What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-30 compared with 2021-03-30 · 8 added, 282 removed, 4 unchanged (99% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Common Equity

Our common stock trades

on the Nasdaq Capital Market under the symbol “EYEN.”

Based upon information furnished

by our transfer agent, at March 29, 2021, we had approximately 130 holders of record of our common stock.

Our common stock trades on the Nasdaq Capital Market under the symbol “EYEN.”

Based upon information furnished by our transfer agent, at March 30, 2022, we had approximately 34 holders of record of our common stock.

Dividend Policy

We have never declared

dividends on our equity securities, and currently do not plan to declare dividends on shares of our common stock in the foreseeable

We have never declared dividends on our equity securities, and currently do not plan to declare dividends on shares of our common stock in the foreseeable future.

We expect to retain our future earnings, if any, for use in the operation and expansion of our business.

Subject to the

foregoing, the payment of cash dividends in the future, if any, will be at the discretion of our Board of Directors and will depend

upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant

by our Board.

Securities Authorized for Issuance under

Equity Compensation Plans

See Item 12 of this

report for disclosure regarding securities authorized for issuance under equity compensation plans required by Item 201(d) of

Regulation S-K.

Subject to the foregoing, the payment of cash dividends in the future, if any, will be at the discretion of our Board of Directors and will depend upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant by our Board.

Securities Authorized for Issuance under Equity Compensation Plans

See Item 12 of this report for disclosure regarding securities authorized for issuance under equity compensation plans required by Item 201(d) of Regulation S-K.

Recent Sales of Unregistered Securities

Purchases of Equity Securities by the

Issuer and Affiliated Purchasers

Selected Financial Data.

Smaller reporting companies

such as us are not required to provide the information required by this Item.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion

and analysis is based on, and should be read in conjunction with our financial statements for the years ended December 31,

2020 and 2019, which are included elsewhere in this Annual Report on Form 10-K.

This Management’s Discussion and Analysis

of Financial Condition and Results of Operations contains statements that are forward-looking.

These statements are based on current

expectations and assumptions that are subject to risk, uncertainties and other factors.

These statements are often identified by

the use of words such as “may,”

“will,”

“expect,”

“believe,”

“anticipate,”

“intend,”

“could,”

“estimate,”

or “continue,”

and similar expressions or variations.

Actual results could differ materially because of the factors discussed in “Risk Factors”

elsewhere in this Annual

Report on Form 10-K, and other factors that we have not identified.

We are a clinical stage ophthalmic company

developing a pipeline of advanced therapeutics based on our proprietary microdose array print (MAP™) platform technology.

We aim to achieve clinical microdosing of next-generation formulations of well-established ophthalmic pharmaceutical agents using

our 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 traditional eye drops (~ 90% vs.

Our technology also can deliver up to a 75% reduction in ocular drug and preservative

exposure and has demonstrated significant improvement in the therapeutic index in drugs used for mydriasis and IOP lowering through

three Phase II and Phase III trials.

Using the Optejet, we are developing the next generation of smart ophthalmic therapeutics

which target new indications or new combinations where there are currently no comparable drug therapies approved by the U.S.

and Drug Administration, or the FDA.

Our microdose therapeutics follow the FDA-designated pharmaceutical registration and regulatory

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

is currently focused on the late-stage development of microdosed medications for progressive myopia, presbyopia, and mydriasis.

MicroPine is our first-in-class topical

therapy for the treatment of progressive myopia, a back-of-the-eye ocular disease associated with pathologic axial elongation and

sclero-retinal stretching.

In the United States, myopia is estimated to affect approximately 25 million children, with up to 5

million considered to be at risk for high myopia.

In February 2019, the FDA accepted our investigational new drug application,

or IND, to initiate a Phase III registration trial of MicroPine (the CHAPERONE study) to reduce the progression of myopia in children.

We enrolled the first patient in the CHAPERONE study in June 2019.

Due to the COVID-19 pandemic, we previously experienced

delays in trial enrollment and initiation as a result of reduced clinical trial activities and operations at investigator sites.

However, we have since been able to resume enrollment in the CHAPERONE study.

On October 9, 2020, we

entered into the Bausch License Agreement, pursuant to which Bausch Health may develop and commercialize MicroPine in the United States

Under the terms of the Bausch License Agreement, we received an upfront payment of $10.0 million and we may receive up to

a total of $35.0 million in additional payments, based on the achievement of certain regulatory and launch-based milestones.

Bausch Health

also will pay us royalties on a tiered basis (ranging from mid-single digit to mid-teen percentages) on gross profits from sales of MicroPine

in the United States and Canada, subject to certain adjustments.

Under the terms of the Bausch License Agreement, Bausch Health has assumed

oversight and costs related to the ongoing CHAPERONE study.

