What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-03-11 compared with 2023-03-06 · 296 added, 212 removed, 847 unchanged (37% of the section changed)

8 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for Ocular Therapeutix, Inc.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for

external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

the company are being made only in accordance with authorizations of management and directors of the company;

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

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Description of Exhibit

Restated Certificate of Incorporation of the Registrant

Amended and Restated Bylaws of the Registrant

Restated Certificate of Incorporation of the Registrant, as amended

Amended and Restated By-laws of the Registrant

Specimen Stock Certificate evidencing the shares of common stock

Registration Rights Agreement, dated as of March 1, 2019, by and among the Registrant and the Purchasers identified therein

Registration Rights Agreement, dated as of February 21, 2024, by and among the Registrant and the other parties thereto

Form of Pre-Funded Warrant

Description of Securities Registered under Section 12 of the Exchange Act

7 unchanged sentences

2019 Inducement Stock Incentive Plan

Amendment to 2019 Inducement Stock Incentive Plan

Form of Non-statutory Stock Option Agreement under 2019 Inducement Stock Incentive Plan

Incorporated by Reference

Description of Exhibit

Amendment to 2019 Inducement Stock Incentive Plan

Amendment No.

2 to 2019 Inducement Stock Incentive Plan

Form of Non-statutory Stock Option Agreement under 2019 Inducement Stock Incentive Plan

Form of Restricted Stock Unit Agreement under 2019 Inducement Stock Incentive Plan

Amended and Restated License Agreement, dated January 27, 2012, between the Registrant and Incept LLC

1 unchanged sentence

2014 Employee Stock Purchase Plan

Amendment No.

1 to Employee Stock Purchase Plan, effective October 4, 2023

Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers

Transition, Separation and Release of Claims Agreement by and between the Registrant and Dr.

Sawhney dated as of May 29, 2019

Lease Agreement dated June 17, 2016 between the WS NF 15 Crosby Drive, LLC and the Registrant

1 unchanged sentence

Employment Agreement, by and between the Registrant and Philip Strassburger, dated August 28, 2020

Consulting Agreement by and between the Registrant and Dr.

Sawhney, dated as of May 29, 2019

Incorporated by Reference

Description of Exhibit

Employment Agreement, by and between the Registrant and Antony C.

Mattessich, dated as of June 20, 2017

Amendment to Employment Agreement by and between the Registrant and Antony C.

Mattessich, dated as of February 21, 2024

Non-Statutory Stock Option Agreement, by and between the Registrant and Antony C.

Mattessich dated as of June 20, 2017

Incorporated by Reference

Description of Exhibit

Employment Agreement, by and between the Registrant and Donald Notman, dated as of September 25, 2017

Second Amendment to Lease, by and between the Registrant and CCC Investors LLC, dated October 10, 2017

Employment Agreement, by and between the Registrant and Michael Goldstein, dated as of September 25, 2017

Third Amendment to Lease, by and between the Registrant and Cobalt PropCo 2020 LLC, dated June 30, 2023

Second Amended and Restated License Agreement, dated September 13, 2018, by and between the Registrant and Incept LLC

Third Amended and Restated Credit and Security Agreement dated December 21, 2018 by and among MidCap Financial Trust, as administrative agent, the Registrant, and the Lenders listed therein

First Amendment to Third Amended and Restated Credit and Security Agreement, dated as of February 21, 2019, by and among the Registrant, MidCap Financial Trust, as administrative agent, and the Lenders listed therein

Second Amendment to Third Amended and Restated Credit and Security Agreement, by and among the Registrant, MidCap Financial Trust, as administrative agent, and the Lenders listed therein

Subordination Agreement, dated as of February 21, 2019, by and among the Registrant, MidCap Financial Trust, as administrative agent, and the Lenders listed therein

Note Purchase Agreement (including Form of Senior Subordinated Convertible Note), dated as of February 21, 2019, by and among the Registrant and the Purchasers listed therein

Note Purchase Agreement (including Form of Senior Subordinated Convertible Notes), dated as of February 21, 2019, by and among the Registrant and the Purchasers listed therein

Amendment No.

1 to Senior Subordinated Convertible Note, dated as of August 2, 2023, between the Registrant and the holders thereof

Securities Purchase Agreement, dated February 21, 2024, by and among the Registrant and the other parties thereto

Incorporated by Reference

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Supplement to License Agreement, by and between the Registrant and AffaMed Therapeutics Limited, dated as of January 18, 2021

Fourth Amended and Restated Credit and Security Agreement dated June 4, 2021 by and among the Registrant, MidCap Financial Trust, as administrative agent, and the Lenders listen therein

Credit and Security Agreement, dated August 2, 2023, by and among Barings Finance LLC, as administrative agent, the Registrant, and the Lenders listed therein

2021 Stock Incentive Plan, as amended

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1 to License Agreement, by and between the Registrant and AffaMed Therapeutics (HK) Limited, dated as of October 28, 2021

Consulting Agreement by and between the Registrant and Dr.

Michael Goldstein, dated as of June 7, 2022

Consulting Agreement by and between the Registrant and Dr.

Jeffrey Heier, dated as of October 17, 2022

Employment Agreement, by and between the Registrant and Rabia Ozden-Gurses, dated as of September 28, 2022

Employment Agreement, by and between the Registrant and Christopher White, dated as of October 13, 2022

Employment Agreement, by and between the Registrant and Dr.

Dugel, dated as of February 21, 2024

Incorporated by Reference

Description of Exhibit

Employment Agreement, by and between the Registrant and Christopher White, dated as of October 13, 2022

Employment Agreement, by and between the Registrant and Dr.

Sanjay Nayak, dated as of February 21, 2024

Subsidiaries of the Registrant

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§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ocular Therapeutix, Inc.

Compensation Recovery Policy

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document)

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/s/ Antony Mattessich

President and Chief Executive Officer

President, Chief Executive Officer and Director

Antony Mattessich

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(Principal Financial and Accounting Officer)

/s/ Charles Warden

Chairman of the Board

/s/ Pravin Dugel, M.D.

Executive Chairman of the Board of Directors

March 11, 2024

Charles Warden

/s/ Jeffrey S.

Pravin Dugel, M.D.

/s/ Adrienne Graves, Ph.D.

March 11, 2024

Adrienne Graves, Ph.D.

/s/ Seung Suh Hong, Ph.D.

8 unchanged sentences

Merilee Raines

/s/ Charles Warden

March 11, 2024

Charles Warden

/s/ Leslie Williams

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To the Board of Directors and Stockholders of Ocular Therapeutix, Inc.

Opinions on the Financial Statements

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ocular Therapeutix, Inc.

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated 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 three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of the Derivative Liability

As described in Notes 2, 10 and 11 to the consolidated financial statements, the Company’s derivative liability balance was $6.4 million as of December 31, 2022 and the change in fair value recorded in other income (expense), net was $13.8 million for the year ended December 31, 2022.

The derivative liability was recorded at fair value upon the

issuance of the 2026 convertible notes and is subsequently remeasured to fair value at each reporting period.

The derivative liability was initially valued and remeasured using a “with-and-without” method.

Valuation of the Convertible Notes Derivative Liability

As described in Notes 2, 10, and 11 to the consolidated financial statements, the Company’s Convertible Notes Derivative Liability balance was $17.6 million as of December 31, 2023 and the change in fair value recorded in other income (expense), net was $(4.5) million for the year ended December 31, 2023.

The Conversion Option Derivative Liability was recorded at fair value upon the issuance of the Convertible Notes and is subsequently remeasured to fair value at each reporting period.

The Conversion Option Derivative Liability was initially valued and remeasured using a “with-and-without” method.

The “with-and-without” methodology involves valuing the whole instrument on an as-is basis and then valuing the instrument without the embedded conversion option.

The difference between the entire instrument with the embedded conversion option compared to the instrument without the embedded conversion option is the fair value of the derivative, recorded as the derivative liability.

The difference between the entire instrument with the embedded

conversion option compared to the instrument without the embedded conversion option is the fair value of the derivative, recorded as the Conversion Option Derivative Liability.

The fair value of the Convertible Notes with and without the conversion option is estimated using a binomial lattice approach.

