HYPERION DEFI, INC. 10-Q

Item 1. Financial Statements. EYENOVIA, INC. Condensed Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ 2023 2022 ​ (unaudited) ​ ​ ​ Assets ​ ​ ​ ​ ​ Current Assets ​ ​ Cash and cash equivalents ​ $ 17,468,088 ​ $ 22,863,520 Deferred clinical supply costs ​ ​ 3,578,326 ​ ​ 2,284,931 License fee and expense reimbursements receivable ​ ​ 429,006 ​ ​ 1,183,786 Security deposits, current ​ ​ — ​ ​ 119,550 Prepaid expenses and other current assets ​ 1,801,373 ​ 1,190,719 Total Current Assets ​ 23,276,793 ​ 27,642,506 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 3,698,421 ​ 1,295,115 Security deposits, non-current ​ 198,674 ​ 80,874 Operating lease right-of-use asset ​ ​ 1,915,061 ​ ​ 1,291,592 Equipment deposits ​ 257,950 ​ 726,326 Total Assets ​ $ 29,346,899 ​ $ 31,036,413 ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ Accounts payable ​ $ 1,312,749 ​ $ 1,428,283 Accrued compensation ​ 1,013,118 ​ 1,747,191 Accrued expenses and other current liabilities ​ 363,431 ​ 503,076 Operating lease liabilities - current portion ​ ​ 427,749 ​ ​ 484,882 Notes payable - current portion, net of debt discount of $ 91,621 and $ 33,885 as of June 30, 2023 and December 31, 2022, respectively ​ ​ 947,163 ​ ​ 174,448 Convertible notes payable - current portion, net of dedt discount of $ 0 and $ 33,885 as of June 30, 2023 and December 31, 2022, respectively ​ ​ — ​ ​ 174,448 Total Current Liabilities ​ ​ 4,064,210 ​ ​ 4,512,328 ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities - non-current portion ​ ​ 1,584,218 ​ ​ 907,644 Notes payable - non-current portion, net of debt discount of $ 1,120,372 and $ 813,229 as of June 30, 2023 and December 31, 2022, respectively ​ ​ 8,683,794 ​ ​ 4,190,938 Convertible notes payable - non-current portion, net of debt discount of $ 507,270 and $ 813,229 as of June 30, 2023 and December 31, 2022, respectively ​ 4,492,730 ​ 4,190,938 Total Liabilities ​ ​ 18,824,952 ​ ​ 13,801,848 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 7) ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ Preferred stock, $ 0.0001 par value, 6,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022 ​ — ​ — Common stock, $ 0.0001 par value, 90,000,000 shares authorized; 38,169,398 and 36,668,980 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively ​ 3,817 ​ 3,667 Additional paid-in capital ​ 140,703,819 ​ 135,461,361 Accumulated deficit ​ ( 130,185,689 ) ​ ( 118,230,463 ) Total Stockholders’ Equity ​ ​ 10,521,947 ​ ​ 17,234,565 Total Liabilities and Stockholders’ Equity ​ $ 29,346,899 ​ $ 31,036,413 ​ The accompanying notes are an integral part of these condensed financial statements. ​ 2 Table of Contents EYENOVIA, INC. Condensed Statements of Operations (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Six Months Ended ​ ​ June 30, ​ June 30, ​ 2023 2022 2023 2022 Operating Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 2,811,061 ​ $ 3,586,866 ​ $ 5,333,011 ​ $ 7,299,450 General and administrative ​ 3,149,809 ​ 3,534,590 ​ ​ 6,086,695 ​ ​ 7,009,555 Total Operating Expenses ​ 5,960,870 ​ 7,121,456 ​ ​ 11,419,706 ​ ​ 14,309,005 Loss From Operations ​ ( 5,960,870 ) ​ ( 7,121,456 ) ​ ​ ( 11,419,706 ) ​ ​ ( 14,309,005 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Income (Expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income, net ​ ​ 119,450 ​ ​ 33,376 ​ ​ 190,443 ​ ​ 26,303 Interest expense ​ ​ ( 558,003 ) ​ ( 153,436 ) ​ ​ ( 1,012,006 ) ​ ​ ( 298,673 ) Interest income ​ 183,563 ​ 2,416 ​ ​ 286,043 ​ ​ 2,610 Net Loss ​ $ ( 6,215,860 ) ​ $ ( 7,239,100 ) ​ $ ( 11,955,226 ) ​ $ ( 14,578,765 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss Per Share - Basic and Diluted ​ $ ( 0.16 ) ​ $ ( 0.22 ) ​ $ ( 0.32 ) ​ $ ( 0.46 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Number