What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-11 compared with 2023-05-12 · 74 added, 40 removed, 121 unchanged (49% of the section changed)

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The following discussion and analysis of the results of operations and financial condition of Eyenovia, Inc.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (the“SEC”) on March 31, 2023, as amended by Amendment No.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023.

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1, as filed with the SEC on May 1, 2023, and the risks discussed in our other SEC filings.

Furthermore, such forward-looking statements speak only as of the date of this Quaterly Report on Form 10-Q.

Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.

Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Recent Development - FDA Approval of Mydcombi™

We received notification from the FDA on May 5, 2023 that its NDA for the Mydcombi™ product was approved.

FDA Approval of Mydcombi™

We received notification from the FDA on May 5, 2023 that our NDA for the Mydcombi™ product was approved.

It is the only FDA-approved fixed combination of the two leading mydriatic agents in the United States.

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Those benefits may include better tolerability, more efficient use of office time and resources, and an overall improved doctor-patient experience.

The Company is preparing to commercialize the product starting with a targeted launch and expanding in 2024 when internal manufacturing capabilities are expected to come on-line.

We have begun the commercialization of Mydcombi, with the first commercial sale of the product on August 3, 2023 as part of a targeted launch, and are continuing to expand the manufacturing process in preparation for a broader launch in 2024, when internal manufacturing capabilities are expected to come on-line.

We are an ophthalmic technology company developing the Optejet® delivery system for use both in combination with our own drug-device therapeutic programs as well as out-licensing for additional indications.

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The ergonomic and functional design of the Optejet® allows for horizontal drug delivery and eliminates the need to tilt the head back or the manual dexterity to squeeze a bottle, to administer medications.

Drug is delivered in a microscopic array of droplets

faster than the blink reflex to help ensure instillation success.

Drug is delivered in a microscopic array of droplets faster than the blink reflex to help ensure instillation success.

The precise delivery of a low-volume columnar spray by the Optejet® device minimizes contamination with a non-protruding nozzle and self-closing shutter.

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Those benefits may include better tolerability, more efficient use of office time and resources, and an overall improved doctor-patient experience.

As noted above in Recent Development, we received FDA approval on May 5, 2023, and are preparing to commercialize the product starting with a targeted launch and expanding in 2024 when we expect our internal manufacturing capabilities to come on-line.

As noted above in “FDA Approval of Mydcombi”, we received FDA approval on May 5, 2023, and are preparing to commercialize the product starting with a targeted launch and expanding in 2024 when we expect our internal manufacturing capabilities to come on-line.

On August 10, 2020, we entered into the Arctic Vision License Agreement with Arctic Vision, which was amended on September 14, 2021, pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, as amended, we received an upfront payment of $4.25 million before any payments to Senju Pharmaceutical Co., Ltd.

In addition, we may receive up to a total of $39.7 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.

In addition, we may receive up to a total of $39.7 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, MicroLine and Mydcombi from Eyenovia or, for such products not supplied by Eyenovia, pay a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments.

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If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and/or take additional measures to reduce costs.

Our net losses were $5.7 million and $7.3 million for the three months ended March 31, 2023 and 2022.

As of March 31, 2023, we had working capital and an accumulated deficit of approximately $20.0 million and $124.0 million, respectively.

Our net losses were $6.2 million and $12.0 million for the three and six months ended June 30, 2023.

As of June 30, 2023, we had working capital and an accumulated deficit of $19.2 million and $130.2 million, respectively.

Financial Overview

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.

Research and development expenses are incurred in connection with the research and development of our microdose-therapeutics and consist primarily of personnel-related expenses.

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

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Results of Operations

Three Months Ended March 31, 2023 Compared with Three Months Ended March 31, 2022

Three Months Ended June 30, 2023 Compared with Three Months Ended June 30, 2022

Research and Development Expenses

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Personnel-related expenses

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Total research and development expenses

Research and development expenses for the three months ended March 31, 2023 totaled approximately $2.5 million, a decrease of $1.2 million, or 32.1%, as compared to $3.7 million recorded for the three months ended March 31, 2022.

The decrease in direct clinical and non-clinical expenses primarily resulted from the sharp decrease in clinical study expenses based on the VISION 2 Study being concluded in 2022.

The decrease in non-cash stock-based compensation expenses primarily resulted from a change in the allocation percentages of a grant from research and development to general and administrative expense.

