What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-09 · 142 added, 113 removed, 491 unchanged (34% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

2022 December 31,

4 unchanged sentences

Prepaid expenses and other current assets 2,640,478 2,681,597

Note receivable 1,000,000 —

Total current assets 140,498,139 190,479,129

15 unchanged sentences

10,000,000 shares authorized;

Series A convertible preferred stock, 10,000 shares designated, 1,250 shares issued and outstanding at June 30, 2022 and December 31, 2021

Series A convertible preferred stock, 10,000 shares designated, 1,250 shares issued and outstanding at September 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value;

125,000,000 shares authorized;

70,419,388 and 70,364,912 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

70,466,885 and 70,364,912 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

70,467 70,359

8 unchanged sentences

For The Three Months Ended

June 30, 2022 For The Three Months Ended

June 30, 2021 For The Six Months Ended June 30, 2022 For The Six Months Ended June 30, 2021

September 30, 2022 For The Three Months Ended

September 30, 2021 For The Nine Months Ended September 30, 2022 For The Nine Months Ended September 30, 2021

License and other revenue $ 11,102 $ — $ 1,456,468 $ 12,382,779

6 unchanged sentences

(Loss) income from operations ( 12,803,856 ) ( 11,681,734 ) ( 43,375,249 ) 150,562,757

Other (expense) income, net ( 284,127 ) ( 2,517 ) ( 125,076 ) ( 52,250 )

Other income (expense), net 836,085 2,657 711,009 ( 49,593 )

(Loss) income before provision for income taxes ( 11,967,771 ) ( 11,679,077 ) ( 42,664,240 ) 150,513,164

Provision for income taxes — 1,473,084 — 1,973,361

(Benefit) provision for income taxes — ( 294,829 ) — 1,678,532

Net (loss) income $ ( 11,967,771 ) $ ( 11,384,248 ) $ ( 42,664,240 ) $ 148,834,632

6 unchanged sentences

Condensed Consolidated Statements of Comprehensive (Loss) Income

For The Three Months Ended June 30, 2022 For The Three Months Ended June 30, 2021 For The Six Months Ended June 30, 2022 For The Six Months Ended June 30, 2021

For The Three Months Ended

September 30, 2022 For The Three Months Ended

September 30, 2021 For The Nine Months Ended September 30, 2022 For The Nine Months Ended September 30, 2021

Net (loss) income $ ( 11,967,771 ) $ ( 11,384,248 ) $ ( 42,664,240 ) $ 148,834,632

Other comprehensive loss:

Unrealized loss on marketable securities ( 90,127 ) — ( 90,127 ) —

Unrealized gain (loss) on marketable securities 7,335 — ( 82,792 ) —

Comprehensive (loss) income $ ( 11,960,436 ) $ ( 11,384,248 ) $ ( 42,747,032 ) $ 148,834,632

1 unchanged sentence

OVID THERAPEUTICS INC.

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

Preferred Stock Common Stock Additional

3 unchanged sentences

Stock-based compensation expense — — — — 1,324,812 — — 1,324,812

Issuance of common stock from exercise of stock options — — 52,333 14 33,065 — — 33,079

Issuance of common stock from exercise of stock options and employee stock purchase plan — — 52,333 14 33,065 — — 33,079

Net loss — — — — — — ( 16,108,056 ) ( 16,108,056 )

5 unchanged sentences

Balance, June 30, 2022 1,250 1 70,419,388 70,414 354,221,191 ( 90,127 ) ( 202,053,983 ) 152,147,496

Stock-based compensation expense — — — — 1,782,043 — — 1,782,043

Issuance of common stock from exercise of stock options and employee stock purchase plan — — 47,497 53 81,576 — — 81,629

Other comprehensive income — — — — — 7,335 — 7,335

Net loss — — — — — — ( 11,967,771 ) ( 11,967,771 )

Balance, September 30, 2022 1,250 $ 1 70,466,885 $ 70,467 $ 356,084,810 $ ( 82,792 ) $ ( 214,021,753 ) $ 142,050,733

Preferred Stock Common Stock Additional

3 unchanged sentences

Stock-based compensation expense — — — — 1,320,002 — — 1,320,002

Issuance of common stock from employee stock purchase plan — — 34,256 34 130,139 — — 130,173

Issuance of common stock from exercise of stock options — — 10,400 11 20,791 — — 20,802

Issuance of common stock from exercise of stock options and employee stock purchase plan — — 44,656 45 150,930 — — 150,975

Conversion of series A convertible preferred stock to common stock ( 2,000 ) ( 2 ) 2,000,000 2,000 ( 1,998 ) — — —

5 unchanged sentences

Balance, June 30, 2021 1,250 1 67,833,947 67,834 340,614,895 — ( 133,973,217 ) 206,709,513

Stock-based compensation expense — — — — 1,161,911 — — 1,161,911

Issuance of common stock from exercise of stock options and employee stock purchase plan — — 182,794 183 534,402 — — 534,585

Net loss — — — — — — ( 11,384,248 ) ( 11,384,248 )

Balance, September 30, 2021 1,250 $ 1 68,016,741 $ 68,017 $ 342,311,208 $ — $ ( 145,357,465 ) $ 197,021,761

See accompanying notes to these unaudited condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

2022 Six Months Ended June 30,

Nine Months Ended September 30,

2022 Nine Months Ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Unrealized loss on equity investment 125,721 —

Change in accrued interest and accretion of discount on marketable securities ( 223,649 ) —

Interest income and accretion of discount on marketable securities ( 821,024 ) —

Stock-based compensation expense 4,827,072 3,739,258

13 unchanged sentences

Cash flows from investing activities:

Purchase of marketable securities, net of interest earned ( 79,416,203 ) —

Issuance of convertible short-term note ( 1,000,000 ) —

Purchase of long-term equity investment — ( 1,583,893 )

Purchase of marketable securities ( 108,857,928 ) —

Sales/maturities of marketable securities 30,000,000 —

Purchase of long-term equity investments ( 2,500,000 ) ( 1,631,992 )

Issuance of short-term note receivable ( 1,000,000 ) —

Purchase of property and equipment ( 1,104,440 ) ( 22,050 )

11 unchanged sentences

Right-of-use asset obtained in exchange for lease liability $ 15,791,769 $ —

Transaction costs related to purchase of long-term equity investment in accrued expenses $ — $ 24,054

Stock option exercise receivables in prepaid expenses and other current assets $ — $ 14,468

Purchase of property and equipment in accounts payable $ — $ 3,005

Conversion of short-term note receivable to long-term equity investment $ 1,000,000 $ —

See accompanying notes to these unaudited condensed consolidated financial statements

9 unchanged sentences

Historically, the Company’s major sources of cash have been composed of proceeds from various public and private offerings of its capital stock, revenue from collaboration agreements, option exercises and interest income.

As of June 30, 2022, the Company had approximately $ 152.4 million in cash, cash equivalents and marketable securities.

Since inception, the Company has generated $ 222.4 million in revenue, primarily pursuant to the Company’s royalty, license and termination agreement (the “Takeda License and Termination Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”).

As of September 30, 2022, the Company had approximately $ 137.9 million in cash, cash equivalents and marketable securities.

Since inception, the Company has generated $ 222.5 million in revenue, primarily from the Company’s royalty, license and termination agreement (the “Takeda License and Termination Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”).

Historically, the Company has incurred recurring losses, has experienced negative operating cash flows and requires significant cash resources to execute its business plans.

The Company has an accumulated deficit of $ 202.1 million as of June 30, 2022, working capital of $ 146.9 million and had cash used in operating activities of $ 33.4 million for the six months ended June 30, 2022.

The Company recorded net losses of $ 14.6 million and $ 30.7 million during the three and six months ended June 30, 2022, respectively, and expects to incur losses in subsequent periods for at least the next several years and is highly dependent on its ability to find additional sources of funding through either equity offerings, debt financings, collaborations, strategic alliances, licensing agreements or a combination of any such transactions.

Management believes that the Company’s existing cash, cash equivalents and marketable securities as of June 30, 2022 will be sufficient to fund its current operating plans through at least the next 12 months from the date of filing of the Company’s Quarterly Report on Form 10-Q.

The Company has an accumulated deficit of $ 214.0 million as of September 30, 2022, working capital of $ 133.8 million and had cash used in operating activities of $ 46.1 million for the nine months ended September 30, 2022.

The Company recorded net losses of $ 12.0 million and $ 42.7 million during the three and nine months ended September 30, 2022, respectively, and expects to incur losses in subsequent periods for at least the next several years and is highly dependent on its ability to find additional sources of funding through either equity offerings, debt financings, collaborations, strategic alliances, licensing agreements or a combination of any such transactions.

Management believes that the Company’s existing cash, cash equivalents and marketable securities as of September 30, 2022 will be sufficient to fund its current operating plans through at least the next 12 months from the date of filing of the Company’s Quarterly Report on Form 10-Q.

Adequate additional funding may not be available to the Company on acceptable terms or at all.

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(A) Unaudited Interim Condensed Consolidated Financial Statements

The interim condensed consolidated balance sheet at June 30, 2022, the condensed consolidated statements of operations, comprehensive (loss) income, cash flows, and stockholders’ equity for the three and six months ended June 30, 2022 and 2021 are unaudited.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

The interim condensed consolidated balance sheet at September 30, 2022, the condensed consolidated statements of operations, comprehensive (loss) income, cash flows, and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 are unaudited.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance

generally accepted accounting principles (“GAAP”) and following the requirements of the SEC for interim reporting.

1 unchanged sentence

These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of its financial information.

The results of operations for the three and six month periods ended June 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

The results of operations for the three and nine month periods ended September 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date.

8 unchanged sentences

(D) Marketable Securities

Marketable securities consists of investments in U.S.

Marketable securities consist of investments in U.S.

treasury instruments which are considered available-for-sale securities.

5 unchanged sentences

(F) Long-Term Equity Investments

Long-term equity investments consist of an equity investment in a private company through preferred shares, which are not considered in-substance common stock, that is accounted for at cost, with adjustments for observable changes in prices or impairments, and is classified within long-term equity investments on our consolidated balance sheets with adjustments recognized in other (expense) income, net on our consolidated statements of operations.

Long-term equity investments consist of an equity investment in the preferred shares of Gensaic, Inc., formerly M13 Therapeutics, Inc.

("Gensaic"), a privately held corporation.

The preferred shares are not considered in-substance common stock, and the investment is accounted for at cost, with adjustments for observable changes in prices or impairments, and is classified within long-term equity investments on our consolidated balance sheets with adjustments recognized in other (expense) income, net on our consolidated statements of operations.

The Company has determined that the equity investment does not have a readily determinable fair value and elected the measurement alternative.

1 unchanged sentence

Each reporting period, the Company performs a qualitative assessment to evaluate whether the investment is impaired.

The assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data.

The assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee's securities, and other publicly available data.

If the investment is impaired, the Company writes it down to its estimated fair value.

As of June 30, 2022 and December 31, 2021, the equity investment had a carrying value of $ 1.6 million.

As of September 30, 2022 and December 31, 2021, the equity investment had a carrying value of $ 5.1 million and $ 1.6 million, respectively.

Long-term equity investments also consist of an equity investment in the common shares of Marinus Pharmaceuticals, Inc.

1 unchanged sentence

The equity shares are marked-to-market at each reporting date with changes in the fair value being reflected in the carrying value of the investment on the Company's consolidated balance sheets and other income (expense) on the Company's consolidated statements of operations.

As of June 30, 2022, the equity investment in Marinus had a carrying value of approximately $ 0.6 million.

As of September 30, 2022, the equity investment in Marinus had a carrying value of approximately $ 0.9 million.

(G) Note Receivable

On March 17, 2022, the Company issued a convertible promissory note to a related party, in which the Company has a long-term equity investment, with a principal amount of $ 1.0 million.

The note has certain features that may allow the Company to acquire additional equity or to settle in cash.

Either option would result in the Company receiving an amount at least equal to the outstanding principal balance plus accrued and unpaid interest.

The Company will receive interest on the convertible promissory note at the rate of 1.5 % per annum payable upon conversion or maturity of the note on March 17, 2023.

The Company has elected to measure the note using the fair value option at each reporting date.

Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivatives due to changes in the fair value will be reflected in other income (expense), net, in the Company's consolidated statements of operations.

On March 17, 2022, the Company issued a convertible promissory note with a principal amount of $ 1.0 million to Gensaic.

The note included features that permitted the Company to acquire additional equity or to settle the note in cash.

In August 2022, the Company signed an agreement with Gensaic which resulted in the conversion of the note into additional equity which was recorded as a long-term equity investment in the condensed consolidated balance sheet.

The Company received interest on the convertible promissory note at the rate of 1.5 % per annum through the date of conversion.

(H) Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent

sources, while unobservable inputs reflect market assumptions.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions.

The hierarchy gives the highest priority to unadjusted quoted prices in

active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

2 unchanged sentences

The Company’s Level 1 assets consisted of investments in a U.S.

treasury money market fund and equity securities totaling approximately $ 55.6 million as of June 30, 2022.

treasury money market fund and equity securities totaling approximately $ 46.5 million as of September 30, 2022.

The Company's Level 1 assets consisted of money market funds and short-term investments of $ 187.6 million as of December 31, 2021.

2 unchanged sentences

The Company's Level 2 assets consisted of U.S.

treasury bills totaling approximately $ 94.5 million as of June 30, 2022.

treasury bills totaling approximately $ 89.6 million as of September 30, 2022.