MicroLine is our pharmacologic treatment

for presbyopia.

Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye’s

ability to focus on nearby objects.

There currently are no known FDA-approved drugs for the improvement of near vision in patients

with presbyopia, although other companies have related therapies in their pipeline.

We have two planned Phase III VISION trials

for MicroLine, and initiated the first of these trials in December 2020.

On August 10, 2020, we entered into

the Arctic Vision License Agreement, pursuant to which Arctic Vision may develop and commercialize MicroPine and MicroLine in Greater

China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, we

received an upfront payment of $4.0 million before any payments to Senju.

In addition, we 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

approvals in Greater China and South Korea, and development costs.

Arctic Vision also will purchase its supply of MicroPine and

MicroLine from us or, for such products not supplied by us, pay us a mid-single digit percentage royalty on net sales of such products,

subject to certain adjustments.

We 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.

MicroStat (or Mydcombi™)

is our fixed combination formulation of phenylephrine-tropicamide for mydriasis, designed to be a novel approach for the estimated 80

million office-based comprehensive eye exams performed every year in the United States.

We have completed two Phase III trials for MicroStat

and announced positive results from these studies, known as MIST-1 and MIST-2.

In March 2021, the FDA accepted our NDA for MydCombi

with an expected PDUFA date of October 28, 2021.

Historically, we have financed

our operations principally through equity offerings, including our initial public offering, numerous public offerings in 2018, 2019 and

August 2020, and our private placement that closed in March 2020.

Recently we also have generated cash through licensing arrangements.

Based upon our current operating plan, there is substantial doubt about our ability to continue as a going

concern for a period of at least the next twelve months.

Our ability to continue as a going concern depends on our ability to raise additional

capital, through the sale of equity or debt securities to support our future operations.

If we are unable to secure additional capital,

we may be required to curtail our research and development initiatives and take additional measures to reduce costs.

Our net losses were $19.8 million and $21.2

million for the years ended December 31, 2020 and 2019.

As of December 31, 2020, we had working capital and an accumulated

deficit of $15.2 million and $77.4 million, respectively.

Financial Overview

Revenue and Cost of Revenue

In August and

October 2020, we entered into the Arctic Vision License Agreement and Bausch License Agreement, respectively.

Both of these

agreements provide for the Company to earn revenue from an upfront licensing fee, the achievement of various development and regulatory

milestones, and royalty income on sales of licensed products.

Pursuant to the Senju License agreement, we will pay a mid-double

digit percentage of such payments from the Arctic Vision License Agreement to Senju.

See Note 9 –

Commitments and Contingencies

and Note 10 –

Related Party Transactions.

Research and Development Expenses

Research and development

expenses are incurred in connection with the research and development of our microdose therapeutics and consist primarily of contract

service expenses.

Given where we are in our life cycle, we do not separately track research and development expenses by project.

Our research and development expenses consist of:

direct clinical and non-clinical expenses, which include expenses incurred under agreements with contract research organizations, contract manufacturing organizations, and costs associated with preclinical activities, development activities and regulatory activities;

personnel-related expenses, which include expenses related to consulting agreements with individuals that have since entered into employment agreements with us as well as salaries and other compensation of employees that is attributable to research and development activities;

facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, marketing, insurance and other supplies used in research and development activities.

We expense research

and development costs as incurred.

We record costs for some development activities, such as clinical trials, based on an evaluation

of the progress to completion of specific tasks using data such as subject enrollment, clinical site activations or other information

our vendors provide to us.

We expect that our

research and development expenses will increase with the continuation of the aforementioned initiatives.

General and Administrative Expenses

General and administrative

expenses consist primarily of payroll and related expenses, legal and other professional services, and non-cash stock-based compensation

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to

support our continued research and development and the potential commercialization of our product candidates.

We also anticipate

increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with our

exchange listing and SEC requirements.

In addition, director and officer insurance premiums and investor relations costs associated

with being a public company are expected to increase in future periods.

Results of Operations

Year Ended December 31, 2020

Compared with Year Ended December 31, 2019

Revenue and Cost of Revenue

In August 2020, we

received a $4.0 million upfront payment under the Arctic Vision License Agreement, and made a related payment of $1.6 million to

This upfront payment has not yet met the revenue recognition criteria under U.S.

GAAP, and has been recorded as $4.0 million

of deferred license fee and $1.6 million of deferred cost of revenue.

In October 2020, we received a $10.0 million upfront

payment under the Bausch Health License Agreement.

This upfront payment has also not yet met the revenue recognition criteria under

GAAP and has been recorded as $10.0 million of deferred license fee.

In December 2020, in connection with the achievement of

a milestone under the Arctic Vision License Agreement, we recognized $2.0 million of revenue, and accrued $0.8 million of cost of

revenue (due to Senju).