of Common Shares Outstanding - Basic and Diluted ​ 38,093,826 ​ 33,644,867 ​ ​ 37,753,694 ​ ​ 31,836,582 ​ The accompanying notes are an integral part of these condensed financial statements. ​ 3 Table of Contents EYENOVIA, INC. Condensed Statements of Changes in Stockholders’ Equity (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three and Six Months Ended June 30, 2023 ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-In ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Deficit Equity Balance - January 1, 2023 36,668,980 ​ $ 3,667 ​ $ 135,461,361 ​ $ ( 118,230,463 ) ​ $ 17,234,565 Issuance of common stock in At the Market offering [1] 1,299,947 ​ 130 ​ 3,499,462 ​ — ​ 3,499,592 Cashless exercise of stock options 19,530 ​ 2 ​ ( 2 ) ​ — ​ — Stock-based compensation — ​ — ​ 819,064 ​ — ​ 819,064 Issuance of common stock related to vested restricted stock units 3,289 ​ — ​ — ​ — ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 5,739,366 ) ​ ​ ( 5,739,366 ) Balance - March 31, 2023 ​ 37,991,746 ​ $ 3,799 ​ $ 139,779,885 ​ $ ( 123,969,829 ) ​ $ 15,813,855 Issuance of common stock in At the Market offering [2] ​ 121,989 ​ ​ 13 ​ ​ 403,107 ​ ​ — ​ ​ 403,120 Cashless exercise of stock options ​ 1,219 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercise of stock options ​ 10,000 ​ ​ 1 ​ ​ 27,199 ​ ​ — ​ ​ 27,200 Stock-based compensation ​ — ​ ​ — ​ ​ 493,632 ​ ​ — ​ ​ 493,632 Issuance of common stock related to vested restricted stock units ​ 44,444 ​ ​ 4 ​ ​ ( 4 ) ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 6,215,860 ) ​ ​ ( 6,215,860 ) Balance - June 30, 2023 ​ 38,169,398 ​ $ 3,817 ​ $ 140,703,819 ​ $ ( 130,185,689 ) ​ $ 10,521,947 [1] Includes gross proceeds of $ 3,607,827 less total issuance costs of $ 108,235 . [2] Includes gross proceeds of $ 415,588 less total issuance costs of $ 12,468 . ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three and Six Months Ended June 30, 2022 ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-In ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Deficit Equity Balance - January 1, 2022 ​ 28,426,616 ​ $ 2,844 ​ $ 110,683,077 ​ $ ( 90,219,306 ) ​ $ 20,466,615 Issuance of common stock and warrants in registered direct offering [1] ​ 3,000,000 ​ ​ 300 ​ ​ 14,897,608 ​ ​ — ​ ​ 14,897,908 Issuance of common stock in At the Market offering [2] ​ 252,449 ​ ​ 25 ​ ​ 860,340 ​ ​ — ​ ​ 860,365 Stock-based compensation ​ — ​ ​ — ​ ​ 908,987 ​ ​ — ​ ​ 908,987 Issuance of common stock related to vested restricted stock units ​ 19,359 ​ ​ 2 ​ ​ ( 2 ) ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 7,339,665 ) ​ ​ ( 7,339,665 ) Balance -March 31, 2022 ​ 31,698,424 ​ $ 3,171 ​ $ 127,350,010 ​ $ ( 97,558,971 ) ​ $ 29,794,210 Exercise of stock warrants ​ 1,870,130 ​ ​ 187 ​ ​ 18,514 ​ ​ — ​ ​ 18,701 Stock-based compensation ​ — ​ ​ — ​ ​ 1,036,926 ​ ​ — ​ ​ 1,036,926 Issuance of common stock related to vested restricted stock units ​ 54,499 ​ ​ 5 ​ ​ ( 5 ) ​ ​ — ​ ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 7,239,100 ) ​ ​ ( 7,239,100 ) Balance - June 30, 2022 ​ 33,623,053 ​ $ 3,363 ​ $ 128,405,445 ​ $ ( 104,798,071 ) ​ $ 23,610,737 [1] Includes gross proceeds of $ 14,981,299 less total issuance costs of $ 83,391 . [2] Includes gross proceeds of $ 886,974 , less total issuance costs of $ 26,609 . ​ The accompanying notes are an integral part of these condensed financial statements. ​ 4 Table of Contents EYENOVIA, INC. Condensed Statements of Cash Flows (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, ​ 2023 2022 Cash Flows From Operating Activities ​ ​ Net loss ​ $ ( 11,955,226 ) ​ $ ( 14,578,765 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Stock-based compensation ​ ​ 1,312,696 ​ ​ 1,945,913 Depreciation of property and equipment ​ 187,267 ​ 145,901 Amortization of debt discount ​ ​ 313,446 ​ ​ 52,431 Non-cash rent expense ​ ​ 280,968 ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other current assets ​ ( 1,514 ) ​ ( 461,761 ) License fee and expense reimbursements receivables ​ 754,780 ​ 1,095,831 Deferred clinical supply costs ​ ​ ( 1,293,395 ) ​ ​ ( 1,538,380 ) Security and equipment deposits ​ ​ 1,750 ​ ​ ( 68,868 ) Accounts payable ​ ​ ( 115,534 ) ​ ​ 1,072,690 Accrued compensation ​ ​ ( 734,073 ) ​ ​ ( 529,534 ) Accrued expenses and other current liabilities ​ ​ ( 139,645 ) ​ ​ ( 21,417 ) Lease liabilities ​ ( 284,996 ) ​ 2,356 Net Cash Used In Operating Activities ​ ( 11,673,476 ) ​ ( 12,883,603 ) ​ ​ ​ ​ ​ Cash Flows From Investing Activities ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ​ ( 2,122,197 ) ​ ​ ( 281,342 ) Vendor deposits for property and equipment ​ ​ — ​ ​ ( 118,298 ) Net Cash Used In Investing Activities ​ ​ ( 2,122,197 ) ​ ​ ( 399,640 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities ​ ​ ​ ​ Proceeds from sale of common stock and warrants in direct offering [1] ​ — ​ 14,981,299 Payment of offering issuance costs ​ ​ — ​ ​ ( 83,391 ) Proceeds from sale of common stock in At the Market offering ​ ​ 4,023,414 ​ ​ 886,974 Payment of issuance costs for At the Market offering ​ ​ ( 120,702 ) ​ ​ ( 26,609 ) Proceeds from exercise of stock options ​ ​ 27,200 ​ ​ 18,701 Proceeds from note payable to Avenue ​ ​ 5,000,000 ​ ​ — Payment of issuance costs for notes issued to Avenue ​ ​ ( 125,982 ) ​ ​ — Repayments of notes payable ​ ​ ( 403,689 ) ​ ​ ( 448,999 ) Net Cash Provided By Financing Activities ​ 8,400,241 ​ 15,327,975 Net (Decrease) Increase in Cash and Cash Equivalents ​ ( 5,395,432 ) ​ 2,044,732 Cash, cash equivalents and restricted cash - Beginning of Period ​ 22,863,520 ​ 27,336,850 Cash, cash equivalents and restricted cash - End of Period ​ $ 17,468,088 ​ $ 29,381,582 ​ ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash consisted of the following: ​ ​ ​ ​ Cash and cash equivalents ​ $ 17,468,088 ​ $ 21,506,582 Restricted cash ​ ​ — ​ ​ 7,875,000 ​ ​ $ 17,468,088 ​ $ 29,381,582 Supplemental Disclosure of Cash Flow Information: ​ ​ ​ ​ Cash paid during the year for: ​ ​ ​ ​ ​ ​ Interest ​ $ 699,116 ​ $ 199,367 ​ ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Non-Cash Investing and Financing Activities ​ ​ ​ ​ ​ ​ Purchase of insurance policy financed by note payable ​ $ 609,140 ​ $ 675,331 Right-of-use assets and lease liabilities recognized upon lease renewal ​ $ 904,437 ​ $ — Vendor deposits applied to purchases of property and equipment ​ $ 468,376 ​ $ — Original issue discount on notes payable ​ $ 212,500 ​ $ — Cashless exercise of stock options ​ $ 2 ​ $ — Issuance of common stock related to vested restricted stock units ​ $ 4 ​ $ 7 [1] Includes gross proceeds of $ 14,981,299 , of which $ 5,741,299 is pre-funded warrants. ​ The accompanying notes are an integral part of these condensed financial statements. ​ ​ 5 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Note 1 – Business Organization, Nature of Operations and Basis of Presentation Eyenovia, Inc. (“Eyenovia” or the “Company”) is an ophthalmic technology company developing the Optejet® delivery system for use both in combination with its own drug-device therapeutic programs in mydriasis (pupil dilation), presbyopia and pediatric progressive myopia as well as out-licensing for additional indications. The Company’s investigational products are classified by the Food and Drug Administration (“FDA”) as drug-device combination products with drug primary mode of action, meaning that the Center for Drug Evaluation and Research, or CDER, is designated as the lead center with primary jurisdictional oversight. Accordingly, the product candidates are submitted to the FDA and CDER for premarket review and approval under new drug applications, or NDAs. The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. 