The decrease in costs related to supplies and materials primarily resulted from the decline in clinical activity and the increase in deferred clinical supplies was due to greater demand from Arctic Vision and B+L for those supplies.

Research and development expenses for the three months ended June 30, 2023 totaled $2.8 million, a decrease of $0.8 million, or 22%, as compared to $3.6 million recorded for the three months ended June 30, 2022.

The increase in personnel-related expenses was primarily due to salary increases and new staff additions made throughout 2022, primarily related to the anticipated Mydcombi launch.

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 Study being concluded in 2022.

The decrease in non-cash stock-based compensation expenses was primarily due to the change in the allocation percentages of a grant from research and development expenses to general and administrative expenses and adjustments for forfeitures and expirations resulting from the review of outstanding options.

General and Administrative Expenses

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Salaries and benefits

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Director fees and expense

General and administrative expense for the three months ended March 31, 2023 totaled $2.9 million, a decrease of $0.5 million, or 15.5%, as compared to $3.5 million recorded for the three months ended March 31, 2022.

The decrease was primarily attributable to legal and professional recruiting expenses associated with the addition of new directors in 2022 that were not recurring during this quarter.

The increase in non-cash stock-based compensation expenses primarily resulted from a change in the allocation percentages of a grant from research and development to general and administrative expense.

Liquidity and Capital Resources;

Going Concern

General and administrative expenses for the three months ended June 30, 2023 totaled $3.1 million, a decrease of $0.4 million, or 11%, as compared to $3.5 million recorded for the three months ended June 30, 2022.

The decrease was primarily attributable to a sharp decrease in professional fees which resulted from legal and recruiting expenses associated with the addition of new directors in 2022 that were not incurred in the first half of 2023.

The decrease in sales and marketing expenses primarily resulted from the decrease in promotional expenses.

Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022

Research and Development Expenses

For the Six Months Ended June 30,

Personnel-related expenses

Direct clinical and non-clinical expenses

Non-cash stock-based compensation expenses

Facilities expenses

Supplies and materials

Other expenses

Total research and development expenses

Research and development expenses for the six months ended June 30, 2023 totaled $5.3 million, a decrease of $2.0 million, or 27%, as compared to $7.3 million recorded for the six months ended June 30, 2022.

The increase in personnel-related expenses was primarily due to salary increases and costs related to staff additions made throughout 2022 mainly related to the ramp up for the Mydcombi launch.

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 Study being concluded in 2022.

The decrease in supplies and materials expenses resulted from the increase in the cost reimbursements for the clinical supplies that were supplied to our clinical partners (Arctic Vision and B+L).

General and Administrative Expenses

For the Six Months Ended June 30,

Salaries and benefits

Professional fees

Stock-based compensation

Insurance expense

Sales and marketing

Facilities expense

Director fees and expense

General and administrative expenses for the six months ended June 30, 2023 totaled $6.1 million, a decrease of $0.9 million, or 13%, as compared to $7.0 million recorded for the six months ended June 30, 2022.

The decrease in sales and marketing expense primarily resulted from the decrease in promotional expenses.

Liquidity and Capital Resources and Going Concern

We measure our liquidity in a number of ways, including the following:

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Since inception, we have experienced negative cash flows from operations.

As of March 31, 2023, our accumulated deficit since inception was $124.0 million.

As of March 31, 2023, we had a cash and cash equivalents balance of $18.5 million, working capital of $20.0 million and stockholders’ equity of $15.8 million.

As of March 31, 2023 and December 31, 2022, we had $10.9 million and $10.4 million, respectively, of debt outstanding.

As of June 30, 2023, our accumulated deficit since inception was $130.2 million.

As of June 30, 2023, we had a cash and cash equivalents balance of $17.5 million, working capital of $19.2 million and stockholders’ equity of $10.5 million.

As of June 30, 2023 and December 31, 2022, we had $15.8 million and $10.4 million, respectively, of debt outstanding.

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 Quarterly Report on Form 10-Q are issued.

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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 our cash.

During the three months ended March 31, 2023 and 2022, our sources and uses of cash were as follows:

Net cash used in operating activities for the three months ended March 31, 2023 was $7.0 million, which includes cash used to fund a net loss of $5.7 million, reduced by $1.2 million of non-cash expenses, and $2.4 million of cash used to fund changes in the balances of operating assets and liabilities.