Research and Development Expenses

Research and development

expenses for the year ended December 31, 2020 totaled $13.3 million, a decrease of $0.8 million, or 6%, as compared

to $14.1 million recorded for the year ended December 31, 2019.

Research and development expenses consisted of the following:

For the Year Ended

Direct clinical and non-clinical expenses

Personnel-related expenses

Supplies and materials

Non-cash stock-based compensation expenses

Total research and development expenses

The decrease in direct

clinical and non-clinical expenses is primarily due to cost reimbursements from Arctic Vision and Bausch Health (contra expense)

and reduced activity due to COVID-19 austerity measures.

The increase in personnel-related expenses is primarily due to new hires

in the R&D group.

The decrease in supplies and materials is primarily due to COVID-19 austerity measures.

The decrease in stock-based

compensation expense is primarily due to the timing of vesting of certain equity awards.

The increase in other expense reflects

the depreciation of additional equipment purchased for clinical trials.

General and Administrative Expenses

General and administrative

expenses for the year ended December 31, 2020 totaled $7.7 million, an increase of $0.5 million, or 7%, as compared to

$7.2 million recorded for the year ended December 31, 2019.

The increase was primarily attributable to increases of $0.2 million

in payroll related expenses due to new hires, $0.4 million in patent expense, and $0.8 million in legal costs related to business development

This was offset by decreases of $0.4 million in travel expense and $0.2 million in meetings primarily due to COVID-19 austerity

measures, as well as decreases of $0.1 million in filing fees and $0.1 million in consulting fees.

Liquidity and Going Concern

Since inception, we

have experienced negative cash flows from operations.

At December 31, 2020, our accumulated deficit since inception was $77.4 million.

At December 31, 2020, we had a cash and cash equivalents balance of $28.4 million, working capital of $15.2 million and stockholders’

equity of $15.3 million.

At December 31,

2020, we had $0.5 million of debt outstanding.

On May 8, 2020, we 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.

These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date that the

financial statements included elsewhere in this Annual Report on Form 10-K are issued.

Our financial statements do not include adjustments

to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities

to support our future operations.

Our operating needs include the planned costs to operate our business, including amounts required to

fund research and development activities including clinical studies, working capital and capital expenditures.

Our future capital requirements

and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our 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 our product and service offerings.

If we are unable to secure additional capital,

we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve

During the year ended

December 31, 2020 and 2019, our sources and uses of cash were as follows:

Net cash used in operating

activities for the year ended December 31, 2020 was $6.4 million, which includes cash used to fund a net loss of $19.8 million,

reduced by $2.6 million of non-cash expenses, offset by $10.8 million of net cash provided by changes in the levels of operating

assets and liabilities.

Net cash used in operating activities for the year ended December 31, 2019 was $18.9 million,

which includes cash used to fund a net loss of $21.2 million, reduced by $2.5 million of non-cash expenses and $0.3 million

of net cash used in changes in the levels of operating assets and liabilities.

Net cash used in investing

activities was $0.3 million and $0.2 million for the years ended December 31, 2020 and 2019, respectively, which was

attributable to purchases of property and equipment.

Net cash provided by

financing activities for the year ended December 31, 2020 totaled $20.9 million, which was primarily attributable to

$12.4 million of net proceeds from the sale of common stock in our August 2020 public offering, $5.6 million of net proceeds

from the sale of common stock and warrants in our March 2020 private placement, $2.9 million of proceeds from the exercise

of warrants issued in our March 2020 private placement and options and $0.5 million from the proceeds of the PPP Loan, offset

by $0.5 million from the repayment of notes payable.

Net cash provided by financing activities for the year ended December 31,

2019 totaled $13.5 million, which was primarily attributable to $13.0 million of net proceeds from the sale of common stock

in our July 2019 public offering and $0.6 million of proceeds from the exercise of stock options.

Risks and Uncertainties

Due to the COVID-19 pandemic,

we previously experienced delays in trial enrollment and initiation of our Phase III registration trial of our MicroPine drug candidate

(the CHAPERONE study) as a result of reduced clinical trial activities and operations at investigator sites.

However, we have since been

able to resume enrollment in that study.

Off-Balance Sheet Arrangements

There are no off-balance

sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial

conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital

resources that is material to stockholders.

Critical Accounting Policies

Our critical accounting

policies are included in Note 2 –

Summary of Significant Accounting Policies of our financial statements included within

this Annual Report on Form 10-K.

Recently Issued Accounting Standards

Our recently issued

accounting standards are included in Note 2 –

Summary of Significant Accounting Policies of our financial statements included

within this Annual Report on Form 10-K.

Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies

such as us are not required to provide the information required by this Item.

Financial Statements and Supplementary Data.

See the financial statements

included at the end of this report beginning on page F-1.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

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-K

Item 5. Market for Registrant’s Common Equity