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, 2023 and for the three and six months ended June 30, 2023 and 2022. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the operating results for the full year ending December 31, 2023 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, 2022 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 31, 2023, as amended by Amendment No. 1, filed with the SEC on May 1, 2023. ​ Note 2 – Going Concern and Summary of Significant Accounting Policies Since the date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, there have been no material changes to the Company’s significant accounting policies, except as disclosed below. Going Concern As of June 30, 2023, the Company had cash and cash equivalents in the aggregate amount of approximately $ 17.5 million. For the six months ended June 30, 2023 and 2022, the Company incurred net losses of approximately $ 12.0 million and $ 14.6 million, respectively, and used cash in operations of approximately $ 11.7 million and $ 12.9 million, respectively. The Company does not have recurring revenue, has not yet achieved profitability and may never become profitable. The Company expects to continue to incur cash outflows from operations. Research and development and general and administrative expenses will continue to be incurred by the Company and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability. 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 licensing transactions, 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/or take additional measures to reduce general and administrative and sales and marketing costs in order to conserve its cash. Reclassifications Certain prior period amounts presented on the Company’s financial statements have been reclassified in order to conform to current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share. 6 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents in the financial statements.As of June 30, 2023, the Company had Treasury bills with original maturity dates of three months or less in the amount of $ 4,493,766 . The Company has cash deposits in a financial institution that, 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, 2023 and December 31, 2022, the Company had cash balances in excess of FDIC insurance limits of $ 12,474,323 and $ 22,613,520 , 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. 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 table presents the computation of basic and diluted net loss per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Six Months Ended ​ ​ June 30, ​ June 30, ​ 2023 2022 2023 2022 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common stockholders ​ $ ( 6,215,860 ) ​ $ ( 7,239,100 ) ​ $ ( 11,955,226 ) ​ $ ( 14,578,765 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator (weighted average quantities): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common shares issued ​ 38,064,215 ​ 31,669,431 ​ ​ 37,724,083 ​ ​ 31,089,811 Add: Prefunded warrants ​ — ​ 1,870,130 ​ ​ — ​ ​ 671,594 Add: Undelivered vested restricted shares ​ 29,611 ​ 105,306 ​ ​ 29,611 ​ ​ 75,177 Denominator for basic and diluted net loss per share ​ 38,093,826 ​ 33,644,867 ​ ​ 37,753,694 ​ ​ 31,836,582 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted net loss per common share ​ $ ( 0.16 ) ​ $ ( 0.22 ) ​ $ ( 0.32 ) ​ $ ( 0.46 ) ​ The following securities are excluded from the calculation of weighted average diluted common shares because their inclusion would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ 2023 2022 Options 5,185,078 4,926,750 Warrants 6,087,845 6,087,845 Convertible notes ​ 2,327,747 ​ — Restricted stock units 86,205 111,110 Total potentially dilutive shares 13,686,875 11,125,705 ​ 7 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Clinical Supply Arrangements Bausch + Lomb, Inc. (“B+L”) and Arctic Vision (Hong Kong) Limited (“Arctic Vision”) have contracted with the Company to manufacture and supply them with the appropriate drug-device combination products to conduct their clinical trials on a cost plus 10 % mark-up basis. The Company’s licensing agreements with Bausch + Lomb and Arctic Vision represent collaborative arrangements and they are not a customer with respect to the clinical supply arrangements. The Company’s policy is to (a) defer the materials and manufacturing costs in order to properly match them up against the income from the clinical supply arrangements; and (b) to report the net income from the clinical supply arrangements as other income. Recently Adopted Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash flows. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20)” and “Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, ASU 2020-06 improves disclosure requirements for convertible instruments and earnings-per-share guidance. ASU 2020-06 also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted ASU 2020-06 effective January 1, 2023 which eliminates the need to assess whether a beneficial conversion feature needs to be recognized upon the issuance of new convertible instruments. The adoption of ASU 2020-06 did not have a material impact on the Company’s financial position, results of operations or cash flows. ​ Note 3 – Prepaid Expenses and Other Current Assets As of June 30, 2023 and December 31, 2022, prepaid expenses and other current assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ 2023 2022 Payroll tax receivable ​ $ 645,566 ​ $ 660,891 Prepaid insurance expenses ​ ​ 600,607 ​ ​ 201,082 Prepaid general and administrative expenses ​ 310,701 ​ ​ 87,982 Prepaid research and development expenses ​ ​ 83,192 ​ ​ 2,521 Prepaid patent expenses ​ ​ 73,157 ​ ​ 38,796 Prepaid conference expenses ​ 69,400 ​ ​ 97,743 Prepaid rent and security deposit ​ ​ 18,750 ​ ​ 74,959 Other ​ ​ — ​ ​ 26,745 Total prepaid expenses and other current assets ​ $ 1,801,373 ​ $ 1,190,719 ​ 8 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Note 4 – Accrued Compensation As of June 30, 2023 and December 31, 2022, accrued compensation consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ 2023 2022 Accrued bonus expenses ​ $ 695,450 ​ $ 1,447,643 Accrued payroll expenses ​ 317,668 ​ 299,548 Total accrued compensation ​ $ 1,013,118 ​ $ 1,747,191 ​ Note 5 – Accrued Expenses and Other Current Liabilities As of June 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ 2023 2022 Accrued consulting and professional services ​ $ 142,915 ​ $ 320,000 Accrued research and development expenses ​ ​ 117,983 ​ ​ 35,524 Accrued leasehold improvements ​ ​ — ​ ​ 92,528 Credit card payable ​ 58,549 ​ 50,639 Accrued franchise tax ​ ​ 26,201 ​ ​ — Accrued travel and entertainment expenses ​ 13,784 ​ — Other ​ ​ 3,999 ​ ​ 4,385 Total accrued expenses and other current liabilities ​ $ 363,431 ​ $ 503,076 ​ Note 6 – Notes Payable As of June 30, 2023 and December 31, 2022, notes payable consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 December 31, 2022 ​ Notes Payable Debt Discount Net Notes Payable Debt Discount Net Current portion: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ D&O insurance policy loan ​ $ 205,451 ​ $ — ​ $ 205,451 ​ $ — ​ $ — ​ $ — Avenue - Note payable ​ ​ 833,333 ​ ​ ( 91,621 ) ​ ​ 741,712 ​ ​ 208,333 ​ ​ ( 33,885 ) ​ ​ 174,448 Avenue - Convertible note payable ​ ​ — ​ ​ — ​ ​ — ​ ​ 208,333 ​ ​ ( 33,885 ) ​ ​ 174,448 Total current portion ​ $ 1,038,784 ​ $ ( 91,621 ) ​ $ 947,163 ​ $ 416,666 ​ $ ( 67,770 ) ​ $ 348,896 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Current portion: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avenue - Note payable ​ ​ 9,804,166 ​ ​ ( 1,120,372 ) ​ ​ 8,683,794 ​ ​ 5,004,167 ​ ​ ( 813,229 ) ​ ​ 4,190,938 Avenue - Convertible note payable ​ ​ 5,000,000 ​ ​ ( 507,270 ) ​ ​ 4,492,730 ​ ​ 5,004,167 ​ ​ ( 813,229 ) ​ ​ 4,190,938 Total non-current portion ​ $ 14,804,166 ​ $ ( 1,627,642 ) ​ $ 13,176,524 ​ $ 10,008,334 ​ $ ( 1,626,458 ) ​ $ 8,381,876 ​ On February 24, 2023, the Company issued a note payable in the amount of $ 609,140 for the purchase of a directors and officers’ liability insurance policy (the “D&O Loan”). The note accrues interest at a rate of 7.11 % per year and matures on August 24, 2023. The D&O Loan is payable in six monthly payments of $ 103,639 consisting of principal and interest. During the six months ended June 30, 2023, the Company repaid $ 403,689 of principal owed on the D&O Loan. 9 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) On May 22, 2023, pursuant to the Company’s Loan and Security Agreement (the “Loan and Security Agreement”) with Avenue Capital Management II, L.P., and related entities (“Avenue”), the Company received an additional tranche of non-convertible debt funding in the gross amount of $ 5,000,000 . The Company paid approximately $ 126,000 of origination and legal fees connected to this debt funding. The additional funding was made under the provisions of the Loan and Security Agreement, bearing interest at an annual rate equal to the greater of (A) 7.0 % and (B) the prime rate as reported in The Wall Street Journal plus 4.45 %. The entire outstanding balance due under the Loan and Security Agreement has a maturity date of November 1, 2025. The additional funding triggered the extension of the interest-only period from the original 12 months to 18 months (through May 2024) for the entire outstanding balance due under the Loan and Security Agreement (initial and additional tranches). Following the interest-only period, the Company will make equal monthly payments of principal until the maturity date, plus interest. During the three months ended June 30, 2023, the Company recorded interest expense of $ 558,003 , of which $ 550,746 was related to the Loan and Security Agreement with Avenue Capital Management II, L.P. (“Avenue”) and related entities, (including amortization of debt discount of $ 163,956 ) and $ 7,257 was related to the D&O Loan. During the six months ended June 30, 2023, the Company recorded interest expense of $ 1,012,006 , of which $ 1,001,140 was related to the Loan and Security Agreement (including amortization of debt discount of $ 313,446 ) and $ 10,866 was related to the D&O Loan. ​ Note 7 – Commitments and Contingencies Operating Leases In June 2023, the Company entered into an extension agreement to renew its lease for approximately 3,800 square feet of office space in New York, NY. The lease was due to expire on October 31, 2023. The lease was extended from November 1, 2023 to December 31, 2026. In February 2023, the Company exercised its options to renew its three leases in Redwood City, California, for a total of approximately 6,700 square feet. The leases were due to expire on August 31, 2023 . The leases were extended from September 1, 2023 to August 31, 2025. A summary of the Company’s right-of-use assets and liabilities as follows: ​ ​ ​ ​ ​ ​ ​ For the Six Months Ended ​ ​ June 30, 2023 ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ Operating cash flows used in operating activities ​ $ 284,996 ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for lease obligations ​ ​ Operating leases ​ $ 904,437 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Remaining Lease Term (Years) ​ ​ Operating leases ​ 3.5 years ​ ​ ​ ​ ​ ​ Weighted Average Discount Rate ​ ​ Operating leases ​ 10.0 % ​ 10 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Future minimum payments under all of the Company’s operating lease agreements are as follows: ​ ​ ​ ​ ​ For the Year Ending December 31, Minimum Lease Payments 2023 ​ $ 445,025 2024 ​ 660,923 2025 ​ 675,400 2026 ​ 560,996 2027 ​ 214,619 Total future minimum lease payments ​ 2,556,963 Less: amount representing imputed interest ​ ( 544,996 ) Present value of lease liabilities ​ 2,011,967 Less: current portion ​ ( 427,749 ) Lease liabilities, non current portion ​ $ 1,584,218 ​ Litigations, Claims and Assessments The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. ​ Note 8 – Stockholders’ Equity Equity Incentive Plan On June 27, 2023, the Company’s stockholders approved an amendment to the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan, reserving an additional 1,000,000 shares of common stock for further issuance under such plan. At-The-Market Offering During the six months ended June 30, 2023, the Company received approximately $ 3.9 million in net proceeds from the sale of 1,421,936 shares of its common stock pursuant to its Sales Agreement with SVB Securities LLC (“SVB Securities”) in an ”at-the-market” offering (the “At-the-Market Offering Program”). Stock-Based Compensation Expense The Company records stock-based compensation expense related to stock options and restricted stock units (“RSUs”). For the three months ended June 30, 2023 and 2022, the Company recorded expense of $ 493,632 ($ 36,197 of which was included within research and development expenses and $ 457,435 was included within general and administrative expenses on the statements of operations) and $ 1,036,926 ($ 516,669 of which was included within research and development expenses and $ 520,257 was included within general and administrative expenses on the statements of operations), respectively. For the six months ended June 30, 2023 and 2022, the Company recorded expense of $ 1,312,696 ($ 411,327 of which was included within research and development expenses and $ 901,369 was included within general and administrative expenses on the statements of operations) and $ 1,945,913 ($ 1,017,850 of which was included within research and development expenses and $ 928,063 was included within general and administrative expenses on the statements of operations), respectively. 11 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Restricted Stock Units A summary of RSU activity during the six months ended June 30, 2023 is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ Number of ​ Grant Date Value ​ RSUs Per Share RSUs non-vested January 1, 2023 172,800 ​ $ 1.80 Granted 86,205 ​ 2.32 Vested ( 150,578 ) ​ 1.80 Forfeited ( 22,222 ) ​ 1.80 RSUs non-vested June 30, 2023 86,205 ​ $ 2.32 ​ ​ ​ ​ ​ ​ Vested RSUs undelivered June 30, 2023 29,611 ​ $ 3.68 ​ To date, RSUs have only been granted to directors in accordance with the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan. The Company’s policy is to defer settlement of such RSUs until the termination of such director’s service on the Company’s board of directors. On February 28, 2023, the Company delivered 3,289 shares of common stock in respect of RSUs upon the resignation of a director. On June 16, 2023, the Company delivered 44,444 shares of common stock in respect of RSUs based on the prior resignation of two directors. As of June 30, 2023, there was $ 200,000 of unrecognized stock-based compensation expense related to RSUs which will be recognized over a weighted average period of 1.0 years. Stock Options In applying the Black-Scholes option pricing model to stock options granted, the Company used the following approximate assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Six Months Ended ​ ​ June 30, ​ June 30, ​ 2023 2022 2023 2022 Expected term (years) ​ 5.50 - 10.00 5.09 - 5.50 ​ ​ 5.50 - 10.00 ​ ​ 0.58 - 10.00 Risk free interest rate ​ 3.44 % - 4.02 % ​ 2.79 % ​ ​ 3.44 % - 4.18 % ​ ​ 0.76 % - 2.79 % Expected volatility ​ 82 % - 94 % ​ 88 % ​ ​ 82 % - 95 % ​ ​ 82 % - 90 % Expected dividends ​ 0.00 % ​ 0.00 % ​ ​ 0.00 % ​ ​ 0.00 % ​ The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model. Option forfeitures are accounted for at the time of occurrence. The expected term is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company uses a blended volatility calculation, the components of which are the Company’s historical volatility for the period from its initial public offering through the valuation date and the average peer-group data of six comparable entities to supplement the Company’s own historical data for the preceding years in computing the expected volatility. Accordingly, the Company is utilizing an expected volatility figure based on a review of the historical volatility of comparable entities over a period of time equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. The Company has not declared dividends, is currently in the development stage and has no plan to declare future dividends at this time. The weighted average estimated grant date fair value of the stock options granted for the three months ended June 30, 2023 and 2022 was approximately $ 2.04 and $ 1.37 per share, respectively. The weighted average estimated grant date fair value of the stock options granted for the six months ended June 30, 2023 and 2022 was approximately $ 1.78 and $ 2.02 per share, respectively. 12 Table of Contents EYENOVIA, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) A summary of the option activity during the six months ended June 30, 2023 is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Remaining Aggregate ​ Number of Exercise Life Intrinsic ​ Options Price In Years Value Outstanding, January 1, 2023 5,380,553 ​ $ 3.55 ​ Granted 677,190 ​ 2.39 ​ Exercised ( 88,999 ) ​ 1.83 ​ Forfeited/ Expired ( 783,666 ) ​ ​ 3.88 ​ ​ ​ ​ Outstanding June 30, 2023 ​ 5,185,078 ​ $ 3.37 ​ 7.1 ​ $ 962,979 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable June 30, 2023 3,582,370 ​ $ 3.69 6.2 ​ $ 501,462 ​ The following table presents information related to stock options as of June 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding Options Exercisable ​ ​ ​ ​ Weighted ​ ​ ​ ​ Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options ​ $ 1.00 - $ 1.99 1,407,183 ​ 4.7 884,183 ​ $ 2.00 - $ 2.99 1,473,663 ​ 6.9 844,473 ​ $ 3.00 - $ 3.99 908,528 ​ 6.8 694,510 ​ $ 4.00 - $ 4.99 350,500 ​ 8.1 216,178 ​ $ 5.00 - $ 5.99 50,805 ​ 4.3 50,638 ​ $ 6.00 - $ 6.99 843,759 ​ 6.5 741,748 ​ $ 7.00 + 150,640 ​ 4.8 150,640 ​ ​ ​ 5,185,078 ​ 6.2 ​ 3,582,370 ​ As of June 30, 2023, there was $ 2,868,023 of unrecognized stock-based compensation expense related to stock options, which will be recognized over a weighted average period of 1.7 years. Note 9 – Employee Benefit Plans 401(k) Plan In April 2019, the Company adopted the Eyenovia 401(k) Plan (the “Plan”), which went into effect in May 2019. All Company employees are able to participate in the Plan, subject to eligibility requirements as outlined in the Plan documents. 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 2023 and 2022, the Company’s Board of Directors 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, 2023 and 2022, the Company recorded expense of $ 46,196 and $ 47,883 associated with its matching contributions, respectively. During the six months ended June 30, 2023 and 2022, the Company recorded expense of $ 125,164 and $ 133,982 associated with its matching contributions, respectively. ​ ​ ​ 13 Table of Contents