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Accounts receivable, net

Restricted cash

Prepaid expenses and other current assets

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Operating lease liabilities, net of current portion

Derivative liability

Derivative liabilities

Deferred revenue, net of current portion

Notes payable, net of discount

Notes payable, net

Other non-current liabilities

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Interest expense

Change in fair value of derivative liability

Change in fair value of derivative liabilities

Gains and losses on extinguishment of debt, net

Other income (expense), net

Total other (expense) income, net

Total other income, net

Net loss per share, basic

10 unchanged sentences

Issuance of common stock in connection with employee stock purchase plan

Issuance of common stock upon public offering, net of issuance costs

Issuance of common stock upon cashless exercise of warrant

Common stock issuance costs

Stock-based compensation expense

2 unchanged sentences

Issuance of common stock in connection with employee stock purchase plan

Issuance of common stock upon cashless exercise of warrant

Common stock issuance costs

Stock-based compensation expense

2 unchanged sentences

Issuance of common stock in connection with employee stock purchase plan

Issuance of common stock upon public offering, net of issuance costs

Issuance of common stock upon vesting of restricted stock units

Stock-based compensation expense

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Non-cash interest expense

Change in fair value of derivative liability

Change in fair value of derivative liabilities

Depreciation and amortization expense

Gains and losses on extinguishment of debt, net

Gain (loss) on disposal of property and equipment

2 unchanged sentences

Prepaid expenses and other current assets

Operating lease assets

Accounts payable

Operating lease assets

Accrued expenses

6 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of short-term bridge loan

Proceeds from issuance of Barings notes payable

Proceeds from issuance of notes payable, net

1 unchanged sentence

Proceeds from issuance of common stock pursuant to employee stock purchase plan

Proceeds from the Paycheck Protection Program Loan

Repayment of the Paycheck Protection Program Loan

Payments of debt financing costs

Proceeds from issuance of common stock upon public offering, net of issuance costs

Issuance costs from the issuance of common stock upon public offering

Issuance costs from the issuance of common stock upon public offering in prior period

Repayment of MidCap notes payable

Repayment of notes payable

Repayment of short-term bridge loan

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Additions to property and equipment included in accounts payable and accrued expenses

Public offering costs included in accounts payable and accrued expenses at balance sheet dates

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

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(the “Company”) was incorporated on September 12, 2006 under the laws of the State of Delaware.

The Company is a biopharmaceutical company focused on the formulation, development and commercialization of innovative therapies for diseases and conditions of the eye using its proprietary bioresorbable hydrogel-based formulation technology.

The Company’s mission is to build an ophthalmology-focused biopharmaceutical company that capitalizes on the gaps that the Company believes increasingly exist in the ophthalmology sector between single product companies and large, multi-product pharmaceutical companies.

The Company is a biopharmaceutical company committed to enhancing people’s vision and quality of life through the development and commercialization of innovative therapies for diseases and conditions of the eye, with a specific focus on retinal disease.

The Company’s program for retinal disease is led by AXPAXLI (axitinib intravitreal implant, also known as OTX-TKI), which is based on its ELUTYX proprietary bioresorbable hydrogel-based formulation technology.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations, regulatory approval and compliance, reimbursement, uncertainty of market acceptance of products and the need to obtain additional financing.

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The Company is currently commercializing DEXTENZA (dexamethasone insert) 0.4mg, an intracanalicular insert for the treatment of post-surgical ocular inflammation and pain and for the treatment of ocular itching associated with allergic conjunctivitis, in the United States.

The Company suspended the production of ReSure® Sealant, an ophthalmic device designed to prevent wound leaks in corneal incisions following cataract surgery, as of the fourth quarter of 2021 in order to focus our manufacturing resources on DEXTENZA.

Currently, ReSure Sealant is not commercially available in the United States, and we have received only limited revenues from ReSure Sealant to date.

The Company’s most advanced product candidates are in either Phase 1 or Phase 2 of clinical stage development.

The Company’s most advanced product candidate, AXPAXLI, formerly referred to as OTX-TKI, is in Phase 3 clinical development;

the Company’s other advanced product candidates are in either Phase 1 or Phase 2 clinical development.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval and adequate reimbursement or that any approved products will be commercially viable.

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As of December 31, 2023, the Company had an accumulated deficit of $ 697,578 .

Based on its current operating plan which includes estimates of anticipated cash inflows from product sales and cash outflows from operating expenses, the Company believes that its existing cash and cash equivalents of $ 102,300 as of December 31, 2022 will enable it to fund its planned operating expenses, debt service obligations and capital expenditures at least through the next 12 months from the issuance date of these consolidated financial statements.

The future viability of the Company beyond that point is dependent on its ability to generate cash flows from the sale of DEXTENZA and raise additional capital to finance its operations.

Based on its current operating plan which includes estimates of anticipated cash inflows from product sales and cash outflows from operating expenses and capital expenditures, the Company believes that its existing cash and cash equivalents of $ 195,807 as of December 31, 2023, plus the cash received from a private placement of the Company’s common stock in February 2024 of $ 325,000 before deducting placement agent fees and other offering expenses, will enable it to fund its planned operating expenses, debt service obligations and capital expenditures at least through the next 12 months from the issuance date of these consolidated financial statements while the Company observes a minimum liquidity covenant of $ 20,000 in its credit facility (Note 9).

The future viability of the Company beyond that point is dependent on the Company’s ability to generate cash flows from the sale of DEXTENZA and raise additional capital to finance its operations.

The Company will need to finance its operations through public or private securities offerings, debt financings, collaborations, strategic alliances, licensing agreements, royalty agreements, or marketing and distribution agreements.

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These customers then subsequently resell DEXTENZA to physicians, clinics and certain medical centers or hospitals.

The Company also sells DEXTENZA directly to a small population of ambulatory surgery centers, or ASCs, based on individually negotiated direct distribution agreements (the “Direct Customers”).

The Company also sells DEXTENZA directly to a small population of ambulatory surgery centers (“ASCs”) based on individually negotiated direct distribution agreements (the “Direct Customers”).

In addition, the Company enters into arrangements with health care providers and payors that provide for government mandated or privately negotiated rebates and chargebacks with respect to the purchase of DEXTENZA.

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Department of Veterans Affairs hospitals and entities that are subject to the U.S.

federal government 340B Drug Discount Program entities at prices lower than the list prices charged to SDs and Direct Customers.

federal government 340B Drug Discount Program at prices lower than the list prices charged to SDs and Direct Customers.

Chargeback amounts are generally determined at the time of resale to the qualified government healthcare provider by SDs and Direct Customers, and the Company generally issues credits for such amounts within a few weeks of the customer’s notification to the Company of the resale.

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If not, the option is considered a marketing offer which would be accounted for as a separate contract upon the customer’s election.

The Company considers the existence of any significant financing component within its arrangements based on whether a substantive business purposes exist to support the payment structure other than to provide a significant benefit of financing.

The Company considers the existence of any significant financing component within its arrangements based on whether a substantive business purpose exists to support the payment structure other than to provide a significant benefit of financing.

The Company measures the transaction price based on the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods and/or services to the customer.

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With respect to arrangements that include payments for a development or regulatory milestone payment, the Company evaluates whether the associated event is considered likely of achievement and estimates the amount to be included in the transaction price using the most likely amount method.

Milestone payments that are not within the Company’s control or the licensee, such as those dependent upon receipt of regulatory approval, are not considered to be likely of achievement until the triggering event occurs.

At the end of each reporting period, the Company re-evaluates the probability of achievement of each milestone and any related constraint, and if necessary, adjust its estimate of the overall transaction price.

Any such adjustments are recorded on a

cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment.

Milestone payments that are not within the Company’s control or the control of the licensee, such as those dependent upon receipt of regulatory approval, are not considered to be likely of achievement until the triggering event occurs.

At the end of each reporting period, the Company re-evaluates the probability of achievement of each milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments

are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, wherein the license is deemed to be the sole or predominant item to which the payments relate, the Company recognizes revenue upon the later of:

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In other cases, the Company accounts for an embedded derivative separately.

The Company measures the value of embedded derivatives that are accounted for separately at their respective fair values and recognizes changes in the respective estimated fair values in other income (expense), net in the consolidated statements of operations and comprehensive loss during the period of change.

Embedded derivatives that are accounted for separately are recognized as derivative liabilities in the Company’s consolidated balance sheet.

The Convertible Notes, as discussed in Note 9, allow the holders to convert all or part of the outstanding principal of their Convertible Notes into shares of the Company’s common stock provided that no conversion results in a holder beneficially owning more than 19.99 % of the issued and outstanding common stock of the Company.

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Therefore, the entire conversion option is bifurcated from the underlying debt instrument and accounted for and valued separately from the host instrument.

The Company measures the value of the embedded conversion option at its estimated fair value and recognizes changes in the estimated fair value in other income (expense), net in the consolidated statements of operations and comprehensive loss during the period of change.

The embedded conversion is recognized as a derivative liability in the Company’s consolidated balance sheet.

The Barings Credit Agreement, as discussed in Note 9, contains an embedded obligation to pay a royalty fee that meets the criteria to be bifurcated and accounted for separately from the Barings Credit Facility, as discussed in Note 9, subject to derivative accounting.

The main inputs when determining the fair value of the derivative liability are the amount and timing of our expected future revenue, the estimated volatility of these revenues, and the discount rate corresponding to the risk of revenue.

Property and Equipment

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Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or

economic trends, and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value.

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The Company records accruals for estimated ongoing research and development costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received, estimates provided by vendors, and contracted costs.

Judgments and estimates are made in determining the accrued balances at the end of any reporting period.

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Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable

income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.

tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements.

If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements.

The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

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Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders.

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

For the years ended December 31, 2023, 2022 and 2021, there were no items that gave rise to other comprehensive loss and therefore, there was no difference between net loss and comprehensive loss.

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In the diluted net loss per share calculation, net loss would also be adjusted for the elimination of interest expense on convertible debt securities and the mark-to-market gain or loss on bifurcated conversion options, if the impact was not anti-dilutive.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No.

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) (“ASU 2020-06”).

This standard amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related earnings per share guidance for both Subtopics.

The amendments in the ASU are effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company adopted this accounting pronouncement as required effective January 1, 2022 and its adoption did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB and adopted by us as of the specified effective date.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and adopted by the Company as of the specified effective date.

The Company believes that recently issued accounting pronouncements that are not yet effective will not have a material impact on our consolidated financial statements and disclosures.

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Incept License Agreement (in-licensing)

On September 13, 2018, the Company entered into a second amended and restated license agreement (the “Second Amended Agreement”) with Incept, LLC (“Incept”) to use and develop certain intellectual property (the “Incept License”).

Under the Incept License, as amended and restated, the Company was granted a worldwide, perpetual, exclusive license to develop and commercialize products that are delivered to or around the human eye for diagnostic, therapeutic or prophylactic purposes relating to ophthalmic diseases or conditions.

On September 13, 2018, the Company entered into a second amended and restated license agreement with Incept, LLC (“Incept”) to use and develop certain intellectual property (the “Incept License”).

Under the Incept License, as amended and restated, the Company was granted a worldwide, perpetual, exclusive license to use specific Incept technology to develop and commercialize products that are delivered to or around the human eye for diagnostic, therapeutic or prophylactic purposes relating to ophthalmic diseases or conditions.

The Company is obligated to pay low single-digit royalties on net sales of commercial products developed using the licensed technology, commencing with the date of the first commercial sale of such products and until the expiration of the last to expire of the patents covered by the license.

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AffaMed License Agreement (out-licensing)

On October 29, 2020, the Company entered into license agreement (“License Agreement”) with AffaMed Therapeutic Limited (“AffaMed”) for the development and commercialization of the Company’s DEXTENZA product regarding ocular inflammation and pain following cataract surgery and allergic conjunctivitis (collectively, the “DEXTENZA Field”) and for the Company’s OTX-TIC product candidate (collectively with DEXTENZA, the “AffaMed Licensed Products”) regarding open-angle glaucoma or ocular hypertension (collectively, the “TIC Field” and, with the DEXTENZA Field, each a “Field”), in each case in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the countries of the Association of Southeast Asian Nations (collectively, the “Territories”).

On October 29, 2020, the Company entered into a license agreement (“License Agreement”) with AffaMed Therapeutic Limited (“AffaMed”) for the development and commercialization of the Company’s DEXTENZA product regarding ocular inflammation and pain following cataract surgery and allergic conjunctivitis (collectively, the “DEXTENZA Field”) and for the Company’s PAXTRAVA, formerly known as OTX-TIC, product candidate (collectively with DEXTENZA, the “AffaMed Licensed Products”) regarding open-angle glaucoma or ocular hypertension (collectively, the “TIC Field” and, with the DEXTENZA Field, each a “Field”), in each case in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the countries of the Association of Southeast Asian Nations (collectively, the “Territories”).

The Company retains development and commercialization rights for the AffaMed Licensed Products in the rest of the world.

Under the License Agreement, the Company received a non-refundable upfront payment of $ 12,000 in December 2020, a $ 1,000 milestone in the fourth quarter of 2021 and a $ 2,000 clinical support payment in the second quarter of 2022.

Under the License Agreement, the Company received a non-refundable upfront payment of $ 12,000 in December 2020, a $ 1,000 milestone in the fourth quarter of 2021, a $ 2,000 clinical support payment in the second quarter of 2022, and a $ 1,000 milestone payment in the second quarter of 2023.

The Company is also eligible to receive up to an additional $ 87,000 in aggregate upon the achievement of certain regulatory, development and commercial milestones.

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Either party may also terminate the License Agreement under specified circumstances relating to the other party’s insolvency.

AffaMed has the right to terminate the License Agreement at any time after completion of a Phase 3 clinical trial for OTX-TIC for any or no reason upon providing the Company three months’ notice.

During an established period following its change of control or its entry into a global

licensing agreement that includes the Territories with a third party, the Company has the option to terminate the License Agreement, subject to a specified notice period and the repayment of any costs and expenses incurred by AffaMed in connection with the License Agreement, including upfront and milestone payments AffaMed has previously paid to the Company, at a prespecified premium.

AffaMed has the right to terminate the License

Agreement at any time after completion of a Phase 3 clinical trial for PAXTRAVA for any or no reason upon providing the Company three months’ notice.

During an established period following its change of control or its entry into a global licensing agreement that includes the Territories with a third party, the Company has the option to terminate the License Agreement, subject to a specified notice period and the repayment of any costs and expenses incurred by AffaMed in connection with the License Agreement, including upfront and milestone payments AffaMed has previously paid to the Company, at a prespecified premium.

The Company concluded that AffaMed is a customer in this arrangement, and as such, the arrangement falls within the scope of the revenue recognition guidance in ASC 606.

1 unchanged sentence

● the license, regulatory filings and manufacturing of DEXTENZA (the “DEXTENZA Field performance obligation”);

● the license, regulatory filings and manufacturing for the Company’s OTX-TIC product candidate regarding open-angle glaucoma or ocular hypertension in the Territories (the “OTX-TIC Field performance obligation”);

● the conduct of a Phase 2 clinical trial of OTX-TIC (the “Phase 2 Clinical Trial of OTX-TIC performance obligation”);

● obligations to participate on various joint research, development and project committees;

the Company has concluded that this performance obligation is not material.

● the license, regulatory filings and manufacturing for the Company’s PAXTRAVA product candidate regarding open-angle glaucoma or ocular hypertension in the Territories (the “PAXTRAVA Field performance obligation”);

● the conduct of a Phase 2 clinical trial of PAXTRAVA (the “Phase 2 Clinical Trial of PAXTRAVA performance obligation”);

● obligations to participate on various joint research, development and project committees, which the Company has concluded is not a material performance obligation.

The transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation.

5 unchanged sentences

Furthermore, under the expected value method the Company excluded the potential royalties from the transaction price.

We recognize revenue related to the amounts allocated to the DEXTENZA Field performance obligation and the OTX-TIC Field performance obligation based on the point in time upon which control of supply is transferred to AffaMed for each delivery of the associated supply.

We recognize revenue related to the amounts allocated to the DEXTENZA Field performance obligation and the PAXTRAVA Field performance obligation based on the point in time upon which control of supply is transferred to AffaMed for each delivery of the associated supply.

The Company currently expects to recognize the revenue over a period of approximately seven to eight years commencing on the date the Company begins delivering product to AffaMed.

This estimate of this period considers the timing of development and commercial activities under the License Agreement and may be reduced or increased based on the various activities as directed by the joint committees, decisions made by AffaMed, regulatory feedback or other factors not currently known.

The Company recognized $ 1,037 , $ 0 and $ 0 of collaboration revenue related to the Phase 2 Clinical Trial of OTX-TIC performance obligation for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, the aggregate amount of the transaction price allocated to the partially unsatisfied Phase 2 Clinical Trial of OTX-TIC performance obligation was $ 963 .

The Company recognized $ 573 , $ 1,037 and $ 0 of collaboration revenue related to the Phase 2 Clinical Trial of PAXTRAVA performance obligation for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the aggregate amount of the transaction price allocated to the partially unsatisfied Phase 2 Clinical Trial of PAXTRAVA performance obligation was $ 390 .

This amount is expected to be recognized as this performance obligation is satisfied through June 2025.

22 unchanged sentences

The Company is also no longer obligated to reimburse Regeneron for certain development costs, up to an aggregate amount of $ 30,000 in certain circumstances, were Regeneron to have exercised the Option.

For the years ended December 31, 2022, 2021 and 2020, the Company had recorded $ 0 , $ 768 and $ 1,256 related to work performed for preclinical development activities in connection with the revised work plan which the Company has recorded as a reduction of research and development expense as this research is not an output of the Company’s ordinary business activities.

For the years ended December 31, 2023, 2022 and 2021, the Company had recorded $ 0 , $ 0 and $ 768 related to work performed for preclinical development activities in connection with the revised work plan which the Company has recorded as a reduction of research and development expense as this research is not an output of the Company’s ordinary

business activities.

As of December 31, 2023 and 2022, the Company had not recorded any assets or liabilities with regard to the Regeneron Collaboration Agreement.

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Cash and cash equivalents

Restricted cash

Restricted cash (current)

Restricted cash (non-current)

Total cash, cash equivalents and restricted cash as shown on the statements of cash flows

As of December 31, 2022, 2021 and 2020, the Company held restricted cash of $ 1,764 , respectively, on its consolidated balance sheet.

The Company held restricted cash as security deposits for its real estate leases.

12 unchanged sentences

The Company’s leases have remaining lease terms ranging from less than 1 year to approximately 4.5 years.

Certain leases include one or more options to renew , exercised at the Company’s sole discretion, with renewal terms that can extend the lease term from one year to six years .

All of the Company’s leases qualify as operating leases.

The lease for the Company’s 20,445 square feet of manufacturing space located at 36 Crosby Drive in Bedford, Massachusetts commenced on June 30, 2018 and is scheduled to expire on July 31, 2023.

On October 18, 2022, the

Company exercised its option to extend the lease agreement by an additional five -year term, resulting in a new expiration date of July 31, 2028.

Under the terms of the existing lease, rent for the five -year extension period will be based on the current fair market rent for comparable space in the building and in other similar buildings in the same rental market as of August 1, 2023, the commencement date of the additional five -year term.

We have estimated the prevailing market rental rates at the time when we exercised the renewal option, and have included these in our remeasurement of the operating lease asset and the lease liability.

This has resulted in an increase of the Operating lease assets and Operating lease liabilities of $ 4,284 as of the remeasurement date.

As this is an estimate for variable payments that depend on an index or a rate, we will not remeasure the payments for the five -year renewal period even if actual rent as of the commencement date of the five -year extension term, August 1, 2023, is different from our estimate.

The lease for approximately 70,712 square feet of general office, research and development and manufacturing space located at 15 Crosby Drive in Bedford, Massachusetts.

The lease for the Company’s 20,445 square feet of manufacturing space located at 36 Crosby Drive in Bedford, Massachusetts commenced on June 30, 2018.

On October 18, 2022, the Company exercised its option to extend the lease agreement by an additional five -year term, resulting in a new expiration date of July 31, 2028.

Under the terms of the existing lease, rent for the five -year extension period was based on the current fair market rent for comparable space in the building and in other similar buildings in the same rental market as of August 1, 2023, the commencement date of the additional five -year term.

The Company estimated the prevailing market rental rates at the time when the Company exercised the renewal option and included these in the remeasurement of the operating lease asset and the lease liability.

This resulted in an increase of the operating lease assets and operating lease liabilities of $ 4,284 as of the remeasurement date.

As this is an estimate for variable payments that depend on an index or a rate, the Company has not remeasured the payments for the five -year renewal period as of the commencement date of the five -year extension term.

On June 30, 2023, the Company and the landlord executed an amendment to this lease, formally extending the term of the lease through July 31, 2028.

This lease does not include any additional renewal options.

The lease is for approximately 70,712 square feet of general office, research and development and manufacturing space located at 15 Crosby Drive in Bedford, Massachusetts.

The lease term commenced on February 1, 2017 and will expire on July 31, 2027.

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Accrued expenses consisted of the following:

Accrued interest payable on Convertible Notes (Note 9)

Accrued payroll and related expenses

Accrued rebates and programs

Accrued professional fees

Accrued research and development expenses

Accrued interest payable on 2026 convertible notes

Accrued interest payable on Barings Credit Facility (Note 9)

Accrued professional fees

Accrued other

Financial Liabilities

Barings Credit Agreement

On August 2, 2023 (the “Closing Date”), the Company entered into a credit and security agreement (the “Barings Credit Agreement”) with Barings Finance LLC (“Barings”), as administrative agent, and the lenders party thereto, providing for a secured term loan facility for the Company (the “Barings Credit Facility”) in the aggregate principal amount of $ 82,474 (the “Total Credit Facility Amount”).

The Company borrowed the full amount of $ 82,474 at closing and received proceeds of $ 77,290 , after the application of an original issue discount and fees.

Indebtedness under the Barings Credit Facility matures on the earlier to occur of (i) the six-year anniversary of the Closing Date and (ii) the date that is 91 days prior to the maturity date for the Company’s Convertible Notes (as defined below).

Indebtedness under the Barings Credit Facility incurs interest based on the Secured Overnight Financing Rate (“SOFR”), subject to a minimum 1.50 % floor, plus 6.75 %.

The Company is obligated to make interest payments on its indebtedness under the Barings Credit Facility on a monthly basis, commencing on the Closing Date;

to pay annual administration fees;

and to pay, on the maturity date, any principal and accrued interest that remains outstanding as of such date.

In addition, the Company is obligated to pay a fee in an amount equal to the Total Credit Facility Amount, which amount shall be reduced by the total amount of interest and principal prepayment fees paid under the Barings Credit Agreement (such fee, the “Barings Royalty Fee”).

The Company is required to pay the Barings Royalty Fee in installments to Barings, for the benefit of the lenders, on a quarterly basis in an amount equal to three and one-half percent ( 3.5 %) of the net sales of DEXTENZA occurring during such quarter, subject to the terms, conditions and limitations specified in the Barings Credit Agreement, until the Barings Royalty Fee is paid in full.

The Barings Royalty Fee is due and payable upon a change of control of the Company.

In the event the Company completes a change of control transaction or a sale of all or substantially all of its assets on or prior to the twelve-month anniversary of the Closing Date, the Barings Royalty Fee is subject to a reduction to an amount that is equal to (i) 20 % of the Total Credit Facility Amount, in the event that a signed letter of intent evidencing such transaction was entered into by the Company on or prior to the date that is six months after the Closing Date and (ii) 30 % of the Total Credit Facility Amount, in the event that a signed letter of intent evidencing such transaction was entered into by the Company after the date that is six months, but before the date that is twelve months, after the Closing Date.

The Company may, at its option, prepay any or all of the Barings Royalty Fee at any time without penalty.

In connection with the Barings Credit Agreement, the Company granted the lenders thereto a

first-priority security interest in all assets of the Company, including its intellectual property, subject to certain agreed-upon exceptions.

The Barings Credit Agreement includes negative covenants restricting the Company from making payments to the holders of the Convertible Notes, except in connection with a proposed conversion to equity and with respect to certain permitted expenses and requiring the Company to maintain a minimum liquidity amount of $ 20,000 .

The Barings Credit Agreement also includes customary affirmative and negative covenants.

The Company determined that the embedded obligation to pay the Barings Royalty Fee (the “Barings Royalty Fee Obligation”) is required to be separated from the Barings Credit Facility and accounted for as a freestanding derivative instrument subject to derivative accounting.

The allocation of proceeds to the Barings Royalty Fee Obligation resulted in a discount on the Barings Credit Facility.

The Company is amortizing the discount to interest expense over the term of the Barings Credit Facility using the effective interest method.

Accrued or paid Barings Royalty Fees are included in the change in fair value of derivative liabilities on the consolidated statements of operations and comprehensive loss.

For the year ended December 31, 2023, Barings Royalty Fees were $ 901 .

A summary of the Barings Credit Facility at December 31, 2023 is as follows:

Barings Credit Facility

unamortized discount

As of December 31, 2023, the full principal for the Barings Credit Facility of $ 82,474 was due for repayment in 2029.

Convertible Notes

On March 1, 2019, the Company issued $ 37,500 of convertible notes which accrue interest at an annual rate of 6 % of their outstanding principal amount, which is payable, along with the principal amount at maturity, on March 1, 2026, unless earlier converted, repurchased or redeemed (the “2026 Convertible Notes”).

The Company presents accrued interest in accrued current liabilities because the notes are currently convertible and the interest is payable in cash.

The effective annual interest rate for the 2026 Convertible Notes was 14.8 % through December 31, 2022.

On March 1, 2019, the Company issued $ 37,500 of convertible notes which accrue interest at an annual rate of 6 % of their outstanding principal amount, which is payable, along with the principal amount at maturity, unless earlier converted, repurchased or redeemed (as amended the “Convertible Notes”).

Concurrently with entering into the Barings Credit Agreement, on August 2, 2023, the Company and the holders of the Convertible Notes extended the maturity of the Convertible Notes, which would otherwise have matured on March 1, 2026, to a date 91 days following the maturity of the indebtedness under the Barings Credit Facility, unless earlier converted, repurchased or redeemed (the “Amendment”).

The Company accounted for the Amendment as an extinguishment of debt in accordance with the guidance in Accounting Standards Codification Topic 470-50 Debt (“ASC 470-50”) and derecognized all liabilities related to the Convertible Notes, including the outstanding principal less unamortized discount, a derivative liability, and accrued interest, with a total carrying value of $ 51,090 as of the date of the Amendment.

The Company determined that, after the Amendment, the embedded conversion option continues to be required to be separated from the Convertible Notes and accounted for the embedded conversion option as a freestanding derivative instrument subject to derivative accounting (the “Conversion Option Derivative Liability”).

The total fair value of the Convertible Notes on August 2, 2023 after the Amendment, including the conversion option, was $ 36,183 .

The Company recognized the Convertible Notes and the Conversion Option Derivative Liability after the Amendment at their fair values as of the date of the Amendment of $ 18,482 and $ 17,701 , respectively.

A portion of the fair value of the Convertible Notes as of the date of the Amendment of $ 9,943 is presented in accrued expenses and other current liabilities on the consolidated balance sheets because the Convertible Notes are currently convertible, and this amount represents interest that was accrued before the Amendment and that would be payable in cash upon conversion.

The allocation of a portion of the total fair value of the Convertible Notes to the Conversion Option Derivative Liability results in a discount on the Convertible Notes.

Application of ASC 470-50 resulted in a gain on extinguishment of $ 14,907 , which was charged to gains and losses on extinguishment of debt, net on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

The holders of the Convertible Notes may convert all or part of the outstanding principal amount of their Convertible Notes into shares of the Company’s common stock, par value $ 0.0001 per share, prior to maturity and provided that no conversion results in a holder beneficially owning more than 19.99 % of the issued and outstanding common stock of the Company.

13 unchanged sentences

The “Specified Dollar Amount” is defined as the maximum cash amount per $ 1,000 principal amount of Notes to be received upon conversion as specified in the notice specifying the Company’s chosen settlement method.

In the event of a Corporate Transaction, the noteholder shall have the right to either (a) convert all of the unpaid principal at the conversion rate and receive a cash payment equal to (i) the outstanding accrued but unpaid interest under the 2026 Convertible Note to, but excluding, the corporate transaction conversion date (to the extent such date occurs prior to March 1, 2026, the maturity date of the 2026 Convertible Notes) plus (ii) and an additional amount of consideration based on a sliding scale depending on the date of such as Corporate transaction or (b) require the Company to repurchase all or part of the outstanding principal amount of such 2026 Convertible Note at a repurchase price equal to 100 % of the outstanding principal amount of the 2026 Convertible Note to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

In the event of a Corporate Transaction, the noteholder shall have the right to either (a) convert all of the unpaid principal at the conversion rate and receive a cash payment equal to (i) the outstanding accrued but unpaid interest under the Convertible Note to, but excluding, the corporate transaction conversion date (to the extent such date occurs prior to a date 91 days following the maturity of the indebtedness under the Barings Credit Facility, the maturity date of the Convertible Notes) plus (ii) and an additional amount of consideration based on a sliding scale depending on the date of such as Corporate transaction or (b) require the Company to repurchase all or part of the outstanding principal amount of such Convertible Note at a repurchase price equal to 100 % of the outstanding principal amount of the Convertible Note to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

A corporate transaction includes (i) a merger or consolidation executed through a tender offer or change of control (other than one in which stockholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring corporation);

6 unchanged sentences

The Company is amortizing the discount to interest expense over the term of the Convertible Notes using the effective interest method.

The Company presents accrued interest in accrued current liabilities because the notes are currently convertible and the interest is payable in cash.

The effective annual interest rate for the Convertible Notes was 19.4 %, 14.8 %, and 14.8 % for the years ended December 31, 2023, 2022, and 2021, respectively.

A summary of the Convertible Notes at December 31, 2023 and 2022 is as follows:

Convertible Notes

unamortized discount

unamortized discount and current portion

Interest recognized with regard to the Convertible Notes was as follows:

Year Ended December 31,

Coupon Interest

Amortization of discount

Notes Payable

The Company entered into a credit and security agreement in 2014 (as amended to date, the “Credit Agreement”) establishing the Company’s credit facility (the “Credit Facility”).

In December 2018, the Company’s total indebtedness under the Credit Facility was increased to $ 25,000 .

The Company was required to make interest-only payments under the Credit Facility until December 2020.

Commencing in January 2021, the Company was required to make 36 equal monthly installments of principal in the amount of $ 694 , plus interest, through December 2023.

Amounts borrowed under the Credit Facility were at LIBOR base rate, subject to 2.00 % floor, plus 7.25 %.

Prior to the Fourth Amendment (as defined below), the effective interest rate was 9.25 % .

In June 2021, the Company entered into a Fourth Amended and Restated Credit and Security Agreement (the “Fourth Amendment”) to amend the terms of its debt with existing lenders for total indebtedness of $ 20,833 and borrowed an incremental $ 4,167 , for a total of $ 25,000 (the “2021 Amended Credit Facility”).

The Company is required to make interest-only payments under the 2021 Amended Credit Facility through April 2024.

Commencing in May 2024, the Company is required to make 19 equal monthly installments of principal in the amount of $ 1,042 , plus interest, then on the maturity date, November 30, 2025 the remaining balance of $ 5,208 plus the exit fee, as defined below.

In the event the Company achieves certain milestones under the 2021 Amended Credit Facility, the Company has the right to extend through April 1, 2026 and make 5 equal monthly installments of principal in the amount of $ 1,042 , plus interest.

The Company has not assumed the achievement of these milestones for purposes of disclosures herein.

Amounts borrowed under the 2021 Amended Credit Facility are at LIBOR base rate, subject to 1.00 % floor, plus 6.75 %.

The interest rate on the date of the amendment was 8.8 %.

In addition, a final payment (exit fee) equal to 3.5 % of amounts drawn under the Amended Credit Facility, or $ 875 based on borrowings of $ 25,000 , is due upon the maturity date of November 30, 2025.

The Company is accruing the exit fee through November 30, 2025.

The Company entered into a credit and security agreement in 2014 (as amended, the “MidCap Credit Agreement”) establishing a credit facility (as amended, the “MidCap Credit Facility”).

The Company satisfied its obligations under the MidCap Credit Agreement in August 2023, as discussed below.

In connection with its satisfaction of its obligations, the Company extinguished the MidCap Credit Facility, and all liens and security interests securing the indebtedness under the MidCap Credit Agreement were released.

Under the Fourth Amendment, the Company was required to make interest-only payments through April 2024.

Commencing in May 2024, the Company was required to make 19 equal monthly installments of principal in the amount of $ 1,042 , plus interest, then on the maturity date, November 30, 2025 the remaining balance of $ 5,208 plus the exit fee, as defined below.

Amounts borrowed under the MidCap Credit Facility based on the Fourth Amendment were initially at LIBOR base rate, subject to 1.00 % floor, plus 6.75 %.

In addition, a final payment (exit fee) equal to 3.5 % of amounts drawn under the MidCap Credit Facility, or $ 875 based on borrowings of $ 25,000 , was due upon the maturity date of November 30, 2025.

The Company had accrued the exit fee through November 30, 2025.

The Company accounted for the Fourth Amendment as a modification in accordance with the guidance in ASC 470-50 Debt .

Amounts paid to the lenders were recorded as debt discount and a new effective interest rate was established.

The effective annual interest rate of the outstanding debt under the Fourth Amendment is 8.8 % .

There are no financial covenants associated with the Fourth Amendment.

However, the Fourth Amendment does contain negative covenants restricting the Company’s activities, including limitations on dispositions, mergers or acquisitions;

encumbering its intellectual property;

incurring indebtedness or liens;

paying dividends;

making certain investments;

and engaging in certain other business transactions.

As of December 31, 2022, the Company was not in violation of any of its covenants under the Fourth Amendment.

The obligations under the Fourth Amendment are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in the Company’s business, operations or financial or other condition.

The debt is collateralized by substantially all of the Company’s assets, including its intellectual property.

In accordance with the Credit Agreement, in connection with the Company’s desire to issue and sell the 2026 Convertible Notes, the Company amended the terms of its debt with existing lenders in February 2019.

The amendment added to the Credit Agreement, among other provisions, a negative covenant restricting the Company from paying the holders of the 2026 Convertible Notes ahead in priority to the existing lenders, for so long as indebtedness remains outstanding under the Credit Facility, and a cross-default provision to establish that an event of default under the purchase agreement for the 2026 Convertible Notes also constitutes an event of default under the Credit Agreement.

The Company has a total borrowing capacity of $ 25,000 under the 2021 Amended Credit Facility, which was fully drawn down as of December 31, 2022.

Borrowings outstanding are as follows:

On March 12, 2023, the Company requested, and received, a protective advance of $ 2,000 under the MidCap Credit Agreement as a short-term bridge loan in response to the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation.

This protective advance was deemed a credit extension.

The Company repaid the full principal amount of $ 2,000 in March 2023.

On March 31, 2023, the Company entered into Amendment No.

1 to the MidCap Credit Agreement (“Amendment No.

1”) to replace the LIBOR-based interest rate provisions of the MidCap Credit Agreement with interest rate provisions based on SOFR, establish a benchmark replacement mechanism and make additional administrative updates.

The Company accounted for Amendment No.

1 as a modification in accordance with the guidance in ASC 470-50 Debt .

Application of the modification accounting guidance did not have a material effect on the carrying amount of the long-term notes payable.

On May 4, 2023, the Company entered into Amendment No.

2 to the MidCap Credit Agreement (“Amendment No.

Amendment No.

2 provided that the Company may maintain up to 50 % of its consolidated cash and cash equivalents with banks or financial institutions other than Silicon Valley Bank and made additional administrative updates.

As of December 31, 2022, the Company had a total borrowing capacity of $ 25,000 under the MidCap Credit Facility, which was fully drawn down.

In August 2023, in connection with the Company’s establishment of the Barings Credit Facility, the Company paid an aggregate of $ 26,157 to MidCap Financial Trust and the other lenders party to the MidCap Credit Agreement, comprised of $ 25,017 in principal and interest accrued thereunder and $ 1,140 in exit and prepayment fees, in satisfaction of the Company’s obligations under the MidCap Credit Agreement.

In connection with the payment, all liens and security interests securing the indebtedness under the MidCap Credit Agreement were released.

The extinguishment of the MidCap Credit Facility has resulted in a loss of $ 717 , which was charged to gains and losses on extinguishment of debt, net on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

Borrowings outstanding were as follows:

Borrowings outstanding

2 unchanged sentences

Long-term notes payable

As of December 31, 2022, the annual repayment requirements for the Credit Facility, inclusive of the final payment of $ 875 due at expiration, were as follows:

Year Ending December 31,

Final Payment

Derivative Liability

The 2026 Convertible Notes (Note 9) contain an embedded conversion option that meets the criteria to be bifurcated and accounted for separately from the 2026 Convertible Notes (the "Derivative Liability").

The Derivative Liability was recorded at fair value upon the issuance of the 2026 Convertible Notes and is subsequently remeasured to fair value at each reporting period.

The 2026 Convertible Notes, including the Derivative Liability, were initially valued and are remeasured using a "with-and-without"

The "with-and-without"

methodology involves valuing the whole instrument on an as-is basis and then valuing the 2026 Convertible Notes without the embedded conversion option.

Barings Credit Agreement

The Barings Credit Agreement (Note 9) contains an embedded Royalty Fee Obligation that meets the criteria to be bifurcated and accounted for separately from the Barings Credit Facility (the "Royalty Fee Derivative Liability").

The Royalty Fee Derivative Liability was recorded at fair value upon the entering into the Barings Credit Facility and is subsequently remeasured to fair value at each reporting period.

The Royalty Fee Derivative Liability was initially valued and is remeasured using a “with-and-without” method.

The “with-and-without” methodology involves valuing the whole instrument on an as-is basis with the embedded Royalty Fee Obligation and then valuing the instrument without the embedded Royalty Fee Obligation.

Royalty payments are estimated using a Monte Carlo simulation.

Refer to Note 11 for details regarding the determination of fair value.

A roll forward of the derivative liability is as follows:

A roll-forward of the Royalty Fee Derivative Liability is as follows:

Balance at August 2, 2023

Change in fair value

Balance at December 31, 2023

Convertible Notes

The Convertible Notes (Note 9) contain the Conversion Option Derivative Liability, an embedded conversion option that meets the criteria to be bifurcated and accounted for separately from the Convertible Notes.

The Conversion Option Derivative Liability was recorded at fair value upon the issuance of the Convertible Notes and is subsequently remeasured to fair value at each reporting period.

The Conversion Option Derivative Liability was initially valued and

are remeasured using a “with-and-without” method.

The “with-and-without” methodology involves valuing the whole instrument on an as-is basis with the embedded conversion option and then valuing the instrument without the embedded conversion option.

Refer to Note 11 for details regarding the determination of fair value.

A roll-forward of the Conversion Option Derivative Liability, including the impact from accounting for the Convertible Notes Amendment, is as follows:

Balance at December 31, 2021

Change in fair value

1 unchanged sentence

Change in fair value

Change in fair value from Convertible Notes Amendment

Balance at December 31, 2023

3 unchanged sentences

On January 29, 2021, holders of warrants to purchase 18,939 shares of common stock at an exercise price of $ 7.92 exercised their right to purchase their warrants.

The exercise price of the warrants was paid through a net

share settlement mechanism and as a result the Company issued 11,737 shares of common stock to satisfy the exercise of all the warrants.

The exercise price of the warrants was paid through a net share settlement mechanism and as a result the Company issued 11,737 shares of common stock to satisfy the exercise of all the warrants.

There are no warrants outstanding as of December 31, 2023 and 2022, respectively.

2 unchanged sentences

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company has all cash and cash equivalents balances at one accredited financial institution, in amounts that exceed federally insured limits.

The Company has its cash and cash equivalents balances at two accredited financial institutions, in amounts that exceed federally insured limits.

The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company is dependent on a small number of third-party manufacturers to supply products for research and development activities in its preclinical and clinical programs and for sales of its products.

The Company’s development programs as well as revenue from future sales of its product sales could be adversely affected by a significant interruption in the supply of any of the components of these products.

For the year ended December 31, 2022, three specialty distributor customers accounted for 44 %, 25 % and 17 % of the Company’s total revenue, and at December 31, 2022, three specialty distributor customers accounted for 52 %, 24 % and 15 % of the Company’s total accounts receivable.

No other customer accounted for more than 10% of total revenue for the year ended December 31, 2022, or accounts receivable at December 31, 2022.

For the year ended December 31, 2021, three specialty distributor customers accounted for 42 %, 26 % and 17 % of the Company’s total revenue, and at December 31, 2021 and three specialty distributor customers accounted for 42 %, 26 % and 21 % of the Company’s total accounts receivable.

No other customer accounted for more than 10% of total revenue for the year ended December 31, 2022, or accounts receivable at December 31, 2021.

For the year ended December 31, 2020, three specialty distributor customers accounted for 42 %, 29 % and 12 % of the Company’s total revenue.

The Company’s development programs as well as revenue from future product sales could be adversely affected by a significant interruption in the supply of any of the components of these products.

Three specialty distributor customers accounted for the following percentages of the Company’s total revenue:

Three specialty distributor customers accounted for the following percentages of the Company’s accounts receivables:

Change in Fair Value of Derivative Liabilities

Other income (expenses) from the change in the fair values of derivative liabilities as presented on the Company’s consolidated statements of operations and comprehensive loss includes the following:

Change in the fair value of the Conversion Option Derivative Liability

Change in the fair value of Royalty Fee Derivative Liability

Barings Royalty Fee

Fair Value of Financial Assets and Liabilities

4 unchanged sentences

Money market funds

Derivative liability (Note 10)

Derivative liabilities

Fair Value Measurements as of

2 unchanged sentences

Money market funds

Derivative liability (Note 10)

Derivative liability

During the year ended December 31, 2023 and 2022, there were no transfers between Level 1 and 2.

The carrying value of accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities.

The carrying value of the Company’s variable interest rate notes payable are recorded at amortized costs, which approximates fair value due to the variable interest rate.

At December 31, 2022, the 2026 Convertible Notes, net of the Derivative Liability, were carried at amortized cost totaling $ 37,505 , comprised of the $ 28,749 non-current liability (Note 9) and $ 8,756 accrued interest (Note 8).

At December 31, 2021, the 2026 Convertible Notes, net of the Derivative Liability, were carried at amortized cost totaling $ 32,910 , comprised of the $ 26,435 non-current liability (Note 9) and $ 6,475 accrued interest (Note 8).

The estimated fair value of the 2026 Convertible Notes, without the Derivative Liability, was $ 33,177 and $ 32,598 at December 31, 2022 and 2021, respectively.

The carrying value of the Company’s variable interest rate MidCap Credit Facility was recorded at amortized cost, which approximates fair value due to the variable interest rate.

Barings Credit Agreement and Royalty Fee Derivative Liability

At December 31, 2023, the Barings Credit Facility, net of the Royalty Fee Derivative Liability, was carried at amortized cost totaling $ 66,590 comprised of the $ 65,787 non-current liability (Note 9) and $ 803 accrued interest (Note 8).

The estimated fair value of the Barings Credit Facility, without the Royalty Fee Derivative Liability, was $ 72,295 at December 31, 2023.

The fair value of the Royalty Fee Derivative Liability is estimated using a Monte Carlo simulation.

The use of this approach requires the use of Level 3 unobservable inputs.

The main inputs when determining the fair value of the Royalty Fee Derivative Liability are the amount and timing of the expected future revenue of the Company, the estimated volatility of these revenues, and the discount rate corresponding to the risk of revenue.

The estimated fair value presented is not necessarily indicative of an amount that could be realized in a current market exchange.

The use of alternative inputs and estimation methodologies could have a material effect on these estimates of fair value.

The main inputs to valuing the Royalty Fee Derivative Liability are as follows:

Revenue volatility

Revenue discount rate

The main inputs to valuing the Royalty Fee Derivative Liability as of the Closing Date were revenue volatility of 61.0 %, and a revenue discount rate of 15.8 %.

Convertible Notes and Conversion Option Derivative Liability

At December 31, 2023, the Convertible Notes, net of the Conversion Option Derivative Liability, were carried at amortized cost totaling $ 20,024 , comprised of the $ 9,138 non-current liability (Note 9) and $ 10,886 accrued interest (Note 8).

At December 31, 2022, the Convertible Notes, net of the Conversion Option Derivative Liability, were carried at amortized cost totaling $ 37,505 , comprised of the $ 28,749 non-current liability (Note 9) and $ 8,756 accrued interest (Note 8).

The estimated fair value of the Convertible Notes, without the Conversion Option Derivative Liability, was $ 22,665 and $ 33,177 at December 31, 2023 and 2022, respectively.

The fair value of the Convertible Notes with and without the conversion option is estimated using a binomial lattice approach.

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In June 2021, the Company adopted an amended and restated certificate of incorporation increasing the number of its authorized shares of its common stock to 200,000,000 shares.

On April 5, 2019, the Company entered into an Open Market Sales Agreement (the “2019 Sales Agreement”) with Jefferies, under which the Company may offer and sell its common stock having aggregate proceeds of up to $ 50,000 from time-to-time through Jefferies, acting as agent.

In the twelve months ended December 31, 2020, the Company sold 2,984,381 shares of common stock under the 2019 Sales Agreement, resulting in net proceeds of approximately

$ 14,359 , respectively, after commissions and expenses.

From inception through March 1, 2021, the Company sold an aggregate of 10,321,840 shares of common stock under the 2019 Sales Agreement, resulting in net proceeds of approximately $ 46,985 after commissions and expenses.

On April 5, 2019, the Company entered into an Open Market Sales Agreement (the “2019 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company may offer and sell its common stock having aggregate proceeds of up to $ 50,000 from time-to-time through Jefferies, acting as agent.

The Company did not sell any shares of common stock under the 2019 Sales Agreement in the twelve months ended December 31, 2021.

On August 9, 2021, the Company and Jefferies mutually terminated the 2019 Sales Agreement and entered into another Open Market Sale Agreement (the “2021 Sales Agreement”) under which the Company may offer and sell shares of common stock of the Company having an aggregate offering price of up to $ 100,000 from time to time through Jefferies, acting as agent.

As of March 3, 2023, the Company has no t sold any shares of common stock under the 2021 Sales Agreement.

On December 14, 2020, the Company entered into an underwriting agreement with Jefferies LLC (“Jefferies”) and Piper Sandler & Co.

(collectively with Jefferies, “the Underwriters”) in connection with an underwritten public offering of 3,725,000 shares of the Company’s common stock.

Under the terms of this underwriting agreement, the Company also granted the Underwriters an option to purchase up to an additional 558,750 shares of common stock at the public offering price, less the underwriting discounts and commissions.

The Underwriters subsequently exercised this option to purchase such option shares in full.

The public offering price of the shares in this offering was $ 21.50 per share, and the Underwriters purchased all of the shares from the Company at a price of $ 20.21 per share.

After deducting underwriting discounts and commissions and offering expenses, the Company received net proceeds from the offering of $ 86,390 .

On October 13, 2020, the Company entered into an underwriting agreement with the Underwriters, in connection with an underwritten public offering of 7,180,000 shares of the Company’s common stock.

Under the terms of this underwriting agreement, the Company also granted the Underwriters an option to purchase up to an additional 1,077,000 shares of common stock at the public offering price, less the underwriting discounts and commissions.

The Underwriters subsequently exercised this option to purchase such option shares in full.

The public offering price of the shares in this offering was $ 9.75 per share, and the Underwriters purchased all of the shares from the Company at a price of $ 9.17 per share.

After deducting underwriting discounts and commissions and offering expenses, the Company received net proceeds from the offering of $ 75,406 .

In May 2020, the Company entered into an underwriting agreement with the Underwriters, in connection with an underwritten public offering of 8,181,819 shares of the Company’s common stock.

In the twelve months ended December 31, 2023, the Company sold 1,514,926 shares of common stock under the 2021 Sales Agreement, resulting in gross proceeds to the Company of $ 9,897 , and net proceeds, after accounting for issuance costs, of $ 9,532 .

The Company did no t offer or sell shares of its common stock under the 2021 Sales Agreement during the twelve months ended December 31, 2022 and 2021, respectively.

On December 13, 2023, the Company entered into an underwriting agreement with Jefferies, BofA Securities, Inc.

and Piper Sandler & Co.

(collectively “the Underwriters”) in connection with an underwritten public offering of 30,800,000 shares of the Company’s common stock.

Under the terms of this underwriting agreement, the Company also granted the Underwriters an option to purchase up to an additional 4,620,000 shares of common stock at the public offering price, less the underwriting discounts and commissions.

The Underwriters subsequently exercised this option to purchase such option shares in full.

On December 17, 2023, the Company sold all 35,420,000 shares of common stock and closed this underwritten public offering.

The public offering price of the shares in this offering was $ 3.25 per share, and the Underwriters purchased all of the shares from the Company at a price of $ 3.055 per share.

After deducting underwriting discounts and commissions and offering expenses, the Company received net proceeds from the offering of $ 107,725 .

As of December 31, 2022, the Company had reserved 21,653,015 shares of common stock for the exercise of outstanding stock options, the vesting of restricted stock units, and the number of shares remaining available for grant under the Company’s 2021 Stock Incentive Plan, 2014 Stock Incentive Plan, the 2019 Inducement Stock Incentive Plan, and the 2014 Employee Stock Purchase Plan (Note 13).

As of December 31, 2023, the Company had reserved 24,933,970 shares of common stock for the exercise of outstanding stock options, the vesting of restricted stock units, and the number of shares remaining available for grant under its stock-based compensation plans (Note 13).

Stock-Based Awards

For the years ended December 31, 2022 and 2021, the Company had four stock-based compensation plans under which it was able to grant stock-based awards, the 2014 Stock Incentive Plan (the “2014 Plan”), the 2021 Stock Incentive Plan (the “2021 Plan”), the 2019 Inducement Plan, and the 2014 Employee Stock Purchase Plan (the “ESPP”), collectively the “Stock Plans”.

For the years ended December 31, 2023 and 2022, the Company had four stock-based compensation plans under which it was able to grant stock-based awards, the 2014 Stock Incentive Plan (the “2014 Plan”), the 2021 Stock Incentive Plan (the “2021 Plan”), the 2019 Inducement Stock Incentive Plan (the “2019 Inducement Plan”), and the 2014 Employee Stock Purchase Plan (the “ESPP”) (collectively the “Stock Plans”).

Certain inducement awards made prior to inception of the 2019 Inducement Plan were issued outside of the Stock Plans.

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The 2014 Plan and the 2021 Plan provide for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards.

As of December 31, 2022 and 2021, respectively, the Company had an immaterial number of vested stock awards outstanding that were granted under the Company’s 2006 Stock Incentive Plan (the “2006 Plan”).

As of December 31, 2023 and 2022, respectively, the Company

had an immaterial number of vested stock awards outstanding that were granted under the Company’s 2006 Stock Incentive Plan (the “2006 Plan”).

Effective as of the adoption of the 2014 Plan by the Company’s stockholders in 2014, no new awards have been granted under the 2006 Plan.

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2014 Plan - The number of shares initially reserved for issuance under the 2014 Plan was 1,336,907 shares of common stock.

Between 2014 and 2021, the number of shares reserved for issuance under the 2014 Plan increased to

8,622,647 as of January 1, 2021.

Between 2014 and 2021, the number of shares reserved for issuance under the 2014 Plan increased to 8,622,647 as of January 1, 2021.

On June 18, 2021, the Company’s stockholders approved the adoption of the 2021 Plan previously approved by the board of directors.

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plus 456,334 shares remaining available for grant under the 2014 Plan as of immediately prior to the effective date of the 2021 Plan and 9,766,336 shares subject to awards granted under the 2014 Plan or the 2006 Plan, which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject to certain limitations).

On June 16, 2022, the Company’s stockholders approved an increase of the number of shares of common stock that is reserved for issuance by 3,600,000 .

On June 16, 2022, the Company’s stockholders approved an amendment (“Amendment No.

1”) to the Company’s 2021 Plan.

Amendment No.

1 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 3,600,000 .

On June 14, 2023, the Company’s stockholders approved an amendment (“Amendment No.

2”) to the Company’s 2021 Plan.

Amendment No.

2 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 3,900,000 .

As of December 31, 2023, 6,219,678 shares remained available for issuance under the 2021 Plan.

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The simplified method defines the life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches.

The Company utilizes the simplified method because the Company does not have sufficient historical exercise data over the life of awards to provide a reasonable basis upon which to estimate expected term.

The Company utilizes the simplified method because the Company does not have sufficient historical exercise data over

the life of awards to provide a reasonable basis upon which to estimate expected term.

The expected term of stock options granted to nonemployees is equal to the contractual term of the option award.

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Each RSU is equivalent to one share of common stock upon vesting.

Each RSU award vests on an annual basis over a three-year period.

Typically, each RSU award vests on an annual basis over a three-year period.

Holders of RSUs are not entitled to vote on any matters and are not entitled to dividends.

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Effective income tax rate

Changes in the valuation of the derivative liability do not provide a future tax benefit.

To the extent the deferred tax asset related to the derivative liability exceeds the deferred tax liability related to the 2026 Convertible Notes, the excess is recorded as a permanent item.

Changes in the valuation of the Royalty Fee Derivative Liability, except to the extent that they relate to actual royalties paid or accrued, do not provide a future tax benefit.

To the extent the deferred tax asset related to the Royalty Fee Derivative Liability exceeds the deferred tax liability related to the Barings Credit Agreement, the excess is recorded as a permanent item.

Changes in the valuation of the Conversion Option Derivative Liability do not provide a future tax benefit.

To the extent the deferred tax asset related to the Conversion Option Derivative Liability exceeds the deferred tax liability related to the Convertible Notes, the excess is recorded as a permanent item.

Net deferred tax assets consisted of the following:

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Derivative liability

Stock-based Awards

Accrued expenses and other

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Convertible Notes

Barings Credit Facility

Total deferred tax liabilities

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The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets.

Management considered the Company’s cumulative net losses and concluded that it is more likely than not that

the Company would not realize the benefits of the deferred tax assets.

Management considered the Company’s cumulative net losses and concluded that it is more likely than not that the Company would not realize the benefits of the deferred tax assets.

Accordingly, a full valuation allowance was established against the net deferred tax assets as of December 31, 2023, 2022 and 2021.

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Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the years ended December 31, 2023, 2022 and 2021:

Year ended December 31,

Net loss attributable to common stockholders

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Net loss per share - basic

For the year ended December 31, 2020, there is no dilutive impact.

Therefore, diluted net loss per share is the same as basic net loss per share.

Basic and diluted net loss per share was calculated as follows for the years ended December 31, 2023, 2022 and 2021:

2 unchanged sentences

Interest expense on Convertible Notes

Gain on extinguishment of debt (Note 9)

Change in fair value of derivative liability

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The Company excluded the following common stock equivalents, outstanding as of December 31, 2023, 2022 and 2021 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2023, 2022 and 2021 because they had an anti-dilutive impact due to the net loss incurred for the periods.

The Company also excluded the shares issuable upon conversion of the 2026 Convertible Notes from the computation of diluted net loss per share for the year ended December 31, 2020 because they had an anti-dilutive impact.

Options to purchase common stock

Restricted stock units

Shares issuable upon conversion of 2026 Convertible Notes, if converted

Warrants for the purchase of common stock

Commitments and Contingencies

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Related Party Transactions

The Company has engaged Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) to provide certain legal services to the Company.

The sister of the Company's former Chief Business Officer Christopher White was a managing partner at WilmerHale, who has not participated in providing legal services to the Company.

The Company incurred fees for legal services rendered by WilmerHale of approximately $ 1,472 , $ 959 and $ 1,396 for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 and 2022, there was $ 298 and $ 0 recorded in accounts payable for WilmerHale.

As of December 31, 2023 and 2022, there was $ 0 and $ 24 recorded in accrued expenses for WilmerHale.

The Company has engaged Heier Consulting, LLC (“Heier Consulting”), an entity affiliated with Jeffrey Heier, M.D.

a former member of the Company’s Board of Directors and the Company’s current Chief Scientific Officer, to provide advice or expertise on one or more of the Company’s development-stage drug or medical device products

relating to retinal diseases or conditions under a consultant agreement.

Compensation for these services is in the form of cash and stock-based awards.

The total grant date fair value of stock-based awards granted to Heier Consulting is $ 96 , which is recognized to expense on a straight-line basis over the respective vesting periods.

The Company incurred cash-based fees for services rendered by Heier Consulting of approximately $ 32 , 24 , and $ 0 for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 and 2022, there was $ 6 and $ 3 recorded in accounts payable for Heier Consulting.

As of December 31, 2023 and 2022, there was $ 0 and $ 0 recorded in accrued expenses for Heier Consulting.

Effective February 21, 2024, the Company and Heier Consulting terminated this relationship.

In November 2020, the Company engaged Specialty Pharma Consulting, LLC (“Specialty Pharma”), an entity affiliated with Kevin Coughenour, to provide services for quality engineering and validation activities in the ordinary course of business.

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As of December 31, 2023 and 2022, there were no liabilities recorded with regard to Specialty Pharma.

The Company has engaged Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) to provide certain legal services to the Company.

The Company's Chief Business Officer’s sister is a managing partner at WilmerHale, who has not participated in providing legal services to the Company.

The Company incurred fees for legal services rendered by WilmerHale of approximately $ 959 , $ 1,396 and $ 1,772 for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022 and 2021, there was $ 0 and $ 119 recorded in accounts payable for WilmerHale.

As of December 31, 2022 and 2021, there was $ 24 and $ 68 recorded in accrued expenses for WilmerHale.

Subsequent Events

Securities Purchase Agreement

On February 21, 2024, the Company, entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Investors”), pursuant to which the Company issued and sold to the Investors in a private placement an aggregate of 32,413,560 shares of the Company’s common stock, par value $ 0.0001 per share (the “Shares”), at a price of $ 7.52 per share, and, to certain Investors in lieu of Shares, pre-funded warrants to purchase 10,805,957 shares of the Company’s common stock (the “Pre-Funded Warrants”), at a price of $ 7.519 per Pre-Funded Warrant (the “2024 Private Placement”).

Each Pre-Funded Warrant issued in the 2024 Private Placement has an exercise price of $ 0.001 per share, is currently exercisable and will remain exercisable until the Pre-Funded Warrant is exercised in full.

The 2024 Private Placement closed on February 26, 2024.

The Company received aggregate gross proceeds from the 2024 Private Placement of approximately $ 325,000 , before deducting placement agent fees and offering expenses.

2019 Inducement Plan

On February 20, 2024, the Company’s board of directors amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 1,054,000 to 3,804,000 shares of common stock.

On February 22, 2024, the Company granted a total of 1,527,019 non-statutory stock options and a total of 935,279 RSUs under the 2019 Inducement Plan to the Company’s newly appointed Executive Chairman and its new Chief Strategy Officer.

The number of shares of common stock that may be issued under the ESPP will automatically increase on the first day of each fiscal year, commencing on January 1, 2015 and ending on December 31, 2024, in an amount equal to the least of 207,402 shares of the Company’s common stock, 0.5 % of the number of shares of the Company’s common stock outstanding on the first day of the applicable fiscal year, and an amount determined by the Company’s board of directors.

1 unchanged sentence

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