What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-03-18 compared with 2023-03-31 · 326 added, 318 removed, 853 unchanged (43% of the section changed)

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Attestation Report of Registered Public Accounting Firm

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to an exemption established by the JOBS Act for emerging growth companies.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to an exemption for non-accelerated filers.

Other Information.

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Description of Securities

Filed herewith

March 31, 2023

Form of Class A Warrant Issued on March 24, 2020

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March 9, 2022

Form of Warrant Issued on August 29, 2023

August 29, 2023

Form of Warrant issued on August 29, 2023

August 29, 2023

Exclusive License Agreement, dated March 18, 2015, between Eyenovia, Inc.

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March 7, 2022

Director Compensation Policy

March 30, 2022

Addendum to Executive Employment Agreement, dated March 10, 2022, by and between the Company and Tsontcho Ianchulev

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and Avenue Venture Opportunities Fund II, L.P.

Filed herewith

March 31, 2023

Supplement to the Loan and Security Agreement, dated November 22, 2022, by among Eyenovia, Inc., Avenue Capital Management II, L.P., Avenue Venture Opportunities Fund, L.P.

and Avenue Venture Opportunities Fund II, L.P.

Filed herewith

March 31, 2023

Subscription Agreement, dated November 22, 2022, by and among Eyenovia, Inc., Avenue Venture Opportunities Fund, L.P.

and Avenue Venture Opportunities Fund II, L.P.

Filed herewith

March 31, 2023

Employment Agreement, dated December 19, 2022, by and between Eyenovia, Inc.

and Bren Kern

March 31, 2023

Form of Restricted Stock Unit Agreement

Eyenovia, Inc.

Amended and Restated 2018 Omnibus Stock Incentive Plan, as Amended

June 27, 2023

License Agreement, dated August 15, 2023, by and between Eyenovia, Inc.

and Formosa Pharmaceuticals, Inc.

November 13, 2023

Securities Purchase Agreement, dated August 24, 2023

August 29, 2023

Warrant Amendment Agreement, dated August 24, 2023

August 29, 2023

Mutual Termination and Reassignment, dated January 12, 2024, by and between Eyenovia, Inc and Bausch + Lomb Ireland Limited

Filed herewith

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Filed herewith

Policy Relating to Recovery of Erroneously Awarded Compensation

Filed herewith

Inline interactive data files pursuant to Rule 405 of Regulation S-T:

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Management contract or other compensatory plan.

Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) is the type of information that the Company treats as private or confidential.

Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) are the type of information that the Company treats as private or confidential.

Form 10-K Summary.

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Ellen Strahlman

/s/ Michael Geltzeiler

March 18, 2024

Michael Geltzeiler

EYENOVIA, INC.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Eyenovia, Inc.

To the Shareholders and Board of Directors of Eyenovia, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Eyenovia, Inc.

(the “Company”) as of December 31, 2022 and 2021, the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2022 and the related notes (collectively referred to as the “financial statements”).

(the “Company”) as of December 31, 2023 and 2022, the related statements of operations, changes stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

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The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Change in Accounting Principle

As discussed in Note 2 and Note 9 to the financial statements, the Company has changed its method of accounting for leases in 2022 due to the adoption of the guidance in ASC Topic 842, Leases effective January 1, 2022.

Basis for Opinion

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Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Marcum LLP

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Total Current Assets

Restricted cash

Property and equipment, net

Security deposits, non-current

Intangible assets

Operating lease right-of-use asset

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Accrued expenses and other current liabilities

Deferred rent - current portion

Operating lease liabilities - current portion

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Total Current Liabilities

Deferred rent - non-current portion

Operating lease liabilities - non-current portion

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

0 shares issued and outstanding as of December 31, 2022 and 2021, respectively

0 shares issued and outstanding as of December 31, 2023 and 2022

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

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Cost of revenue

( 1,600,000 )

Operating Expenses:

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( 26,911,515 )

Other Income (Expense):

Extinguishment of PPP 7(a) loan

Other income, net

Other (Expense) Income:

Other (expense) income , net

Interest expense

( 2,371,851 )

( 1,380,058 )

Interest income

Total Other Expense

( 1,854,650 )

( 1,099,642 )

( 27,261,096 )

( 28,011,157 )

Net Loss Per Share - Basic and Diluted

Weighted Average Number of Common Shares Outstanding - Basic and Diluted

Shares Outstanding - Basic and Diluted

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

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( 90,219,306 )

Issuance of common stock and warrants in direct offering [1]

Issuance of common stock in debt financing [2]

Origination costs related to equity in debt financing

Issuance of common stock in At the Market offering [3]

Exercise of stock warrants

Exercise of stock options

Shares withheld from option exercise for employee tax liability

Issuance of SVB warrants [2]

Exercise of pre-funded stock warrants

Stock-based compensation

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( 118,230,463 )

Issuance of common stock and warrants in direct offering [3]

Issuance of common stock in debt financing [4]

Origination costs related to equity in debt financing

Issuance of common stock and warrants in registered direct offering [4][8]

Issuance of common stock as consideration for licensing agreement [5]

Exercise of pre-funded stock warrants

Issuance of common stock in At the Market offering [6]

Exercise of stock warrants

Cashless exercise of stock options

Exercise of stock options

Stock-based compensation

Issuance of common stock related to vested restricted stock units

Warrant modification - incremental value [7]

Warrant modification - in issuance costs for registered direct offering [8]

( 1,738,700 )

( 27,261,096 )

Balance - December 31, 2023

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[1] Includes gross proceeds of $ 14,981,299 less total issuance costs of $ 83,391 .

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

[3] Includes gross proceeds of $ 14,981,299 less total issuance costs of $ 83,391 .

[2] Relative fair value of stock issued in connection with debt.

[3] Includes gross proceeds of $ 5,445,130 less total issuance costs of $ 163,354 .

[4] Includes gross proceeds of $ 11,977,468 less total cash issuance costs of $ 1,091,354 .

[5] Shares issued as partial consideration for License Agreement with Formosa Pharmaceuticals Inc.

[6] Includes gross proceeds of $ 4,733,909 less total issuance costs of $ 142,017 .

[7] Warrant originally granted in the March 2022 offering was modified in connection with the registered direct offering.

[8] Warrant modification in connection with registered direct offering accounted for as a non-cash issuance cost of the registered direct offering, but is presented on a separate line item for clarity.

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

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Write-off of property and equipment

Gain on forgiveness of PPP 7(a) Loan

Write-down of inventories to net realizable value

Provision for clinical supplies to be returned

Non-cash rent expense

Expense reimbursement

Gain on disposal of property and equipment

Changes in operating assets and liabilities:

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( 2,271,862 )

Deferred license costs

Security deposits

( 2,284,931 )

Security and equipment deposits

Accounts payable

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Accrued expenses and other current liabilities

Deferred license fee

( 14,000,000 )

Deferred rent

Lease liabilities

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Vendor deposits for property and equipment

Investment in intangible asset

( 1,122,945 )

Net Cash Used In Investing Activities

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Proceeds from sale of common stock and warrants in direct offering [1][2]

Payment of issuance costs in registered direct offering

Payment of offering issuance costs

( 1,091,354 )

Proceeds from sale of common stock in At the Market offering

Payment of issuance costs for At the Market offering

Proceeds from exercise of stock options

Proceeds from exercise of stock warrants

Proceeds from SVB loan

Payment of SVB loan issuance costs

Proceeds from notes and equity issued to Avenue

Proceeds from note payable and equity issued to Avenue

Payment of issuance costs for equity issued to Avenue

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( 8,175,332 )

Proceeds from exercise of stock options

Net Cash Provided By Financing Activities

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Cash and Cash Equivalents - End of Year

[1] Includes gross proceeds of $ 14,981,299 , of which $ 5,741,299 is pre-funded warrants.

Cash, cash equivalents and restricted cash consisted of the following:

Cash and cash equivalents

Restricted cash

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

EYENOVIA, INC.

Statements of Cash Flows, continued

For the Years Ended

Supplemental Disclosure of Cash Flow Information:

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Supplemental Disclosure of Non-Cash Investing and Financing Activities

Purchase of insurance premium financed by note payable

Purchase of insurance policy financed by note payable

Recognition of right-of-use asset for lease liability upon adoption of ASU 2016-02

Right-of-use assets obtained in exchange for lease liabilities

Shares withheld from option exercise for employee tax liability

Warrants issued for debt issuance costs

Right-of-use assets and lease liabilities recognized upon lease renewal

Vendor deposits applied to purchases of property and equipment

Original issue discount on notes payable

Warrant modification - incremental value

Issuance of common stock as consideration for licensing agreement

Cashless exercise of stock options

Common shares issued recorded as debt discount for Avenue Loan

Issuance of common stock related to vested restricted stock units

[1] For 2022, includes gross proceeds of $ 14,981,299 , of which $ 5,741,299 is pre-funded warrants.

[2] For 2023, includes gross proceeds of $ 11,977,468 , of which $ 4,168,011 is pre-funded warrants.

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

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Note 1 – Business Organization and Nature of Operations

Eyenovia, Inc., or Eyenovia or the Company, is a pre-commercial ophthalmic technology company developing the Optejet® delivery system for use both in combination with its own drug-device therapeutic programs as well as out-licensing for additional indications.

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 as well as out-licensing for additional indications.

Eyenovia’s aim is to improve the delivery of topical ophthalmic medication through ergonomic design that facilitates ease-of-use and delivery of more physiologically appropriate medication volume, with the goal to reduce side effects and improve tolerability, and introduce digital health technology to improve therapy compliance and ultimately medical outcomes.

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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.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Use of Estimates

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The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances.

The amounts of assets and liabilities

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, establishment of valuation allowances for deferred tax assets, revenue recognition, the recoverability and useful lives of long-lived assets, the recovery of deferred costs and the deferral of revenues.

The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, establishment of valuation allowances for deferred tax assets, revenue recognition, the recoverability and useful lives of long-lived assets, the realization of inventories and deferred clinical supply costs, the recovery of deferred costs and the deferral of revenues.

Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions.

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See Note 2 - Summary of Significant Accounting Policies — Stock-Based Compensation for additional discussion of the use of estimates in estimating the fair value of the Company’s common stock.

Reclassifications

Certain prior period balances 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.

Cash, Cash Equivalents and Restricted Cash

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.

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.

As of December 31, 2021, the Company had restricted cash in the amount of $ 7,875,000 , which consisted of cash held in a money market account pledged as collateral for a note payable to Silicon Valley Bank, or the SVB Loan.

The restricted cash was used in the repayment of the SVB Loan in November 2022.

See Note 7 – Notes Payable and Convertible Notes Payable – Silicon Valley Bank Loan.

As of December 31, 2023 and 2022, the Company had Treasury bills with original maturity dates of three months or less in the amount of $ 5,450,118 and $ 0 , respectively.

The Company has cash deposits in financial institutions 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 December 31, 2023 and 2022, the Company had cash and cash equivalent balances in excess of FDIC insurance limits of $ 14,243,870 and $ 22,613,520 , respectively.

On March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation, or FDIC, was appointed as receiver.

The Company has a deposit account at SVB.

On March 10, 2023, Silicon Valley Bank (“SVB”), was closed by the California Department of Financial Protection and Innovation, and the FDIC was appointed as receiver.

The Company has deposit accounts at SVB.

The standard deposit insurance amount is up to $ 250,000 per depositor, per insured bank, for each account ownership category.

As of the date of filing, the Company had approximately $ 194,000 in a deposit account at SVB.

As of December 31, 2023, the Company had approximately $ 106,000 in deposit accounts at SVB.

Property and Equipment, Net

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The Company capitalizes costs attributable to the betterment of property and equipment when such betterment extends the useful life of the assets.

Vendor deposits toward the purchase of property and equipment are reflected as equipment deposits on the accompanying balance sheets.

The Company commences depreciation of assets when they are placed in service.

Impairment of Long-lived Assets

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The Company did not record any impairment losses during the years ended December 31, 2023 and 2022.

Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on Accounting Standards Codification, or ASC Topic 820 “Fair Value Measurements and Disclosures”, or ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

EYENOVIA, INC.

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FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Fair Value of Financial Instruments

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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The terms of such agreements may contain multiple promised goods and services, which may include (i) licenses to its intellectual property, and (ii) in certain cases, payment in connection with the manufacturing and delivery of clinical supply materials.

Payments to us under these arrangements typically include one or more of the following:

Payments to the Company under these arrangements typically include one or more of the following:

non-refundable, upfront license fees;

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The Company’s policy is to recognize amounts allocated to joint operating activities as a reduction in research and development expense.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Under ASC 606, the Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

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Identify the performance obligations in the contract;

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Determine the transaction price;

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Recognize revenue when the company satisfies a performance obligation.

The Company recognizes revenue primarily from the following type of contract:

Product sales – Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation, which is generally at the time it ships the product to the customer.

The Company must make significant judgments in its 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.

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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.

On September 14, 2021, the Company and Arctic Vision executed Amendment 1 to the Arctic Vision License Agreement, or Arctic Vision Amendment 1, pursuant to which Arctic Vision may develop and commercialize MicroStat for the treatment of mydriasis in Greater China and South Korea.

Upfront License Fees

During the year ended December 31, 2021, the Company recognized $ 4.0 million in revenue, pursuant to the Arctic Vision license agreement, upon the submission of certain trial data to Arctic Vision, permitting Arctic Vision to seek regulatory approval with the National Medical Products Administration of China.

Pursuant to the terms of the Senju License Agreement (see Note 10 – Related Party Transactions) the Company is required to pay Senju a percentage of payments received from Arctic Vision.

Accordingly, the Company paid $ 1.6 million to Senju in connection with the $ 4.0 million upfront license fees received from Arctic Vision, which is reflected as cost of revenue in the accompanying statements of operations.

In connection with Arctic Vision Amendment 1, Arctic Vision paid the Company a $ 250,000 upfront fee, which in turn, the Company paid to Senju in connection with Senju Amendment 2 (see Note 10 – Related Party Transactions).

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

On September 14, 2021, the Company and Arctic Vision executed Amendment 1 to the Arctic Vision License Agreement pursuant to which Arctic Vision may develop and commercialize MicroStat for the treatment of mydriasis in Greater China and South Korea.

Milestone Payments

The Company may receive an additional $ 37.7 million in milestone payments in connection with the Arctic Vision License Agreement, as amended, based on various development and regulatory milestones, including the initiation of clinical research and regulatory approvals in Greater China and South Korea, related to the filing of Marketing Authorization Applications of approximately $ 13.2 million and the receipt of regulatory approvals of approximately $ 24.5 million.

The Company may receive up to $ 37.7 million in milestone payments in connection with the Arctic Vision License Agreement, as amended, based on various development and regulatory milestones, including the initiation of clinical research and regulatory approvals in Greater China and South Korea, related to the filing of marketing authorization applications of approximately $ 13.2 million and the receipt of regulatory approvals of approximately $ 24.5 million.

The Company currently anticipates the remaining milestone related performance obligations to be achieved between late 2024 and late 2025.

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See Note 10—Related Party Transactions—Senju License Agreement for additional details.

Bausch License Agreement

Bausch License Agreements

On October 9, 2020, the Company entered into the Bausch License Agreement pursuant to which Bausch + Lomb may develop and commercialize the Bausch Licensed Product in the Licensed Territory.

Bausch + Lomb may terminate the Bausch License Agreement, with respect to the Bausch Licensed Product to either country in the Licensed Territory, at any time for convenience upon 90 days ’ written notice.

Both parties have the right to terminate the Bausch License Agreement in the event of (i) an uncured material breach after a 60-day period or (ii) a bankruptcy event.

Upfront License Fees

During the year ended December 31, 2021, the Company recognized revenue of $ 10.0 million upon the submission of certain trial to Bausch + Lomb and the transfer of supervisory oversight of the clinical trial to Bausch + Lomb, permitting Bausch + Lomb to assume supervisory oversight of the ongoing MicroPine study, or the CHAPERONE study.

Milestone Payments

Bausch + Lomb 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 December 31, 2022.

The Company currently anticipates that the aforementioned milestone payments will be earned between late 2024 and late 2025.

Royalty Payments

Under the terms of the Bausch License Agreement, on a country-to-country basis and Bausch Licensed Product-by- Bausch Licensed Product basis, Bausch + Lomb 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 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 December 31, 2022.

Bausch + Lomb could terminate the Bausch License Agreement, with respect to the Bausch Licensed Product to either country in the Licensed Territory, at any time for convenience upon 90 days ’ written notice.

On January 12, 2024, the Company and Bausch + Lomb entered into a Letter Agreement (the “Letter Agreement”), pursuant to which Eyenovia will reacquire the rights to the Bausch Licensed Product (see Note 13 – Subsequent Events).

The terms of the agreement include the transfer of the rights and certain assets relating to the Bausch Licensed Product from Bausch + Lomb to the Company in exchange for cash and common stock consideration.

In addition, under the terms of the Letter Agreement, the Company has also agreed to pay Bausch + Lomb a low single-digit royalty on its net sales of the Bausch Licensed Product in the United States and Canada for a period of ten years from the date of the first commercial sale by the Company (or its affiliates or licensees) of the Bausch Licensed Product in the United States.

Under the Letter Agreement, (i) the Company will re-acquire any and all licenses and other rights granted by the Company to Bausch + Lomb under the original Bausch License Agreement, (ii) any and all licenses and other rights granted by Bausch + Lomb to the Company under the License Agreement are terminated, other than as set forth in the Letter Agreement, and (iii) other than as set forth in the Letter Agreement, Bausch + Lomb is released from all of their ongoing obligations under the License Agreement, including development and commercialization obligations.

In connection with the entry into the Letter Agreement, the Company will issue Bausch + Lomb $ 3.0 million in shares of the Company’s common stock, within ten business days of the completion of the Regulatory Transfers.

Under the Letter Agreement, the Company has also agreed to pay Bausch + Lomb an upfront payment of $ 2.0 million in cash.

Clinical Supply Arrangements

Bausch + Lomb and 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.

Our licensing agreements with Bausch + Lomb and Arctic Vision represent collaborative arrangements and they are not a customer with respect to the clinical supply arrangements.

Bausch + Lomb and Arctic Vision had 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.

Based on the Letter Agreement with Bausch + Lomb referenced above, the arrangement with Bausch + Lomb is terminated.

The arrangement with Arctic Vision is still in place.

The Company’s licensing agreement with 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.

Deferred clinical supply costs were $ 2.3 million at December 31, 2022.

Net income from the sale of clinical supplies was included in other income and amounted to $ 0.2 million for the year ended December 31, 2022.

Operating Leases

The Company adopted the Accounting Standards Update, or ASU 2016-02,“Leases (Topic 842)” as of December 31, 2022, effective January 1, 2022.

The Company leases its facilities under non-cancellable operating leases.

The Company evaluates the nature of each lease at the inception of an arrangement to determine whether it is an operating or financing lease and recognizes the ROU asset and lease liabilities based on the present value of future minimum lease payments over the expected lease term.

The Company recognizes a

and (b) report the net income from the clinical supply arrangements as other income.

Deferred clinical supply costs were $ 4.3 million and $ 2.3 million at December 31, 2023 and 2022, respectively.

Net income from the sale of clinical supplies was included in other income and amounted to $ 0.2 million for each of the years ended December 31, 2023 and 2022, but a $ 0.4 million provision for possible product returns was also charged against the results for the year ended December 31, 2023.

This provision was for the cost to replace or rework the defective clinical supply product.

See Note 9 – Commitments and Contingencies – Clinical Supply Returns.

Inventories are stated at the lower of cost or net realizable value.

Cost is determined using the first-in, first-out method.

The cost of inventory that is sold to third parties is included within cost of sales.

The Company will periodically review for slow-moving, excess or obsolete inventories.

EYENOVIA, INC.

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FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”.

Inventory is primarily comprised of drug-device combination products, which are available for commercial sale, as follows:

Finished goods

Work-in-process

Raw materials

Total inventory

Intangible Assets

The application of the guidance in ASC 805 (“Business Combinations”) on accounting for business combinations can differ significantly depending on whether the acquired entity is considered a “business” or an “asset.” A determination of whether the transaction represented an asset acquisition or a business combination must be made.

On August 15, 2023 (the “Effective Date”), the Company entered into a license agreement (the “License”) with Formosa Pharmaceuticals Inc.

(the “Licensor”), whereby the Company acquired the exclusive U.S.

rights to commercialize any product related to a novel formulation of clobetasol propionate ophthalmic suspension, 0.05 %, which was approved by the FDA for ophthalmic use for inflammation and pain after ocular surgery and supplemental disease indications, if any, associated with the New Drug Application for the Licensed Product.

The License will remain in effect for ten years from the date of the first commercial sale of a Licensed Product, unless earlier terminated.

The Company paid the Licensor the aggregate amount of $ 2,000,000 (the “Upfront Payment”), consisting of (a) cash in the amount of $ 1,000,000 and (b) 487,805 shares of common stock valued at $ 1,000,000 , which is included in Intangible Assets on the accompanying balance sheet.

In addition to the Upfront Payment, the Company also capitalized $ 122,945 of transaction costs, which were primarily legal expenses.

In addition, the Company must pay the Licensor up to $ 4 million upon the achievement of certain development milestones and up to $ 80 million upon the achievement of certain sales milestones.

The initial trigger for development milestone payments is FDA approval of the Licensed Product.

These contingent payments will be recorded when payment becomes probable and estimable.

It was determined that the transaction represented an asset acquisition, rather than a business combination, because substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset.

Consequently, the accounting is pursuant to the cost accumulation model.

The Upfront Payment has been capitalized as an intangible asset by the Company, and will be amortized over the useful life of 10 years , beginning on the date of the first commercial sale of the Licensed Product.

Operating Leases

The Company adopted the Accounting Standards Update, or ASU 2016-02,“Leases (Topic 842)” as of December 31, 2022, effective January 1, 2022.

The Company leases its facilities under non-cancellable operating leases.

The Company evaluates the nature of each lease at the inception of an arrangement to determine whether it is an operating or financing lease and recognizes the right-of-use asset and lease liabilities based on the present value of future minimum lease payments over the expected lease term.

The Company recognizes a liability to make lease payments, the “lease liability”, and an asset representing the right to use the underlying asset during the lease term, the “right-of-use asset”.

The lease liability is measured at the present value of the remaining lease payments, discounted at the Company’s incremental borrowing rate.

5 unchanged sentences

The Company records prepaid expenses on its balance sheet for the payment of research and development expenses in advance of services being provided.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

The Company’s license agreements were determined to represent collaborative arrangements.

9 unchanged sentences

See Note 11 – Stockholders’ Equity – Stock Options for additional information related to estimating the fair value of stock options.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Net Loss Per Share of Common Stock

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

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

Diluted loss 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.

12 unchanged sentences

Denominator for basic and diluted net loss per share

Basic and diluted net loss per share of common stock

Basic and diluted net loss per common share

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

Convertible notes

Restricted stock units

Total potentially dilutive shares

Subsequent Events

The Company has evaluated subsequent events through the date which the financial statements were issued.

Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed.

Recently Adopted Accounting Standards

On May 3, 2021, the Financial Accounting Standards Board, or 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.

Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard.

The Company adopted ASU 2021-04 effective January 1, 2022.

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

EYENOVIA, INC.

1 unchanged sentence

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

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

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

A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

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

The Company adopted ASU 2016-02 on December 31, 2022, effective January 1, 2022 and the adoption of this ASU had a material impact on the Company’s financial statements, primarily as a result of recording right-of-use assets and lease liabilities for its operating leases in the approximate amounts of $ 580,000 and $ 619,000 , and derecognizing deferred rent in the approximate amount of $ 39,000 .

Subsequent Events

The Company has evaluated subsequent events through the date which the financial statements were issued.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this standard, but does not expect it to have a material impact on its financial statements.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU No.

2 unchanged sentences

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 will be required to adopt the provisions of this ASU on January 1, 2023, with early adoption permitted for certain amendments.

Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings.

The adoption of Topic 326 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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):

3 unchanged sentences

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, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance.

The ASU also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events.

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, but not earlier than for fiscal years beginning after December 15, 2020.

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 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

The adoption of ASU 2020-06 did not have a material impact on the Company’s financial position, results of operations or cash flows.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Note 3 – Prepaid Expenses and Other Current Assets

1 unchanged sentence

Payroll tax receivable

Prepaid research and development expenses

Prepaid insurance expenses

1 unchanged sentence

Prepaid general and administrative expenses

Prepaid rent and security deposit

Prepaid patent expenses

Prepaid research and development expenses

Prepaid board of directors fees

Prepaid rent and security deposit

Total prepaid expenses and other current assets

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Note 4 - Property and Equipment, Net

As of December 31, 2023 and 2022, property and equipment consisted of the following:

Equipment not yet placed in service

Leasehold improvements

accumulated depreciation and amortization

( 1,419,046 )

Property and equipment, net

Equipment not yet placed in service

Depreciation expense was $ 783,208 and $ 307,430 for the years ended December 31, 2023 and 2022, respectively, of which $ 776,479 and $ 301,205 , respectively, was included within research and development expenses and $ 6,729 and $ 6,225 , respectively, was included in general and administrative expenses in the accompanying statements of operations.

As of December 31, 2022 and 2021, the Company had $ 726,326 and $ 391,941 of outstanding deposits for equipment purchases.

Note 5 – Accrued Expenses and Other Current Liabilities

As of December 31, 2022 and 2021, accrued expenses and other current liabilities consisted of the following:

Accrued consulting and professional services

Accrued leasehold improvements

Credit card payable

Accrued research and development expenses

Accrued interest

Accrued franchise tax

Total accrued expenses and other current liabilities

As of December 31, 2023 and 2022, the Company had $ 711,441 and $ 726,326 of outstanding deposits for equipment purchases, which are presented as non-current assets on the balance sheet.

Note 5 – Accrued Compensation

6 unchanged sentences

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Note 6 – Accrued Expenses and Other Current Liabilities

As of December 31, 2023 and 2022, accrued expenses and other current liabilities consisted of the following:

Accrued rework of clinical supply returns

Accrued research and development expenses

Accrued professional services

Credit card payable

Accrued leasehold improvements

Total accrued expenses and other current liabilities

Note 7 – Notes Payable and Convertible Notes Payable

6 unchanged sentences

Debt Discount

Silicon Valley Bank loan

Current portion:

Avenue - Note payable

Avenue - Convertible note payable

( 1,694,228 )

Current portion

Silicon Valley Bank loan

( 7,500,000 )

( 7,150,368 )

Total current portion

Non-Current portion:

Avenue - Note payable

Avenue - Convertible note payable

Notes Payable, Non-Current

Total non-current portion

( 1,626,458 )

The non-current portion of notes payable and convertible notes payable includes a notes payable and a convertible note payable, each in the amount, net of discount, of $ 4,190,938 .

BankDirect Capital Finance Loan

On February 24, 2021, the Company issued a note payable for the purchase of a directors and officers’ liability insurance policy.

The note payable was payable in nine monthly payments consisting of principal and interest amounting to $ 79,343 for an aggregate amount of $ 714,087 .

The note accrued interest at a rate of 2.96 % per year and matured on November 24, 2021 .The note payable was repaid in full during the year ended December 31, 2021.

Interest expense was $ 8,727 for the year ended December 31, 2021.

On February 24, 2022, the Company issued a note payable for the purchase of a directors and officers’ liability insurance policy.

On February 24, 2022, the Company issued a note payable in the amount of $ 675,332 for the purchase of a directors and officers’ liability insurance policy.

The note payable was payable in six monthly payments consisting of principal and interest amounting to $ 113,628 for an aggregate amount of $ 681,768 .

2 unchanged sentences

Interest expense was $ 6,436 for the year ended December 31, 2022.

Paycheck Protection Program Loan

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, or the 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 original 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.

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 statements of operations for the year ended December 31, 2021.

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

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 note accrued interest at a rate of 7.11 % per year and matured on August 24, 2023 .

The D&O Loan was payable in six monthly payments of $ 103,639 consisting of principal and interest.

The note payable was repaid in full during the year ended December 31, 2023.

Interest expense was $ 12,694 for the year ended December 31, 2023.

Silicon Valley Bank Loan

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

The interest rate on the Loan was 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 %.

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

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 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.

The maturity date of the Loan was May 1, 2025 .

The Loan indicated a prepayment fee of 2.0 % of the principal balance

EYENOVIA, INC.

1 unchanged sentence

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

indicated a prepayment fee of 2.0 % of the principal balance made on or prior to the second anniversary of the Effective Date.

made on or prior to the second anniversary of the Effective Date.

The Loan also provided for a final payment in an amount equal to the original aggregate principal amount of the Loan multiplied by 5.0 %.

The final payment is in addition to and not a substitution for the regular monthly payments of principal plus accrued interest and was due upon the repayment of the loan in full.

On September 29, 2021, the Company and SVB executed the First Amendment to the Loan and Security Agreement, or the Amendment.

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 was required to maintain a collateralized money market account in the amount of $ 7,875,000 .

The Company recorded this amount as restricted cash.

On October 25, 2021, the Company announced the reclassification of Mydcombi as a drug-device combination product by the FDA in a CRL received on October 22, 2021.

Given the FDA’s recent reclassification of Mydcombi as a drug-device combination and the need to file an NDA resubmission in 2022, the restricted cash became callable on November 30, 2021, at SVB’s election, to satisfy the Loan obligations.

Therefore, the Loan was fully classified as a current note payable as of December 31, 2021.

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.

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:

stock price of $ 4.76 ;

expected term of 10.0 years;

volatility of 89.0 % and a risk-free interest rate of 1.60 %.

The Company incurred $ 66,618 of debt issuance costs, of which $ 63,469 was allocated to the debt and $ 3,149 was allocated to the warrants.

The relative fair value of the warrants and the issuance costs allocated to the debt were recorded as debt discount.

On November 4, 2022, the Company repaid the SVB Loan in full.

On November 4, 2022, the Company repaid the Loan in full.

The full amount of the payment was $ 8,025,000 , and included the principal amount of the loan ($ 7,500,000 ), the final payment ($ 375,000 )and a 2 % prepayment fee ($ 150,000 ).

1 unchanged sentence

The entire restricted cash account in the amount of $ 7,875,000 was used to make the substantial amount of the payment.

During the years ended December 31, 2022 and 2021, the Company recorded interest expense relating to the Loan of $ 1,174,736 and $ 317,333 , respectively, including the amortization of debt discount of $ 349,632 and $ 68,376 , respectively.

During the year ended December 31, 2022, the Company recorded interest expense relating to the Loan of $ 1,174,736 , including the amortization of debt discount of $ 349,632 .

Avenue Ventures Loan

On November 22, 2022, the Company entered into a Loan and Security Agreement, or the Avenue Loan, with Avenue Venture Opportunities Fund, L.P., or Avenue 1, and Avenue Venture Opportunities Fund, L.P.

II, or Avenue 2, and together with Avenue, the Lender, for an aggregate principal amount of up to $ 15,000,000 .

The initial tranche of the Avenue Loan is $ 10,000,000 , consisting of $ 4,000,000 from Avenue and $ 6,000,000 from Avenue 2.

Up to $ 5,000,000 of the principal amount outstanding may be converted at the option of the Lender into shares of the Company’s common stock at a conversion price of $ 2.148 per share, subject to typical anti-dilution adjustments, or the Convertible Loan.

On November 22, 2022, the Company entered into a Loan and Security Agreement (the “Avenue Loan Agreement”) with Avenue Venture Opportunities Fund, L.P., (“Avenue 1”), and Avenue Venture Opportunities Fund, L.P.

II, (“Avenue 2”), and together with Avenue, (the “Lender”), for an aggregate principal amount of up to $ 15,000,000 (the “Avenue Loan”).

The initial tranche of the Avenue Loan was $ 10,000,000 , consisting of $ 4,000,000 from Avenue and $ 6,000,000 from Avenue 2.

The Avenue Loan bears 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 Avenue Loan maturity date is November 1, 2025.

The Company may request an additional $ 5,000,000 of gross funding between April 1, 2023 and July 31, 2023, subject to agreed-upon conditions.

The Company must also make an incremental final payment equal to 4.25 % of the aggregate funding, or the Final Payment, amounting to a premium of $ 425,000 .

The Company was able to request an additional $ 5,000,000 of gross funding between April 1, 2023 and July 31, 2023, subject to agreed-upon conditions.

The Company must also make an incremental final payment equal to 4.25 % of the aggregate funding, amounting to a premium of $ 425,000 on the initial tranche.

The Company will make monthly interest-only payments during the first twelve months of the Avenue Loan, which could be increased to up to eighteen months upon the achievement of specified performance milestones.

1 unchanged sentence

If the Company prepays the Avenue Loan, it will be required to pay a prepayment fee of 3 % if the Avenue Loan is prepaid during the first year, 2 % if the Avenue Loan is prepaid during the second year and 1 % if the Avenue Loan is repaid during the third year.

On May 22, 2023, pursuant to the Loan and Security Agreement, the Company received an additional tranche of non-convertible debt funding in the amount of $ 5,000,000 .

The Company paid approximately $ 126,000 of origination and legal fees connected to this debt funding.

The additional funding is subject to the same interest and maturity date as the initial tranche.

The additional funding triggered the extension of the interest-only payment period from the original 12 months to 18 months (through May 2024) for the entire outstanding balance due under the Avenue Loan 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.

The Company must also make a final payment equal to 4.25 % of the additional tranche, amounting to a premium of $ 212,500 on the additional tranche.

The total final payment on the aggregate borrowing is $ 637,500 .

If the Company prepays the Avenue Loan, it will be required to pay a prepayment fee of 2 % if the Avenue Loan is prepaid during the second year and 1 % if the Avenue Loan is repaid during the third year.

The Avenue Loan requires the Company to make and maintain representations and warranties and other agreements that are customary in loan agreements of this type.

The Avenue Loan is secured by all of the Company’s assets globally, including intellectual property.

The Avenue Loan is secured by all of the Company’s assets, including intellectual property.

The Avenue Loan also contains customary events of default, including non-payment of principal or interest, violations of covenants, bankruptcy and material judgments.

Upon the occurrence of an event of default, all interest and principal will be accelerated and

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

immediately become due and payable.

Upon the occurrence of an event of default, all interest and principal immediately become due and payable.

In addition, Avenue will have the right to exercise any other right or remedy provided by applicable law.

1 unchanged sentence

This has been accounted for as a component of debt discount.

In connection with the Loan, the Company granted an aggregate of 547,807 shares of its common stock to the Lender, or the Avenue Private Placement Shares.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

In connection with the Avenue Loan, the Company granted an aggregate of 547,807 shares of its common stock to the Lender.

Based on the Company’s stock price of $ 1.79 per share on the closing date, the shares have a gross value of $ 980,575 and a relative fair value of $ 859,733 .

5 unchanged sentences

Private Placement Shares

Withheld From Closing Proceeds:

Withheld From Proceeds:

Legal Reimbursement

1 unchanged sentence

Avenue Management Fee

Total debt discount of $ 1,756,516 less the current year amortization of the Avenue loan in the amount of $ 62,288 resulted in unamortized debt discount of $ 1,694,228 at December 31, 2022.

The following is a summary of the Avenue loan:

The following is a summary of the Avenue loan at December 31, 2023:

December 31, 2023

Non-Convertible

Initial loan funding

Aggregate loan funding

Final payment

2 unchanged sentences

Current portion

( 5,329,419 )

Notes Payable, Non-Current

During the year ended December 31, 2022, the Company recorded interest expense relating to the Loan of $ 189,510 , including the amortization of debt discount of $ 62,288 .

During the years ended December 31, 2023 and 2022, the Company recorded interest expense relating to the Loan of $ 2,359,157 (which includes $ 681,860 of amortization of debt discount) and $ 189,510 (which includes $ 62,286 of amortization of debt discount), respectively.

EYENOVIA, INC.

5 unchanged sentences

Deferred tax (provision) benefit:

( 1,248,043 )

State and local

( 2,358,623 )

( 3,606,666 )

Change in valuation allowance

( 4,532,592 )

( 5,670,556 )

Provision for income taxes

21 unchanged sentences

Property and equipment

Right ot use asset

Right of use asset

Deferred tax assets, net before allowance

5 unchanged sentences

( 4,532,592 )

( 5,670,556 )

EYENOVIA, INC.

17 unchanged sentences

Employment Agreements

On February 14, 2022, the Compensation Committee of the Board approved amendments to the Executive Employment Agreements, or the Employment Agreement Addendums, for three executive officers.

On February 14, 2022, the Compensation Committee of the Board approved amendments to the Executive Employment Agreements, (the “Employment Agreement Addendums”), for three executive officers.

Each of the Employment Agreement Addendums provides that if the executive’s employment is terminated by the Company without “Cause” or the executive suffers an “Involuntarily Termination” (each as defined in the employment agreements), provided that the executive has signed a full release of all claims, the executive will be entitled to receive:

4 unchanged sentences

Rowe is also serving as a member of the Board.

On July 26, 2022, the Company entered into an Employment Agreement, or the Employment Agreement, with Mr.

On July 26, 2022, the Company entered into an Employment Agreement, (the “Employment Agreement”), with Mr.

Rowe under which he will serve as Chief Executive Officer of the Company.

6 unchanged sentences

As a result of the change of salary, the aggregate potential severance pay for the executive officers of the Company is approximately $ 1,004,000 .

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

The Company also entered into an agreement with Dr.

2 unchanged sentences

In consideration for Dr.

Ianchulev’s services, the

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Company has agreed to provide Dr.

Ianchulev’s services, the Company has agreed to provide Dr.

Ianchulev with a $ 5,000 monthly retainer throughout the term of the agreement, in addition to the compensation payable to all non-employee members of the Board.

Clinical Supply Returns

A certain portion of clinical supply product sold to a licensee has been determined to be defective and will be returned to the Company to be replaced or reworked.

The Company is still working to determine the exact quantity of the defective clinical supply and the cost to replace or rework the product.

As of December 31, 2023, the estimate of the range of the loss is between $ 400,000 and $ 600,000 , with no amount within that range being a more accurate estimate than the others at this time.

Accordingly, as of December 31, 2023, the Company has recorded a charge equal to the low end of the range or $ 400,000 , which is included within other income (expense), because the original sales to the licensee were recorded on that line item.

See Note 13 – Subsequent Events.

Operating Leases

On August 8, 2018, the Company entered into a lease agreement to lease approximately 3,800 square feet of office space in New York, NY.

The monthly base rent ranges from $ 19,633 to $ 22,486 per month over the term of the lease.

The lease expires on September 30, 2023 .

The security deposit is approximately $ 118,000 , which has been classified as a current asset.

The Company’s rent expense for this space is recorded in general and administrative expense and amounted to $ 242,067 for each of the years ended December 31, 2022 and 2021, respectively.

On January 20, 2020, the Company entered into a lease agreement to lease 660 square feet of office space in Laguna Hills, California.

The lease term was one year and the lease was renewed each year until it expired on April 30, 2022 .

The monthly base rent ranged from $ 1,254 to $ 1,292 per month over the term of the lease.

The Company received its $ 1,254 security deposit after the lease expired.

The Company had also agreed to lease the adjoining premises as part of the lease extension.

The additional office space is also 660 square feet.

The lease term for this space expires April 30, 2023 .

The monthly rent ranges from $ 1,750 to $ 1,838 per month.

The security deposit is $ 1,750 and has been classified as a current asset.

The Company’s rent expense for the space in this location is recorded in general and administrative expense and amounted to $ 20,501 and $ 29,424 for the years ended December 31, 2022 and 2021, respectively.

On April 8, 2022, the Company entered into a new lease agreement for 3,916 square feet in Laguna Hills, California.

In April 2022, the Company entered into a new lease agreement for 3,916 square feet in Laguna Hills, California.

The new lease term is five years and two months , commencing on June 1, 2022 and expiring on July 31, 2027 .

2 unchanged sentences

The Company’s rent expense for all Laguna Hills space is recorded in general and administrative expense and amounted to $ 118,746 and $ 66,196 for the years ended December 31, 2023 and 2022, respectively.

On July 17, 2020, the Company entered into a lease agreement to lease approximately 3,000 square feet of office space in Redwood City, California, or the Gross Industrial Lease.

The monthly base rent was for $ 7,500 per month over the term of the lease through August 31, 2021 with a security deposit of $ 7,500 .

On December 1, 2020, the Company agreed to amend the terms of the Gross Industrial Lease for a base rent that ranges from $ 7,500 to $ 7,957 per month over the term of the lease.

The amended Gross Industrial Lease expires on August 31, 2023 .

Concurrent with the amendment to the Gross Industrial Lease on December 1, 2020, the Company entered into a lease agreement to lease approximately 1,500 square feet of additional office space in Redwood City, California.

In May 2022, the Company entered into a lease agreement to lease 10,880 square feet of office space in Reno, Nevada.

The lease term is five years and four months , commencing on May 23, 2022 and expiring on September 23, 2027 .

The monthly base rent ranges from $ 13,056 to $ 16,663 per month over the term of the lease.

The lease expires on August 31, 2023 .

The security deposit is $ 53,000 .

Also concurrent with the amendment to the Gross Industrial Lease on December 1, 2020, the Company entered into an additional lease agreement to lease 2,169 square feet of additional office space in Redwood City, California.

The monthly base rent ranges from $ 4,468 to $ 4,602 per month over the term of the lease.

The lease commenced on January 1, 2022 and expires on August 31, 2023.

The Company’s rent expense for this space is recorded in research and development expense and amounted to $ 164,950 and $ 169,521 for the years ended December 31, 2023 and 2022, respectively.

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.

The aggregate monthly base rent ranges from $ 15,742 to $ 16,700 per month over the term of the lease.

The security deposit is $ 15,000 .

The Company's rent expense for all Redwood City space is recorded in research and development expense and amounted to $ 180,240 and $ 128,560 for the years ended December 31, 2022 and 2021, respectively.

The Company leases 953 square feet of office space in Reno, NV for research and development activities from a company owned by the Company’s former Vice President of Research and Development.

The lease, as amended in September 2022, expires on May 1, 2023 and provides for lease payments of $ 5,675 per month and a security deposit in the amount of $ 5,675 .

Since the inception of the lease, the Company made $ 112,600 of leasehold improvements related to this lease which are included in property and equipment, net on the accompanying balance sheets.

The Company’s rent expense for this space is recorded in research and development expense and amounted to $ 192,710 and $ 180,240 for the years ended December 31, 2023 and 2022, respectively.

On May 19, 2022, the Company entered into a lease agreement to lease 10,880 square feet of office space in Reno, Nevada.

The lease term is five years and four months , commencing on May 23, 2022 and expiring on September 23, 2027 .

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 September 30, 2023 .

The lease was extended from November 1, 2023 to December 31, 2026.

The monthly base rent ranges from $ 19,633 to $ 21,298 per month over the term of the lease.

The security deposit is $ 118,000 .

The Company’s rent expense for this space is recorded in research and development expense and amounted to $ 101,023 for the year ended December 31, 2022.

The Company’s rent expense for this space is recorded in general and administrative expense and amounted to $ 233,534 and $ 242,067 for the years ended December 31, 2023 and 2022, respectively.

EYENOVIA, INC.

2 unchanged sentences

A summary of the Company’s right-of-use assets and liabilities is as follows:

For the Year Ended

December 31, 2022

For the Years Ended

Cash paid for amounts included in the measurement of lease liabilities:

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Future minimum payments under the Company’s operating lease agreements are as follows:

For the Year Ending

For the Years Ending

Minimum Lease Payments

Total lease payments

Total future minimum lease payments

Imputed interest

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FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

On April 8, 2020, Eyenovia entered into an amendment, or the Senju License Amendment, to the Senju License Agreement.

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

Pursuant to the Senju License Amendment, the Company can license to any third party the right to research, develop, commercialize, manufacture or use certain products, or 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, or the Territory.

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Pursuant to the Letter Agreement, the Company will pay to Senju a percentage in the range of 30 % to 40 % of certain payments, royalties, or net proceeds received from Arctic Vision in connection with the Arctic Vision License Agreement.

The Senju License Agreement was amended further by the License Amendment 2, effective September 14, 2021, or the Amendment 2.

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

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On April 7, 2020, the Company’s Board of Directors approved the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan (the “Restated Plan”), which stockholders approved on June 30, 2020.

Under the Restated Plan, as amended on June 16, 2022, 5,700,000 shares of the Company’s common stock are reserved for issuance.

Under the Restated Plan, as amended on June 16, 2022 and June 27, 2023, 6,700,000 shares of the Company’s common stock are reserved for issuance.

The Restated Plan requires that all equity awards issued under the Restated Plan vest at least twelve months from the applicable grant date, subject to accelerated vesting, and provides that no dividend or dividend equivalent will be paid on any unvested equity award, although dividends with respect to unvested portions of equity may accrue and be paid when, and if, the awards later vest and the shares are actually issued to the grantee.

In addition, the Restated Plan sets an annual limit on the grant date fair value of awards to any non-employee director, together with any cash fees paid

In addition, the Restated Plan sets an annual limit on the grant date fair value of awards to any non-employee director, together with any cash fees

EYENOVIA, INC.

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FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

during the year, of $ 150,000 , subject to certain exceptions for a non-executive chair of the Board.

paid during the year, of $ 150,000 , subject to certain exceptions for a non-executive chair of the Board.

As of December 31, 2023, the number of securities remaining available for future issuance under equity compensation plans was 2,054,409 .

At-The-Market Offering

May 2021 Sales Agreement

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

Subject to the terms and conditions of the May 2021 Sales Agreement, SVB Securities was able to sell the common stock by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended.

SVB Securities was obligated to 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).

The Company had to pay SVB Securities a commission equal to three percent ( 3.0 )% of the gross sales proceeds of any common stock sold through SVB Securities under the May 2021 Sales Agreement.

Pursuant to the May 2021 Sales Agreement, the Company commenced sales of its common stock on October 6, 2021.

During the year ended December 31, 2021, the Company 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 under the May 2021 Sales Agreement.

December 2021 Sales Agreement

On December 14, 2021, the Company entered into a Sales Agreement, or the December 2021 Sales Agreement, with SVB Securities under which the Company may offer and sell, from time to time at its sole discretion, shares of common stock for gross proceeds of up to $ 50.0 million through SVB Securities as its sales agent, or the Offering.

The May 2021 Sales Agreement was terminated upon the effectiveness of the December 2021 Sales Agreement.

On December 14, 2021, the Company entered into a Sales Agreement, (the “December 2021 Sales Agreement”), with SVB Securities under which the Company may offer and sell, from time to time at its sole discretion, shares of common stock for gross proceeds of up to $ 50.0 million through SVB Securities as its sales agent, or the Offering.

The issuance and sale of shares, if any, of common stock by the Company under the December 2021 Sales Agreement will be pursuant to the Company’s Registration Statement on Form S-3 (File No.

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During the year ended December 31, 2022, the Company received approximately $ 5.4 million in gross proceeds and $ 5.3 million in net proceeds from the sale of 2,716,061 shares of its common stock under the December 2021 Sales Agreement.

During the year ended December 31, 2023, the Company received approximately $ 4.7 million in gross proceeds and $ 4.6 million in net proceeds from the sale of 1,866,147 shares of its common stock.

Securities Purchase Agreement

On March 3, 2022, the Company entered into a securities purchase agreement, or the Purchase Agreement with a certain institutional and accredited investor, or the Purchaser, pursuant to which the Company issued (i) 3,000,000 shares of common stock, (ii) pre-funded warrants, or the 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, or the Investor Warrants, or the March 2022 Offering.

On March 3, 2022, the Company entered into a securities purchase agreement, (the “Purchase Agreement”) with a certain institutional and accredited investor, or the Purchaser, pursuant to which the Company issued (i) 3,000,000 shares of common stock, (ii) pre-funded warrants, (the “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 “Investor Warrants”), (together, the “the March 2022 Offering”).

The Company determined that the warrants qualified for equity classification.

The offering price for the shares was $ 3.08 per share and the offering price for the Pre-Funded Warrants was $ 3.07 per Pre-Funded Warrant, which represents the per share public offering price less $ 0.01 per share exercise price for each Pre-Funded Warrant.

The Investor Warrants will have an exercise price of $ 3.54 per share and each Investor Warrant will be exercisable for one share of Common Stock.

The Investor Warrants will be exercisable beginning six months from the date of issuance and the Pre-Funded Warrants will be exercisable immediately upon issuance.

The Pre-Funded Warrants shall terminate when fully exercised and the Investor Warrants will

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

terminate five years from the initial exercisability date.

The Investor Warrants will have an exercise price of $ 3.54 per share and each Investor Warrant became exercisable for one share of Common Stock.

The Investor Warrants became exercisable six months from the date of issuance and the Pre-Funded Warrants were exercisable immediately upon issuance.

The Pre-Funded Warrants shall terminate when fully exercised and the Investor Warrants will terminate five years from the initial exercisability date.

The aggregate gross proceeds to the Company from the March 2022 Offering were approximately $ 15 million, excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants and the Investor Warrants.

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333-261638), as previously filed with and declared effective by the Securities and Exchange Commission and a related prospectus.

Registered Direct Offering

On August 24, 2023, the Company entered into a securities purchase agreement with a certain institutional and accredited investor (the “Purchaser”), pursuant to which the Company agreed to sell, in a registered direct offering by the Company directly to the Purchaser (the “August 2023 Offering”), 4,198,633 shares of common stock, pre-funded warrants to purchase up to 2,252,979 shares of common stock and warrants to purchase up to 4,838,709 shares of common stock (the “Common Warrants” and, together with the Pre-Funded

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Warrants, the “Warrants”).

The combined offering price for each share of common stock and accompanying Common Warrant was $ 1.86 , and the combined offering price for each Pre-Funded Warrant and accompanying Common Warrant was $ 1.85 .

The Common Warrants will be exercisable beginning six months following the date of issuance and may be exercised for a period of five years from the initial exercisability date at an exercise price of $ 2.23 per share.

The Pre-Funded Warrants were immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full at an exercise price of $ 0.01 per share.

The exercise prices and numbers of shares of common stock issuable upon exercise of the Common Warrants and the Pre-Funded Warrants are subject to typical anti-dilution provisions.

A holder may not exercise any portion of such holder’s Common Warrants or Pre-Funded Warrants to the extent that the holder would own more than 4.99 % of the Company’s outstanding common stock immediately after exercise (unless the holder otherwise elects a limitation of 9.99 %).

The Company determined that the Warrants met the criteria to be classified as equity.

The net cash proceeds of the August 2023 Offering were approximately $ 10.9 million after deducting cash issuance costs in the aggregate amount of approximately $ 1.1 million.

See Warrant Modification below for details about an additional $ 1.7 million of non-cash issuance costs.

The August 2023 Offering closed on August 29, 2023.

Warrant Modification

In connection with the August 2023 Offering (see “Registered Direct Offering” below), the Company entered into a warrant amendment agreement (the “Amendment”) with the Purchaser, whereby the Company agreed to amend the March 2022 Investor Warrants to (i) reduce the exercise price from $ 3.54 per share of common stock to $ 2.23 per share of common stock, (ii) extend the term of the March 2022 Investor Warrants until March 1, 2029, (iii) include a stockholder approval requirement in connection with a modification of the beneficial ownership limitation and (iv) prohibit exercise of the March 2022 Investor Warrants for the six-month period following the effective date of the Amendment.

The Company accounted for the modification of the March 2022 Investor Warrants as an exchange of the old warrants for new warrants.

The incremental value of the new warrant (resulting from the decrease in exercise price from $ 3.54 to $ 2.23 per share and the extension of the warrant expiration date to March 1, 2029) was measured as the excess of the fair value of the modified warrants over the fair value of the original warrants immediately before modification.

The increase in the incremental value of $ 1,738,700 was credited to additional paid-in-capital (“APIC”) and debited to APIC as an issuance cost of the August 2023 Offering.

A summary of the warrant activity during the year ended December 31, 2023 is presented below:

Outstanding January 1, 2023

Repriced - (Old)

( 4,870,130 )

Repriced - (New)

( 2,252,979 )

Outstanding December 31, 2023

Exercisable December 31, 2023

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

The following table presents information related to warrants as of December 31, 2023:

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Remaining Life

(1) - These warrants become exercisable on or about February 24, 2024.

During the year ended December 31, 2023, warrants for the purchase of 2,252,979 shares of the Company’s common stock with an exercise price of $ 0.01 per share were exercised for aggregate proceeds of $ 22,529 .

During the year ended December 31, 2022, warrants for the purchase of 1,870,130 shares of the Company’s common stock with an exercise price $ 0.01 per share were exercised for aggregate proceeds of $ 18,701 .

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For the years ended December 31, 2023 and 2022, the Company recorded stock-based compensation expense of $ 2,497,890 ($ 839,038 of which was included within research and development expenses and $ 1,658,852 was included within general and administrative expenses on the statements of operations) and $ 3,765,364 ($ 1,809,305 of which was included within research and development expenses and $ 1,956,062 was included within general and administrative expenses on the statements of operations), respectively.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Restricted Stock Units

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The Company’s policy is not to deliver shares underlying the RSUs until the termination of service.

Between March 31, 2021 and November 17, 2021 the Company granted members of its Board of Directors an aggregate of 49,964 RSUs under the Restated Plan.

Between February 14, 2022 and August 18, 2022, the Company granted members of its Board of Directors an aggregate of 193,304 RSUs under the Restated Plan.

Each RSU is subject to settlement into one share of the Company’s common stock.

The RSUs vest on the earlier of (i) the one-year anniversary of the date of grant and (ii) June 16, 2022 (the date of the 2022 annual stockholders meeting), subject to the grantee remaining on the Board until then.

The RSUs vest on the earlier of (i) the one-year anniversary of the date of grant and (ii) the date of the 2023 annual stockholders meeting, subject to the grantee remaining on the Board until then.

The RSUs had a grant date fair value of $ 373,000 , which will be recognized over the vesting period.

Between February 14, 2022 and August 18, 2022 the Company granted members of its Board of Directors an aggregate of 193,304 RSUs under the Restated Plan.

In 2022, there was 108,366 of common shares issued related to vested RSUs.

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Between June 27, 2023 and November 14, 2023, the Company granted members of its Board of Directors an aggregate of 106,019 RSUs under the Restated Plan.

Each RSU is subject to settlement into one share of the Company’s common stock.

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The RSUs had a grant date fair value of $ 224,800 , which will be recognized over the vesting period.

In 2023, there was 47,733 of common shares issued related to vested RSUs.

As of December 31, 2023, there was $ 119,141 of unrecognized stock-based compensation expense related to RSUs which will be recognized over a weighted average period of 0.6 years.

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Exercisable, December 31, 2023

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

The 2023 option exercises resulted in common stock issuances of (a) 10,000 shares;

and (b) 20,749 shares after withholding 58,250 shares pursuant to a cashless exercise.

The following table presents information related to stock options as of December 31, 2023:

Options Outstanding

Options Exercisable

Remaining Life

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$ 6.00 - $ 6.99

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following approximate assumptions:

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The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” 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 Company uses its historical volatility for the period from its initial public offering through the valuation date in computing the expected volatility.

Accordingly, the Company is utilizing an expected volatility figure based on a review of its historical volatility 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.

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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 2019, 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

EYENOVIA, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

vesting requirements as outlined in the Plan documents.

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.

For the years ended December 31, 2023 and 2022, the Company recorded expense of $ 218,170 and $ 208,006 associated with its matching contributions, respectively.

Note 13 – Subsequent Events

Stock Option Grants

Subsequent to December 31, 2022, the Company issued ten-year stock options to certain employees and consultants to purchase an aggregate of 421,735 shares of common stock of the Company at an exercise price $ 2.16 per share.

The options vest as follows:

(i) one-third of the shares vest on the one-year anniversary of the issuance date;

and (ii) the remaining two-thirds vest in equal installments beginning 13 months from the issuance date and ending 36 months from the issuance date.

The fair value of the options will be recognized over the vesting period.

December 2021 Sales Agreement

Subsequent to December 31, 2022, the Company received approximately $ 3.5 million of net proceeds from the sale of 1,299,947 shares of its common stock pursuant to the December 2021 Sales Agreement with SVB Securities.

Development Collaboration Agreement With Formosa

On February 15, 2023, the Company announced that they had entered into a Development Collaboration Agreement, or the Agreement with Formosa Pharmaceuticals, Inc., or Formosa, a Taiwan-based company.

The Agreement combines the Company’s Optejet dispensing technology with Formosa’s unique APNT nanoparticle formulation platform for the potential development of new topical ophthalmic therapeutics that employ the Optejet dispenser.

In 2023, the Company will conduct feasibility testing of novel APNT formulations in the Optejet and request a pre-IND meeting with the FDA.

Formosa will develop and optimize new APNT formulations for use in Optejet and deliver to the Company for device qualification and validation.

Appointment of Chief Operating Officer

Effective January 1, 2023, the Company appointed Bren Kern, the Company’s Senior Vice President of Manufacturing and Operations, as the Company’s Chief Operating Officer.

The Company entered into an Employment Agreement with Mr.

Kern, under which Mr.

Kern receives an annual salary of $ 345,000 .

He is eligible to receive a cash bonus of up to 30 % of his base salary.

Additionally, Mr.

Kern received an option to purchase 120,000 shares of its common stock.

Bausch + Lomb/ Eyenovia Reversion of Licensed Rights Under Mutual Termination Agreement

On January 12, 2024, the Company and Bausch + Lomb entered into a Letter Agreement (the “Letter Agreement”), pursuant to which Eyenovia will reacquire the rights to the Bausch Licensed Product.

See Note 2 – Summary of Significant Accounting Policies – Revenue Recognition – Bausch + Lomb License Agreement for details of the Letter Agreement.

As presented in Note 9 – Commitments and Contingencies – Clinical Supply Returns, the Company had recorded a charge equal to $ 400,000 for the cost to replace or to rework the clinical supply product.

The Letter Agreement will result in a reversal of the clinical supply return reserve, because Bausch + Lomb will no longer be returning the defective product.

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 9A. Controls and Procedures