Net cash used in operating activities for the three months ended March 31, 2022 was $8.2 million, which includes cash used to fund a net loss of $7.3 million, reduced by $1.1 million of non-cash expenses, and $1.9 million of cash to fund changes in the balances of operating assets and liabilities.

Cash used in investing activities for the three months ended March 31, 2023 was $0.8 million, which was related to vendor deposits, leasehold improvement expenditures for new leases and the purchase of property and equipment.

Cash used in investing activities for the three months ended March 31, 2022 was $0.2 million, which was related to vendor deposits, leasehold improvement expenditures and the purchase of property and equipment.

Net cash provided by financing activities for the three months ended March 31, 2023 totaled $3.4 million, which was attributable to aggregate proceeds received pursuant to the Sales Agreement with SVB Securities in an “at-the-market” offering.

Net cash provided by financing activities for the three months ended March 31, 2022 totaled $15.6 million, which was primarily attributable to aggregate proceeds received from our “at-the-market” offering facility and our March 2022 offering, in which we sold (i) 3,000,000 shares of common stock, (ii) pre-funded warrants to purchase an aggregate of 1,870,130 shares of common stock and (iii) warrants to purchase an aggregate of 4,870,130 shares of common stock.

The aggregate gross proceeds to us from the March 2022 offering were approximately $15 million, excluding the proceeds, if any, from the exercise of the warrants.

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 general and administrative and sales and marketing costs in order to conserve our cash.

During the six months ended June 30, 2023 and 2022, our sources and uses of cash were as follows:

Net cash used in operating activities for the six months ended June 30, 2023 was $11.7 million, which includes cash used to fund a net loss of $12.0 million, reduced by $2.1 million of non-cash expenses, plus $1.8 million of cash used to fund changes in operating assets and liabilities.

Net cash used in operating activities for the six months ended June 30, 2022 was $12.9 million, which includes cash used to fund a net loss of $14.6 million, reduced by $2.1 million of non-cash expenses, plus $0.4 million of cash used to fund changes in operating assets and liabilities.

Cash used in investing activities for the six months ended June 30, 2023 was $2.1 million, which was related to purchases of property and equipment.

Cash used in investing activities for the six months ended June 30, 2022 was $0.4 million, which was related to purchases of and vendor deposits for property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2023 totaled $8.4 million, which was attributable to $4.0 million of gross proceeds received from sales under our At-the-Market Offering Program and $5.0 million of gross proceeds from the additional tranche under the Loan and Security Agreement.

This was slightly offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan, $0.1 million of the At-the-Market offering issuance costs relating to our At-the-Market Offering Program and $0.1 million of issuance costs related to the additional tranche under the Loan and Security Agreement.

Net cash provided by financing activities for the six months ended June 30, 2022 totaled $15.3 million, which was attributable to $15.9 million of gross proceeds received from the March 2022 Offering (as defined in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023) and the At-the-Market Offering Program.

This was slightly offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan and the $0.1 million payment of issuance costs related to the March 2022 Offering.

Contractual Obligations and Commitments

During the next twelve months we have commitments to pay:

(a) $2.5 million to settle our March 31, 2023 accounts payable, accrued expenses and other current liabilities;

(a) $2.7 million to settle our June 30, 2023 accounts payable, accrued compensation, and accrued expenses and other current liabilities;

(b) $0.4 million relating to our non-cancelable operating lease commitments;

and (c) $2.2 million of payments due under our notes payable.

and (c) $1.0 million of potential payments due under our notes payable.

In addition, we would be required to pay an aggregate of $1.5 million of executive severance pay under the provisions of the Executive Employment Agreements with three executive officers, in the event that their respective employment with us were to be terminated without cause or if there is an involuntary termination (as defined in the agreement).

After twelve months we have commitments to pay an additional $1.6 million relating to our non-cancelable operating lease commitments and notes payable in the amount of $14.8 million.

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1, as filed with the SEC on May 1, 2023.

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

Changes in estimates are reflected in reported results for the period in which they become known.

Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023.

Recently Adopted Accounting Standards

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Quantitative and Qualitative Disclosures About Market Risk.

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

Smaller reporting companies such as Eyenovia are not required to provide the information required by this Item.

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 2. Management’s Discussion and Analysis