Leerink may sell the Common Stock by any method permitted by law deemed to be an “at-the-market offering”.

On May 14, 2021, the Company entered into a Sales Agreement (the “Agreement”) with SVB Leerink LLC (“SVB Leerink”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock (the “Common Stock”), having an aggregate offering price of up to $ 30 million through SVB Leerink as its sales agent.

Subject to the terms and conditions of

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

the Agreement, SVB Leerink may sell the Common Stock by any method permitted by law deemed to be an “at-the-market offering”.

SVB Leerink will use commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose).

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The Company is not obligated to make any sales of Common Stock under the Agreement.

Through June 30, 2021, the Company has not sold any shares of common stock under the Agreement.

through September 30, 2021, the Company had not sold any shares of common stock under the Agreement.

See Note 11 - Subsequent Events - At-The-Market Offering for additional details.

Note 10 – Employee Benefit Plans

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Under the terms of the Plan, eligible employees are able to defer a percentage of their pay every pay period up to annual limitations set by Congress and the Internal Revenue Service under Section 401(k) of the Internal Revenue Code.

For 2021, the Company’s Board of Directors has approved a matching contribution equal to 100 % of elective deferrals up to 4 % of eligible earnings with the matching contribution subject to certain vesting requirements as outlined in the Plan documents.

During the three months ended June 30, 2021 and 2020, the Company recorded expense of $ 46,663 and $ 22,515 associated with its matching contributions, respectively.

During the six months ended June 30, 2021 and 2020, the Company recorded expense of $ 110,841 and $ 80,486 associated with its matching contributions, respectively.

For 2021 and 2020, the Company’s Board of Directors has approved a matching contribution equal to 100 % of elective deferrals up to 4 % of eligible earnings with the matching contribution subject to certain vesting requirements as outlined in the Plan documents.

During the three months ended September 30, 2021 and 2020, the Company recorded expense of $ 34,076 and $ 25,535 associated with its matching contributions, respectively.

During the nine months ended September 30, 2021 and 2020, the Company recorded expense of $ 144,917 and $ 106,021 associated with its matching contributions, respectively.

Note 11 – Subsequent Events

At-The-Market Offering

Pursuant to the At-The-Market Offering (see Note 9 – Stockholders’ Equity – At-The-Market Offering) the Company commenced sales of its common stock on October 6, 2021.

As of the filing date, the Company has received approximately $ 12.8 million in gross proceeds and $ 12.4 million in net proceeds from the sale of 2,435,604 shares of its common stock.

MydCombi FDA Application

On October 25, 2021, the Company announced the reclassification of the Company’s proprietary, first-in-class combination microdose formulation of tropicamide and phenylephrine for in-office pupil dilation, MydCombi, as a drug-device combination product by the FDA in a CRL received on October 22, 2021, following a change in the agency’s legal interpretation of its authorities imposed by a recent court ruling.

The Company is preparing the necessary documents for expedited resubmission of the new drug application for MydCombi in response to the CRL.

See Note 1 – Business Organization, Nature of Operations and Basis of Presentation and Note 6 – Notes Payable – Silicon Valley Bank Loan.

Employee Stock Options

On July 6, 2021, the Company granted ten-year stock options to employees, pursuant to its Amended and Restated 2018 Omnibus Stock Incentive Plan, to purchase an aggregate of 224,000 shares of the Company’s common stock at an exercise price of $ 4.81 per share.

On October 27, 2021, the Company granted ten-year stock options to employees, pursuant to its Amended and Restated 2018 Omnibus Stock Incentive Plan, to purchase an aggregate of 35,000 shares of the Company’s common stock at an exercise price of $ 4.06 per share.

The options expire on the tenth anniversary of the grant date and they vest with respect to one -third of the shares underlying the awards on the first anniversary of the grant date and, with respect to the remaining two -thirds of the shares underlying the awards, in equal monthly installments over the subsequent two years .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements