What changed in this filing

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Item 9A. Controls and Procedures

2025-03-03 compared with 2024-03-11 · 311 added, 265 removed, 878 unchanged (40% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management, including our Chief Executive Officer and Chief Financial Officer recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management, including our principal executive officer and our principal financial officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our principal executive officer and our principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

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

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

● 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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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our President and Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

Our management, including our principal executive officer and our principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013) .

Based on that assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information

A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) is in the form of equity awards, including stock options and restricted stock units, or RSUs, and, from time to time, directors and officers engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or other of our securities, including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal reasons.

Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions be in accordance with applicable U.S.

federal securities laws that prohibit trading while in possession of material nonpublic information.

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.

During the fourth quarter of 2024, none of our directors and officers adopted or terminated a trading arrangement for the sale or purchase of our securities that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), or a “Rule 10b5-1 trading arrangement”, or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

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Our board of directors has determined that Merilee Raines qualifies as an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K of the Exchange Act and is “independent” under the rules of the Nasdaq Global Market.

Insider Trading Policies and Procedures

The information required by this item will be set forth in our Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated in this Annual Report on Form 10-K by reference.

Executive Compensation

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2019 Inducement Stock Incentive Plan

Amendment to 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

Amendment No.

3 to 2019 Inducement Stock Incentive Plan

Amendment No.

4 to 2019 Inducement Stock Incentive Plan

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

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Mattessich, dated as of February 21, 2024

Separation Agreement by and between the Registrant and Antony C.

Mattessich, dated May 1, 2024

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

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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

Description of Exhibit

Sublease, dated as of April 4, 2019, by and among Ocular Therapeutix, Inc.

and Holcim (US) Inc.

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

License Agreement, by and between the Registrant and AffaMed Therapeutics Limited, dated as of October 29, 2020

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

Amendment to Employment Agreement by and between the Registrant and Rabia Gurses-Ozden, dated as of March 14, 2024

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

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Employment Agreement, by and between the Registrant and Dr.

Dugel, dated as of February 21, 2024

Employment Agreement, by and between the Registrant and Dr.

Sanjay Nayak, dated as of February 21, 2024

Employment Agreement by and between the Registrant and Nadia Waheed, dated April 15, 2024

Letter Agreement by and between the Registrant and Nadia Waheed, dated April 22, 2024

Employment Agreement by and between the Registrant and Dr.

Jeffrey Heier, dated as of February 21, 2024

Amendment No.

1 to the Employment Agreement by and between the Registrant and Dr.

Jeffrey Heier, dated as of March 1, 2025

Employment Agreement by and between the Registrant and Dr.

Peter Kaiser, dated as of February 21, 2024

Amendment No.

1 to the Employment Agreement by and between the Registrant and Dr.

Peter Kaiser, dated as of March 28, 2024

Amendment No.

2 to the Employment Agreement by and between the Registrant and Dr.

Peter Kaiser, dated as of March 1, 2025

Employment Agreement by and between the Registrant and Todd Anderman, dated as of October 4, 2024

Insider Trading Policies and Procedures

Subsidiaries of the Registrant

Consent of PricewaterhouseCoopers LLP

Incorporated by Reference

Description of Exhibit

Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

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Donald Notman

Chief Financial Officer

Chief Financial Officer and Chief Operating Officer

(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

/s/ Antony Mattessich

President, Chief Executive Officer and Director

Antony Mattessich

/s/ Pravin Dugel

Executive Chairman of the Board of Directors, President, Chief Executive Officer

(Principal Executive Officer)

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/s/ Donald Notman

Chief Financial Officer

Chief Financial Officer and Chief Operating Officer

March 3, 2025

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(Principal Financial and Accounting Officer)

/s/ Pravin Dugel, M.D.

Executive Chairman of the Board of Directors

March 11, 2024

Pravin Dugel, M.D.

/s/ Adrienne Graves, Ph.D.

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

Opinion on the Financial Statements

Opinions on the Financial Statements and Internal Control over Financial Reporting

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

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.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

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

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

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

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

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) 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;

and (iii) 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Critical Audit Matters

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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 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 Conversion Option Derivative Liability.

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

The main inputs to valuing the Convertible Notes with the conversion option as of December 31, 2023 include the Company’s stock price on the valuation date, the expected annual volatility of the Company’s stock and the bond yield.

The significant assumption used in determining the bond yield is the market yield movements of a comparable instrument issued as of the valuation date, which is assessed and updated each period.

The principal considerations for our determination that performing procedures relating to the valuation of the derivative liability is a critical audit matter are the significant judgment by management to determine the fair value of the derivative liability using a binomial lattice approach;

this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating the audit evidence obtained related to the valuation of the derivative liability and management’s significant assumption related to market yield movements used in determining the bond yield input.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Revenue Recognition – DEXTENZA

As described in Note 2 to the consolidated financial statements, the Company sells DEXTENZA in the United States primarily to a limited number of specialty distributors (SDs) under individually negotiated distribution agreements.

These customers then subsequently resell DEXTENZA to ambulatory surgery centers, hospital outpatient departments and physicians’ offices.

The Company recognizes revenue on product sales when the customer obtains control of the Company's product, which occurs at a point in time (upon delivery to the customer).

Product revenues are recorded net of applicable reserves for variable consideration, including discounts and allowances.

As disclosed by management, the delivery of DEXTENZA to customers constitutes a single performance obligation.

For the year ended December 31, 2024, the Company recognized $63.5 million of product revenue, net, relating to the sale of DEXTENZA.

The principal consideration for our determination that performing procedures relating to revenue recognition for DEXTENZA is a critical audit matter is a high degree of auditor effort in performing procedures related to revenue recognition for DEXTENZA.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others (i) the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of fair values for the derivative liability and (ii) comparing the independent estimate to management’s fair value estimate to evaluate the reasonableness of management’s estimate.

Developing the independent estimate involved testing the completeness and accuracy of the inputs provided by management and evaluating the reasonableness of management’s significant assumption related to market yield movements used in determining the bond yield by considering observable data.

These procedures included testing the effectiveness of controls relating to the revenue recognition process for DEXTENZA, including controls over the recording of revenue for DEXTENZA at the transaction price when the customer obtains control.

These procedures also included, among others, (i) evaluating management’s revenue recognition policy;

(ii) testing the, on a sample basis, completeness, accuracy, and occurrence of amounts invoiced for DEXTENZA by obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery, and subsequent cash receipts;

(iii) testing, on a sample basis, the accuracy of variable consideration applied related to the sale of DEXTENZA by obtaining and inspecting source documents, such as contracts, units sold, rebate payments made and other related documentation;

and (iv) confirming, on a sample basis, the accuracy and existence of outstanding accounts receivable balances as of December 31, 2024 and, for confirmations not returned, obtaining and inspecting source documents, such as, purchase orders, invoices, proof of delivery, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

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Common stock, $ 0.0001 par value;

200,000,000 shares authorized and 114,963,193 and 77,201,819 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

400,000,000 and 200,000,000 shares authorized and 157,749,490 and 114,963,193 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

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Gains and losses on extinguishment of debt, net

Other income (expense), net

Total other income, net

Other expense

Total other income (expense), net

Net loss per share, basic

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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

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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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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 and pre-funded warrants upon private placement

Issuance of common stock upon exercise of conversion option

Issuance of common stock upon vesting of restricted stock units

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Gains and losses on extinguishment of debt, net

Gain (loss) on disposal of property and equipment

Gain on disposal of property and equipment

Changes in operating assets and liabilities:

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Proceeds from issuance of Barings notes payable

Proceeds from issuance of notes payable, net

Proceeds from exercise of stock options

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

Payments of debt financing costs

Payments of debt refinancing 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 in prior period

Repayment of MidCap notes payable

Repayment of notes payable

Repayment of short-term bridge loan

Repayment from issuance of short-term bridge loan

Proceeds from issuance of common stock and pre-funded warrants upon private placement, net of issuance costs

Net cash provided by financing activities

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

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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(Amounts in thousands, except share and per share data)

Nature of the Business and Basis of Presentation

Nature of the Business

Ocular Therapeutix, Inc.

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

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.

Recently approved products will require significant sales, marketing and distribution support up to and including upon their launch.

The Company is a biopharmaceutical company committed to redefining the retina experience.

AXPAXLI (axitinib intravitreal hydrogel, also known as OTX-TKI), the Company’s product candidate for retinal disease, is based on its proprietary ELUTYX bioresorbable hydrogel-based formulation technology.

AXPAXLI is currently in two repeat-dosing Phase 3 clinical trials for the treatment of wet age-related macular degeneration (“wet AMD”), which the Company refers to as the SOL-1 and the SOL-R trials.

The Company has also completed a Phase 1 clinical trial of AXPAXLI for the treatment of non-proliferative diabetic retinopathy (“NPDR”), which the Company refers to as the HELIOS trial and intends to meet with the U.S.

Food and Drug Administration (“FDA”), in the first half of 2025 to discuss the design of a potential registrational clinical program for AXPAXLI for the treatment of NPDR and diabetic macular edema (“DME”) and then evaluate its next steps.

The Company also leverages the ELUTYX technology in its commercial product DEXTENZA, an FDA-approved corticosteroid for the treatment of ocular inflammation and pain following ophthalmic surgery and ocular itching associated with allergic conjunctivitis, and its product candidate PAXTRAVA (travoprost intracameral hydrogel also known as OTX-TIC), which is currently in a Phase 2 clinical trial for the treatment of open-angle glaucoma (“OAG”) or ocular hypertension (“OHT”).

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, dependence on specific programs, compliance with government regulations, regulatory approval and compliance, reimbursement, uncertainty of market acceptance of products and the need to obtain additional financing.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization.

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’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.

Approved products will require significant sales, marketing and distribution support.

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, 2024, the Company had an accumulated deficit of $ 891,084 .

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.

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 $ 392,102 as of December 31, 2024 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 is dependent on the Company’s ability to generate cash flows from the sales of the Company’s product candidates, such as AXPAXLI, if and as approved, and the sales of DEXTENZA, and to 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.

Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all.

If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs for product candidates, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

If the Company is unable to obtain funding on a timely basis, in sufficient amounts, or at all, the Company could be

forced to delay, reduce or eliminate some or all of its research and development programs for product candidates, product portfolio expansion or commercialization efforts, any of which could adversely affect its business prospects, or the Company may be unable to continue operations.

Summary of Significant Accounting Policies

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The Company sells DEXTENZA in the United States primarily to a limited number of specialty distributors (“SDs”) under individually negotiated distribution agreements.

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 (“ASCs”) based on individually negotiated direct distribution agreements (the “Direct Customers”).

These customers then subsequently resell DEXTENZA to ambulatory surgery centers (“ASCs”), hospital outpatient departments (“HOPDs”) and physicians’ offices.

The Company also sells DEXTENZA directly to a small population of ASCs and physicians’ offices 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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For Medicaid programs, the Company estimates the portion of sales attributed to Medicaid patients and records a liability for the rebates to be paid to the respective state Medicaid programs.

The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period.

Purchaser/Provider Discounts and Rebates — The Company offers rebate payments for which ASCs, hospital out-patient departments and other prescribers qualify by meeting quarterly purchase volumes of DEXTENZA under the Company’s volume-based rebate program.

The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet

been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period.

Purchaser/Provider Discounts and Rebates — The Company offers rebate payments for which ASCs, HOPDs and other prescribers qualify by meeting quarterly purchase volumes of DEXTENZA under the Company’s volume-based rebate program.

The Company calculates rebate payment amounts due under this program quarterly, based on actual qualifying purchases and applies a contractual discount rate.

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Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

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 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.

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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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.

The entire embedded conversion option is required to be separated from the Convertible Notes and accounted for as a freestanding derivative instrument subject to derivative accounting.

The main input when determining the fair value of the Convertible Notes is the bond yield that pertains to the host instrument without the conversion option.

The significant assumption used in determining the bond yield is the market yield movements of a comparable instrument issued as of the valuation date, which is assessed and updated each period.

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

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 has had no impairment triggers of long-lived assets.

The Company accounts for issued warrants, including pre-funded warrants, as either liability or equity.

Warrants are considered liabilities if they are mandatorily redeemable and they require settlement in cash or other assets, or a variable number of shares.

Contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event.

If warrants do not otherwise require liability classification, the Company assesses whether the warrants are indexed to its common stock.

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations as a gain or loss.

Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Research and Development Costs

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The straight-line method of expense recognition is applied to all awards with service-only conditions.

For awards that include both service and performance conditions, the Company starts recognizing the fair value of the awards as expense when achievement of the underlying performance conditions is probable, based on the portion of the requisite service period completed.

The Company recognizes compensation expense for only the portion of awards that are expected to vest.

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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.

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The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

The Company’s singular focus is on advancing its bioresorbable hydrogel product candidates for the programed-release delivery of therapeutic agents, specifically for ophthalmology.

All property and equipment, net and all operating lease assets are held in the United States.

All product revenue, net is attributable to the United States.

Collaboration revenue is attributable to a customer in China (Note 3).

The Company has adopted Accounting Standards Update (“ASU”) No.

2023-07 Segment Reporting - Improvements to Reportable Segment Disclosures in these Consolidated Financial Statements.

Comprehensive Loss

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

Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, outstanding stock options and common stock warrants, except where the result would be anti-dilutive.

Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of the conversion of convertible debt securities, the exercise of outstanding stock options and common stock warrants.

Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, outstanding stock options, and outstanding restricted stock units, except where the result would be anti-dilutive.

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.

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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.

In December 2023, the FASB issued ASU No.

2023-09 Income Taxes - Improvements to Income Tax Disclosures .

The amendments require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii)

income taxes paid disaggregated by jurisdiction.

The amendments are effective for annual periods beginning after December 15, 2024.

The Company does not expect the adoption of the amendments to have a significant impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03 Disaggregation of Income Statement Expenses .

The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

The Company does not expect the adoption of the amendments to have a significant impact on its consolidated financial statements.

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

Licensing Agreements and Deferred Revenue

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AffaMed License Agreement (out-licensing)

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”).

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 OAG or OHT (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.

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Under the License Agreement, the Company is generally responsible for expenses related to the development of the AffaMed Licensed Products in the applicable Fields in the Territories, provided that AffaMed (i) reimburse the Company a low-teen percentage of expenses incurred in connection with certain clinical trials conducted by the Company and designed to support marketing approval of the AffaMed Licensed Product by the FDA or the European Medicines Agency (“Global Studies”);

(ii) is solely responsible for expenses incurred in connection with territory-specific clinical trials that it conducts in furtherance of the development plan agreed between the parties in the applicable Fields in the Territories (“Local Studies”);

(ii) is solely responsible for expenses incurred in connection with territory-

specific clinical trials that it conducts in furtherance of the development plan agreed between the parties in the applicable Fields in the Territories (“Local Studies”);

and (iii) reimburse the Company in full for expenses incurred in connection with obtaining and maintaining regulatory approvals of the AffaMed Licensed Products in the applicable Fields in the Territories.

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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 PAXTRAVA for any or no reason upon providing the Company three months’ notice.

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.

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

● 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 license, regulatory filings and manufacturing for the Company’s PAXTRAVA product candidate regarding OAG or OHT 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”);

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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 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 recognizes 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.

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Deferred revenue at December 31, 2024

Regeneron Collaboration Agreement

On October 10, 2016, the Company entered into a Collaboration, Option and License Agreement (the “Regeneron Collaboration Agreement”) with Regeneron Pharmaceuticals, Inc.

(“Regeneron”) for the development and potential commercialization of products using the Company’s hydrogel in combination with Regeneron’s large molecule VEGF-targeting compounds for the treatment of retinal diseases.

Under the terms of the Collaboration Agreement, the Company and Regeneron had agreed to conduct a joint research program with the aim of developing a sustained-release formulation of aflibercept, currently marketed under the tradename Eylea, that is suitable for advancement into clinical development.

The Company had granted Regeneron an option (the “Option”) to enter into an exclusive, worldwide license to develop and commercialize products using the Company’s hydrogel in combination with Regeneron’s large molecule VEGF-targeting compounds (“Licensed Products”).

Under the term of the Collaboration Agreement, Regeneron was responsible for funding an initial preclinical tolerability study.

The Regeneron Collaboration Agreement was subsequently amended on May 8, 2020 (the “Regeneron Amendment”).

Pursuant to the Regeneron Amendment, the Company and Regeneron had adopted a new work plan to transition joint efforts under the Regeneron Collaboration Agreement to the research and development of an extended-delivery formulation of aflibercept to be delivered to the suprachoroidal space.

Regeneron had agreed to pay personnel and material costs of the Company for specified preclinical development activities in connection with the revised work plan, as well as certain other costs.

In addition, the Regeneron Amendment provided for the modification of the terms of the Option previously granted to Regeneron under the Regeneron Collaboration Agreement.

As amended, the Option was exclusive for twenty-four months following May 8, 2020.

On August 5, 2021, Regeneron notified the Company of its termination of the Regeneron Collaboration Agreement, as amended.

The termination became effective immediately.

In connection with the termination of the Regeneron Collaboration Agreement, all licenses, options and other rights granted to either party under the Regeneron Collaboration Agreement automatically terminated, other than the surviving joint intellectual property rights described below.

The Company and Regeneron also became obligated to undertake certain transition activities upon the termination, including the return of specified property of the other party.

Each party retains an equal, undivided ownership interest, which may be transferred, licensed and otherwise exploited without a duty to account to the other party, in certain intellectual property rights jointly developed under the collaboration.

As a result of the termination, the Company is no longer eligible to receive (i) reimbursement from Regeneron for ongoing research and development activities, (ii) a fee upon exercise of the Option, (iii) payments upon the achievement of specified development and regulatory milestones of the Regeneron Licensed Products, or (iv) tiered, escalating royalties in a range from a high-single digit to a low-to-mid teen percentage of net sales of Regeneron Licensed Products, in each case pursuant to the Regeneron Collaboration Agreement.

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, 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.

Cash Equivalents and Restricted Cash

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Accumulated depreciation and amortization

Depreciation and amortization expense was $ 2,983 , $ 2,109 and $ 2,421 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company leases real estate, including laboratory, manufacturing and office space.

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

Depreciation and amortization expense was $ 3,786 , $ 2,983 and $ 2,109 for the years ended the years ended December 31, 2024, 2023 and 2022, respectively.

The Company leases real estate, including laboratory, manufacturing and office space, and certain equipment.

The Company’s two real estate leases have remaining lease terms of approximately 2.5 years and 3.5 years, respectively.

The Company’s equipment leases have remaining lease terms ranging from approximately 2 to 3.5 years.

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

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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.

The lease for the Company’s approximately 70,712 square feet of general office, research and development and manufacturing space located at 15 Crosby Drive in Bedford, Massachusetts commenced on February 1, 2017 and will expire on July 31, 2027.

The Company has the option to extend the lease for two additional periods of five years each by delivering written notice of the exercise not earlier than fifteen months nor later than 12 months before expiration of the original term.

The lease for 30,036 square feet of office space located at 24 Crosby Drive in Bedford, Massachusetts commenced on April 18, 2019 and terminates on March 31, 2024 and does not include any lease renewal options .

The lease for the Company’s approximately 30,036 square feet of office space located at 24 Crosby Drive in Bedford, Massachusetts commenced on April 18, 2019 and terminated on March 31, 2024.

Certain equipment leases include options to renew on a month-by-month basis, at the sole discretion of the Company.

Recognized lease costs were as follows:

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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 Convertible Notes (Note 9)

Accrued interest payable on Barings Credit Facility (Note 9)

Accrued professional fees

Accrued Other

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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.

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 customary affirmative and negative covenants and requires the Company to maintain a minimum liquidity amount of $ 20,000 .

As of December 31, 2024, the Company was not in violation of any of its covenants under the Barings Credit Agreement.

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.

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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:

For the years ended December 31, 2024 and 2023, Barings Royalty Fees were $ 2,2 21 and $ 901 , respectively.

A summary of the Barings Credit Facility is as follows:

Barings Credit Facility

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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, unless earlier converted, repurchased or redeemed (as amended the “Convertible Notes”).

On March 1, 2019, the Company issued $ 37,500 of convertible notes (as amended, the “Convertible Notes”).

On March 28, 2024, the Company issued 5,769,232 shares of its common stock with a total fair value of $ 52,500 to the holder of the Convertible Notes in connection with the conversion of the principal amount of the Convertible Notes (the “Conversion”) and paid the holder $ 11,361 for accrued interest.

The extinguishment of obligations under the Convertible Notes and the resulting derecognition of the principal of the Convertible Notes ($ 37,500 ), the unamortized discount ($ 27,950 ), and the Conversion Option Derivative Liability ($ 15,000 ), resulted in a net loss of $ 27,950 , 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, 2024.

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”).

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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.

A portion of the fair value of the Convertible Notes as of the date of the Amendment of $ 9,943 was presented in accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2023 because the Convertible Notes were convertible at that date, and this amount represented 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.

The conversion rate is initially 153.8462 shares of the Company’s common stock per $ 1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of $ 6.50 per share.

The conversion rate is subject to adjustment in customary circumstances such as stock splits or similar changes to the Company’s capitalization.

Upon conversion by the holder, other than a conversion based on a Corporate Transactions as defined below, the Company has the right to select the settlement of the conversion in either shares of common stock, cash, or in a combination thereof.

Upon any conversion of any Convertible Note, the Company is obligated to make a cash payment to the holder of such Convertible Note for any interest accrued but unpaid on the principal amount converted.

If the Company elects to satisfy such conversion by shares of common stock, the Company shall deliver to the converting holder in respect of each $ 1,000 principal amount of Convertible Notes being converted a number of common shares equal to the conversion rate in effect on the conversion date;

If the Company elects to satisfy such conversion by cash settlement, the Company shall pay to the converting holder in respect of each $ 1,000 principal amount of Convertible Notes being converted cash in an amount equal to the sum of the Daily Conversion Values (as defined below) for each of the twenty (20) consecutive trading days during a specified period.

The “Daily Conversion Values” is defined as each of the 20 consecutive trading days during the specified period, 5.0 % of the product of (a) the conversion rate on such trading day and (b) the “Daily VWAP” on such trading day.

The Daily VWAP is defined as each of the 20 consecutive trading days during the applicable Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on the Bloomberg page for the Company.

If the Company elects to satisfy such conversion by combination, the Company shall pay or deliver, as the case may be, in respect of each $ 1,000 principal amount of Convertible Notes being converted, a settlement amount equal to the sum of the “Daily Settlement Amounts” (as defined below) for each of the twenty (20) consecutive trading days during the specified period.

The “Daily Settlement Amount” is defined as, for each of the 20 consecutive trading days during the specified period:

(a) cash in an amount equal to the lesser of (i) the Daily Measurement Value (as defined below) and (ii) the Daily Conversion Value on such Trading Day;

and (b) if the Daily Conversion Value on such trading day exceeds the Daily Measurement Value, a number of Shares equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.

The “Daily Measurement Value” is defined as the Specified Dollar Amount (as defined below), if any, divided by 20.

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 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);

(ii) a sale, lease, transfer, of all or substantially all of the assets of the Company;

or (iii) if the Company’s common stock ceases to be listed or quoted on any of the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (the “Corporate Transaction”).

If the last reported sale price of the common stock has been at least 130 % of the conversion rate then in effect for 20 of the preceding 30 trading days (including the last trading day of such period), the Company is entitled, at its option, to redeem all or part of the outstanding principal amount of the Convertible Notes, on a pro rata basis, at an optional redemption price equal to 100 % of the outstanding principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the optional redemption date.

The Convertible Notes are subject to acceleration upon the occurrence of specified events of default, including a default or breach of certain contracts material to the Company and the delisting and deregistration of the Company’s common stock.

The Company determined that the embedded conversion option is required to be separated from the Convertible Notes and accounted for as a freestanding derivative instrument subject to derivative accounting.

The holders of the Convertible Notes were entitled to 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 based on certain terms and conditions.

The Company determined that the embedded conversion option was required to be separated from the Convertible Notes and accounted for as a freestanding derivative instrument subject to derivative accounting.

The allocation of proceeds to the conversion option results in a discount on the Convertible Notes.

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 Company amortized the discount to interest expense over the term of the Convertible Notes using the effective interest method.

The Company presented accrued interest in accrued current liabilities because the notes were convertible and the interest was payable in cash.

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

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

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

Convertible Notes

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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.

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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

Accrued exit fee

Unamortized discount

Long-term notes payable

Barings Credit Agreement

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

Balance at August 2, 2023

Balance at December 31, 2023

Change in fair value

1 unchanged sentence

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.

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 Convertible Notes (Note 9) contained the Conversion Option Derivative Liability, an embedded conversion option that met 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 was subsequently remeasured to fair value at each reporting period.

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

The “with-and-without” methodology involved valuing the whole instrument on an as-is basis with the embedded conversion option 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 was the fair value of the derivative, recorded as the Conversion Option Derivative Liability.

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

A roll-forward of the Conversion Option Derivative Liability is as follows:

Balance at December 31, 2023

Change in fair value

Change in fair value from Convertible Notes Amendment

Balance at March 28, 2024

Extinguishment in connection with Conversion

Balance at December 31, 2024

In April 2014, the Company entered into a credit facility with Silicon Valley Bank and MidCap Financial SBIC, LP, and it issued the lenders warrants to purchase 100,000 shares of its Series D-1 redeemable convertible preferred stock with an exercise price of $ 3.00 per share.

Upon the closing of the Company’s IPO in July 2014, the preferred stock warrants became warrants to purchase an aggregate of 37,878 shares of its common stock with an exercise price of $ 7.92 per share, with Silicon Valley Bank and MidCap Financial SBIC, LP., each holding warrants of 18,939 shares of common stock.

The Company had warrants for the purchase of 18,939 shares of common stock outstanding with MidCap Financial SBIC, LP at December 31, 2020 at a weighted average exercise price of $ 7.92 per share and an expiration date of April 17, 2021.

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.

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

Risks and Fair Value

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

Year Ended December 31,

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

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Money market funds

Derivative liabilities

Derivative liability

Fair Value Measurements as of

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Money market funds

Derivative liability

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

Derivative liabilities

During the years ended December 31, 2024 and 2023, there were no transfers between levels of the fair value hierarchy.

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 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

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The estimated fair value of the Barings Credit Facility, without the Royalty Fee Derivative Liability, was $ 73,608 at December 31, 2024.

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.

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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.

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

The main input when determining the fair value of the Convertible Notes is the bond yield that pertains to the host instrument without the conversion option.

The significant assumption used in determining the bond yield is the market yield movements of a comparable instrument issued as of the valuation date, which is assessed and updated each period.

The main input when determining the fair value for disclosure purposes is the bond yield which is updated each period to reflect the yield of a comparable instrument issued as of the valuation date.

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 estimated fair value of the Convertible Notes, without the Conversion Option Derivative Liability, was $ 22,665 at December 31, 2023.

The fair value of the Convertible Notes with and without the conversion option as of December 31, 2023 and previous periods was estimated using a binomial lattice approach.

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

The main input when determining the fair value of the Convertible Notes was the bond yield that pertained to the host instrument without the conversion option.

The significant assumption used in determining the bond yield was the market yield movements of a comparable instrument issued as of the valuation date, which was assessed and updated each period.

The main input when determining the fair value for disclosure purposes was the bond yield which was updated each period to reflect the yield of a comparable instrument issued as of the valuation date.

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

The fair value of the Conversion Option Derivative Liability immediately before the Conversion was determined based on the intrinsic value of the separated conversion option.

The main inputs to valuing the Convertible Notes with the conversion option are as follows:

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Preferred Stock

The Amended and Restated Certificate of Incorporation authorized 5,000,000 shares of preferred stock, $ 0.0001 par value, all of which is undesignated and none of which are issued or outstanding at December 31, 2023 and 2022.

The Amended and Restated Certificate of Incorporation has authorized 5,000,000 shares of preferred stock, $ 0.0001 par value, all of which is undesignated and none of which are issued or outstanding at December 31, 2024 and 2023.

The Amended and Restated Certificate of Incorporation authorized 100,000,000 shares of the Company’s common stock.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

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.

In June 2021, the Company adopted an amendment to the amended and restated certificate of incorporation increasing the number of its authorized shares of its common stock to 200,000,000 shares, and in June 2024, the Company adopted a further amendment to the amended and restated certificate of incorporation increasing the number of its authorized shares of its common stock by 200,000,000 shares to 400,000,000 shares.

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 total net proceeds from the 2024 Private Placement of approximately $ 316,353 after deducting placement agent fees and offering expenses.

The Company accounts for the Pre-Funded Warrants as a component of permanent equity.

In connection with entering into the Securities Purchase Agreement, also on February 21, 2024, the Company entered into a registration rights agreement with the Investors, pursuant to which the Company agreed to register for resale the Shares and the shares of the Company’s common stock issuable upon exercise of the Pre-Funded Warrants (together with the Shares, the “Registrable Securities”).

The Company filed a registration statement regarding the Registrable Securities on Form S-3 with the SEC on March 25, 2024.

On March 28, 2024, the Company issued 5,769,232 shares of its common stock to the holder of the Convertible Notes in connection with the Conversion.

The newly issued shares of common stock were valued at fair value, being the closing price of the Company’s common stock on that day, resulting in an increase in par value of the Company’s common stock of $ 1 and an increase in additional paid-in capital of $ 52,499 .

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.

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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.

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, 2024 and 2022, respectively.

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

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

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).

As of December 31, 2024, the Company had reserved 9,260,579 shares of common stock for future grants of stock-based awards under its stock-based compensation plans (Note 13).

Stock-Based Awards

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”).

For the years ended December 31, 2024 and 2023, the Company had three stock-based compensation plans under which it was able to grant stock-based awards, the 2021 Stock Incentive Plan, as amended (the “2021 Plan”), the 2019 Inducement Stock Incentive Plan, as amended (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.

The purpose of the Stock Plans is to provide incentives to employees, directors, and nonemployee consultants.

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, 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”).

The 2021 Plan and the 2019 Inducement Plan provide for the grant of non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards.

The 2021 Plan also provides for the grant of incentive stock options.

As of December 31, 2024 and 2023, respectively, the Company had a number of vested stock awards outstanding that were granted under the Company’s 2014 Stock Incentive Plan (the “2014 Plan”).

Effective as of the adoption of the 2021 Plan on June 18, 2021 by the Company’s stockholders, no new awards have been granted under the 2014 Plan.

However, as of December 31, 2024, all then-outstanding awards under the 2014 Plan remained in effect and continued to be governed by the terms of the 2014 Plan.

As of December 31, 2024 and 2023, 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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2021 Plan - The number of shares initially reserved for issuance under the 2021 Plan was 6,000,000 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.

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

Effective as of the adoption of the 2021 Plan by the Company’s stockholders, no new awards have been granted under the 2014 Plan.

However, as of December 31, 2023, all then-outstanding awards under the 2014 Plan remained in effect and continued to be governed by the terms of the 2014 Plan.

2021 Plan - The number of shares initially reserved for issuance under the 2021 Plan was 6,000,000 shares of common stock;

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).

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

On June 12, 2024, the Company’s stockholders approved an amendment (“Amendment No.

3”) to the Company’s 2021 Plan.

Amendment No.

3 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 7,000,000 .

As of December 31, 2024, 8,019,151 shares remained available for issuance under the 2021 Plan.

2019 Inducement Plan - The 2019 Inducement Plan provides for the following types of awards, each of which is referred to as an “Award”:

non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

Awards under the 2019 Inducement Plan may only be granted to persons who (a) were not previously an employee or director of the Company or (b) are commencing employment with the Company following a bona fide period of non-employment, in either case as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4).

2019 Inducement Plan - Awards under the 2019 Inducement Plan may only be granted to persons who (a) were not previously an employee or director of the Company or (b) are commencing employment with the Company following a bona fide period of non-employment, in either case as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4).

For the avoidance of doubt, neither consultants nor advisors shall be eligible to participate in the 2019 Inducement Plan.

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On December 10, 2020, the board of directors of the Company amended the 2019 Inducement Plan to increase the aggregate number of shares issuable by 554,000 shares of common stock to 1,054,000 .

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 April 16, 2024, the board of directors of the Company further amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 3,804,000 to 4,804,000 shares of common stock.

On October 4, 2024, the board of directors of the Company further amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 4,804,000 to 6,054,000 shares of common stock.

As of December 31, 2024, 848,373 shares remained available for issuance under the 2019 Inducement Plan.

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On January 1, 2023, the number of shares available for issuance under the ESPP increased by 207,402 .

On January 1, 2024, the number of shares available for issuance under the ESPP increased from 398,784 to 606,186 .

As of December 31, 2024, 393,055 shares of common stock remained available for issuance.

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RSUs granted pursuant to the Stock Plans generally require a service period of 3 years and generally vest 1/3 on each anniversary of the grant date.

Certain RSUs granted to certain newly hired executive and senior-level employees in the year ended December 31, 2024 require a service period of 3 years and vest quarterly.

An immaterial number of RSUs granted to employees in the year ended December 31, 2024 vest fully on the first anniversary of the grant and are, in addition, subject to performance conditions.

Valuation of Awards

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

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 non-employees is equal to the contractual term of the option award.

The risk-free interest rate is determined by reference to the U.S.

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Outstanding as of December 31, 2023

( 3,112,976 )

Cancelled/forfeited

( 2,343,515 )

Outstanding as of December 31, 2024

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The aggregate intrinsic value of stock options exercised was $ 11,102 , $ 275 and $ 186 during the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average grant date fair value of stock options granted to employees and directors during the years ended December 31, 2023, 2022 and 2021 was $ 2.74 , $ 4.95 and $ 12.48 per share, respectively.

As of December 31, 2023, there were 67,509 outstanding unvested service-based stock options held by nonemployees.

The weighted average grant date fair value of stock options granted during the years ended December 31, 2024, 2023 and 2022 was $ 5.59 , $ 2.74 and $ 4.95 per share, respectively.

The following table summarizes the Company’s activity of unvested RSUs:

Unvested balance at December 31, 2023

( 1,277,398 )

Cancelled/forfeited

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

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.

The Company has determined the fair value of each RSU based on the closing price of the Company’s common stock on the date of grant and recognizes the compensation expense using the straight-line method over the service period, which coincides with the vesting period.

Stock-based Compensation

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The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”).

The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis.

The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation based on a pre-tax or post-tax basis as elected by the participants.

Company contributions to the plan may be made at the discretion of the board of directors.

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Change in tax rate

Debt extinguishment

Change in the valuation allowance

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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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Net deferred tax assets

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2023, 2022 and 2021 related primarily to the increase in net operating loss carryforwards, amortization of capitalized research and development expenses, and increase in research and development tax credit carryforwards were as follows:

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2024, 2023 and 2022, resulting primarily from increases in net operating loss carryforwards, additions to and amortization of capitalized research and development expenses, and increases in research and development tax credit carryforwards, were as follows:

Year Ended December 31,

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The federal and state NOLs generated for annual periods prior to January 1, 2018 begin to expire in 2026.

The Company’s federal NOLs generated for the years ended since December 31, 2018, which amounted to a total of $ 356,757 , can be carried forward indefinitely.

The Company’s federal NOLs generated for the years ended on or after December 31, 2018, which amount to a total of $ 412,220 , can be carried forward indefinitely, although the deduction for such NOLs is limited to 80% of current year taxable income.

As of December 31, 2024, the Company also had available research and development tax credit carryforwards for federal and state income tax purposes of $ 19,666 and $ 11,848 , respectively, which begin to expire in 2026 and 2025, respectively.

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In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

There are currently no pending income tax examinations.

There are currently no pending income tax examinations that are expected to have a material impact on the Company’s Consolidated Financial Statements.

The Company’s tax years are still open under statute from the Company’s fiscal year 2021 to the present.

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Net Loss Per Share

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,

Basic net loss per share attributable to common stockholders was calculated as follows for the years ended December 31, 2024, 2023 and 2022:

Net loss attributable to common stockholders

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Net loss per share - basic

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

Year Ended December 31,

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

Net loss attributable to common stockholders, basic

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Weighted average common shares outstanding, basic

Dilutive options (treasury stock method)

Shares issuable upon conversion of Convertible Notes, as if converted

Shares issuable in connection with conversion of Convertible Notes, as if converted

Weighted average common shares outstanding, diluted

Net loss per share attributable to common stockholders, diluted

For the year ended December 31, 2024, there was no dilutive impact from potentially issuable common shares.

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

As of December 31, 2024, the Pre-Funded Warrants (Note 12) are included in the calculation of basic and diluted net loss per share.

The Company excluded the following common stock equivalents, outstanding as of December 31, 2024, 2023 and 2022 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2024, 2023 and 2022 because they had an anti-dilutive impact due to the net loss incurred for the periods.

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Restricted stock units

Segment Reporting

The Company operates as a single operating segment.

Its operations consist of developing and commercializing innovative therapies for retinal diseases and other eye conditions based on its ELUTYX proprietary bioresorbable hydrogel-based formulation technology.

Resources are allocated and performance is assessed by the Company’s Chief Executive Officer and the Company’s Chief Financial Officer and Chief Operating Officer, who the Company has determined to be, collectively, the Company’s Chief Operating Decision Maker (“CODM”).

The Company’s research and development function is responsible for research and discovery of new product candidates, and the pre-clinical and clinical development of, and related registration efforts for, the Company’s product candidates.

The Company’s operations and technical function is responsible for supply chain, the manufacturing of the Company’s commercial products and clinical trial material, and facilities.

The Company’s sales and marketing function is responsible for the commercialization of its products and market access activities.

The Company’s operations are supported by corporate functions.

Managing and allocating resources on a total company basis enables the Company’s CODM to assess the overall level of resources available and how to best deploy these resources across functions and development projects in line with the Company’s strategy.

Consistent with this approach, the CODM uses consolidated, single-segment financial information for the purposes of developing budgets and forecasts, assessing performance, allocating resources, and setting incentive targets.

The accounting policies for the Company’s one segment are the same as those described in Note 2 Summary of Significant Accounting Policies .

The CODM evaluates the performance of its one segment and allocates resources based on Net Loss.

The following table provides information about the Company’s single segment:

Year Ended December 31,

Cost of Product Revenue

Research & Development (a)

Direct Program Expenses

AXPAXLI for wet AMD

Other clinical and preclinical programs

Unallocated expenses

Personnel costs

All other costs

Selling & Marketing (a)

General & Administrative (a)

Facilities (b)

Stock-based compensation

Interest income

Interest expense

Other non-operating items

(a) excluding stock-based compensation, depreciation, and facilities expenses

(b) excluding stock-based compensation and depreciation

For the years ended December 31, 2024, 2023 and 2022, respectively, the Company has generated all of its Product Revenue, net, in the United States.

Collaboration revenue is attributable to a customer in China (Note 3).

All of the Company’s long-lived assets were located in the United States.

Refer to Note 11 for information regarding the Company’s major customers.

Commitments and Contingencies

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Related Party Transactions

The Company has engaged Boston Image Reading Center LLC (“BIRC”) to provide certain clinical development-related services to the Company.

Nadia Waheed, M.D.

M.P.H., who has served as the Company’s Chief Medical Officer since June 1, 2024, is a Director of BIRC.

For the year ended December 31, 2024, the Company incurred fees for clinical development-related services rendered by BIRC while being deemed a related party since June 1, 2024 of $ 81 .

As of December 31, 2024, there was $ 0 and $ 5 recorded in accounts payable and accrued expenses for BIRC, respectively.

Jeffrey Heier, M.D., a former member of the Company’s Board of Directors and the Company’s current Chief Scientific Officer, and Peter Kaiser, M.D., the Company’s Chief Development Officer since April 16, 2024, are each affiliated with i2Vision, Inc.

and its affiliated entities (collectively “i2Vision”).

The Company has engaged i2Vision to provide services with respect to the clinical advancement of AXPAXLI.

For the year ended December 31, 2024, the Company incurred fees and expenses related to services rendered by i2Vision of $ 2,368 , including $ 526 for pass-through costs.

The Company incurred fees and expenses related to services rendered by i2Vision of $ 271 , including $ 102 for pass-through costs, for the year ended December 31, 2023, and $ 131 , including $ 0 for pass-through costs, for the year ended December 31, 2022.

As of December 31, 2024 and 2023, there was $ 132 and $ 0 recorded in accounts payable for i2Vision, respectively.

As of December 31, 2024 and 2023, there was $ 383 and $ 0 recorded in accrued expenses for i2Vision, respectively.

As of December 31, 2024 and 2023, there was $ 176 and $ 0 recorded in prepaid expenses and other current assets for i2Vision, respectively.

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.

Christopher White, who served as the Company’s Chief Business Officer until March 6, 2024, is the brother of a partner at WilmerHale who has not participated in providing legal services to the Company.

White’s departure, WilmerHale ceased to be a related party to the Company.

For the year ended December 31, 2024, the Company incurred fees for legal services rendered by WilmerHale while being deemed a related party through March 31, 2024 of $ 1,080 .

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

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

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

The Company had engaged Heier Consulting, LLC (“Heier Consulting”), an entity affiliated with Dr.

Heier, 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 (the “Consultant Agreement”).

On February 21, 2024, the Company entered into an employment agreement with Dr.

Heier (the “Heier Employment Agreement”) under which Dr.

Heier agreed to serve as Chief Scientific Officer of the Company.

In connection with entering into the Heier Employment Agreement, the Heier Consulting Agreement was terminated.

In addition, in connection with his commencement of employment, Dr.

Heier resigned from the Company’s board of directors, effective February 21, 2024.

Compensation for the consulting services was in the form of cash and stock-based awards.

The total grant date fair value of stock-based awards granted to Dr.

Heier was $ 96 , which was 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 before termination of the Consultant Agreement of approximately $ 5 for the year ended December 31, 2024.

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

Coughenour is married to the Company’s former Chief Operating Officer Patricia Kitchen.

On April 26, 2021, the Company and Specialty Pharma terminated their relationship.

The Company incurred fees for quality engineering and validation activities rendered by Specialty Pharma of $ 0 , $ 0 and $ 155 for the years ended December 31, 2023, 2022 and 2021, respectively.

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

As of December 31, 2023, there were $ 6 recorded in accounts payable for Heier Consulting.

As of December 31, 2023, there were $ 0 recorded in accrued expenses for Heier Consulting, respectively.

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”).

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 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.

On January 1, 2024, the number of shares available for issuance under the ESPP increased by 207,402 .

No subsequent events noted.

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