The Company had no Level 2 assets or liabilities as of December 31, 2021.

1 unchanged sentence

Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The Company's Level 3 assets consists of the convertible note receivable totaling $ 1.0 million as of June 30, 2022.

There were no Level 3 assets or liabilities as of December 31, 2021.

There were no Level 3 assets or liabilities as of September 30, 2022 or December 31, 2021.

The carrying amounts reported in the balance sheets for cash and cash equivalents, other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments.

4 unchanged sentences

The Company determines the portion of the lease liability that is current as the difference between the calculated lease liability at the end of the current period and the lease liability that is projected 12 months from the current period.

The Company determined that there was no current lease liability for the period ended June 30, 2022, which is due primarily to the free rental period for the Company's Hudson Commons lease.

The Company determined that there was no current lease liability for the period ended September 30, 2022, which is due primarily to the free rental period for the Company's Hudson Commons lease.

(J) Revenue Recognition

27 unchanged sentences

NOTE 3 – CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

The following tables summarize the fair value of cash, cash equivalents and marketable securities as well as gross unrealized holding gains and losses as of June 30, 2022 and December 31, 2021:

June 30, 2022

The following tables summarize the fair value of cash, cash equivalents and marketable securities as well as gross unrealized holding gains and losses as of September 30, 2022 and December 31, 2021:

September 30, 2022

cost Gross unrealized

13 unchanged sentences

Total cash, cash equivalents and marketable securities $ 187,797,532 $ — $ — $ 187,797,532

The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of June 30, 2022 and December 31, 2021.

The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of September 30, 2022 and December 31, 2021.

NOTE 4 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment is summarized as follows:

September 30,

2022 December 31,

3 unchanged sentences

Total property and equipment, net $ 1,159,657 $ 242,757

Depreciation expense was $ 54,631 and $ 17,834 for the three months ended June 30, 2022 and 2021, respectively.

Depreciation expense was $ 85,470 and $ 36,478 for the six months ended June 30, 2022 and 2021, respectively.

Intangible assets, net of accumulated amortization was $ 328,797 and $ 164,092 as of June 30, 2022 and December 31, 2021, respectively, and are included in other assets.

Amortization expense was $ 32,153 and $ 35,381 for the three months ended June 30, 2022 and 2021, respectively.

Amortization expense was $ 86,636 and $ 91,473 for the six months ended June 30, 2022 and 2021, respectively.

Depreciation expense was $ 102,071 and $ 16,497 for the three months ended September 30, 2022 and 2021, respectively.

Depreciation expense was $ 187,541 and $ 52,974 for the nine months ended September 30, 2022 and 2021, respectively.

Intangible assets, net of accumulated amortization was $ 275,448 and $ 164,092 as of September 30, 2022 and December 31, 2021, respectively, and are included in other assets.

Amortization expense was $ 53,348 and $ 35,681 for the three months ended September 30, 2022 and 2021, respectively.

Amortization expense was $ 139,984 and $ 127,154 for the nine months ended September 30, 2022 and 2021, respectively.

NOTE 5 – LEASES

11 unchanged sentences

ROU asset and lease liabilities related to the Company's operating lease are as follows:

September 30,

Right-of-use asset $ 15,177,639

1 unchanged sentence

Long-term lease liability $ 16,248,833

The components of operating lease cost for the six months ended June 30, 2022 were as follows:

The components of operating lease cost for the nine months ended September 30, 2022 were as follows:

September 30,

Operating lease cost $ 1,264,219

10 unchanged sentences

Accrued expenses consist of the following:

September 30,

2022 December 31,

7 unchanged sentences

The Company’s capital structure consists of common stock and convertible preferred stock ("Preferred Stock").

Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is authorized to issue up to 125,000,000 shares of common stock and 10,000,000 shares of Preferred Stock.

Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is authorized to issue up to 125,000,000 shares

of common stock and 10,000,000 shares of Preferred Stock.

The Company has designated 1,250 of the 10,000,000 authorized shares of Preferred Stock as non-voting Series A Convertible Preferred Stock (“Series A Preferred Stock”).

5 unchanged sentences

In November 2020, the Company entered into a sales agreement (the “2020 ATM agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may offer and sell in “at the market offerings,” from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 75.0 million through Cowen acting as sales agent.

As of June 30, 2022, the Company has not sold any shares of its common stock under the 2020 ATM agreement.

There were 1,250 shares of Series A Preferred Stock outstanding as of June 30, 2022 and December 31, 2021.

As of September 30, 2022, the Company has not sold any shares of its common stock under the 2020 ATM agreement.

There were 1,250 shares of Series A Preferred Stock outstanding as of September 30, 2022 and December 31, 2021.

Each share of Series A Preferred Stock is convertible into 1,000 shares of common stock at any time at the holder’s option.

5 unchanged sentences

No dividends on the common stock shall be declared and paid unless dividends on the Preferred Stock have been declared and paid.

Through June 30, 2022, the Company has not declared any dividends.

Through September 30, 2022, the Company has not declared any dividends.

NOTE 8 – STOCK-BASED COMPENSATION

7 unchanged sentences

On January 1, 2022 and January 1, 2021, respectively, an additional 1,000,000 and 3,287,158 shares were reserved for issuance under the 2017 Plan.

As of June 30, 2022, there were 2,706,415 shares of the Company’s common stock reserved and available for issuance under the 2017 Plan.

As of September 30, 2022, there were 3,135,048 shares of the Company’s common stock reserved and available for issuance under the 2017 Plan.

The Company's Board of Directors adopted, and the Company's stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which became effective immediately prior to the execution of the underwriting agreement related to the Company’s initial public offering on May 4, 2017.

The 2017 ESPP allows employees to purchase common stock of the Company at a 15 % discount to the market price on designated semi-annual purchase dates.

During the three months ended June 30, 2022 and 2021, no shares were purchased under the 2017 ESPP, and the Company recorded expense of $ 20,176 and $ 37,849 , respectively.

During the six months ended June 30, 2022 and 2021, 38,583 and 34,256 shares, respectively, were purchased under the 2017 ESPP and the Company recorded expense of $ 41,195 and $ 56,636 , respectively.

During the three months ended September 30, 2022 and 2021, 37,872 and 26,234 shares were purchased under the 2017 ESPP, and the Company recorded expense of $ 20,687 and $ 3,000 , respectively.

During the nine months ended September 30, 2022 and 2021, 76,455 and 60,490 shares, respectively, were purchased under the 2017 ESPP and the Company recorded expense of $ 61,882 and $ 58,968 , respectively.

The initial reserve of shares of common stock that may be issued under the 2017 ESPP was 279,069 shares.

1 unchanged sentence

The Board acted prior to each of January 1, 2021 and January 1, 2022 to provide that there be no increase in the number of shares reserved for issuance under the 2017 ESPP on either such date.

As of June 30, 2022, there were 454,479 shares of the Company’s common stock reserved for issuance under the 2017 ESPP.

As of September 30, 2022, there were 416,607 shares of the Company’s common stock reserved and available for issuance under the 2017 ESPP.

Unless specified otherwise in an individual option agreement, stock options granted under the prior plan and the 2017 Plan generally have a ten-year term and a four-year graded vesting period.

The vesting requirement is generally conditioned upon the grantee’s continued service with the Company during the vesting period.

The vesting requirement is generally conditioned upon the

grantee’s continued service with the Company during the vesting period.

Once vested, all awards are exercisable from the date of grant until they expire.

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Performance-based option awards generally have similar terms, with vesting commencing on the date the performance condition is achieved and expire in accordance with the specific terms of the agreement.

At June 30, 2022, there were 150,000 performance-based options outstanding and unvested that include options to be granted upon the achievement of certain research and development milestones.

The fair value of options granted during the three and six months ended June 30, 2022 and 2021 was estimated using the Black-Scholes option valuation model.

At September 30, 2022, there were 150,000 performance-based options outstanding and unvested that include options to be granted upon the achievement of certain research and development milestones.

The fair value of options granted during the three and nine months ended September 30, 2022 and 2021 was estimated using the Black-Scholes option valuation model.

The inputs for the Black-Scholes option valuation model require significant assumptions that are detailed in the table below.

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In the event the Company terminates any of its consulting agreements, the unvested options underlying the agreements would also be canceled.

The Company did no t grant any stock options to nonemployee consultants for services rendered during the three months ended June 30, 2022 and 2021.

The Company granted no stock options to nonemployee consultants for services rendered during the six months ended June 30, 2022, and 170,000 during the six months ended June 30, 2021.

There were 130,834 and 191,875 unvested nonemployee options outstanding as of June 30, 2022 and 2021, respectively.

Total expense recognized related to nonemployee stock options for the three months ended June 30, 2022 and 2021, was $ 160,337 and $ 55,310 , respectively.

Total expense recognized related to nonemployee stock options for the six months ended June 30, 2022 and 2021 was $ 355,107 and $ 91,000 , respectively.

Total unrecognized compensation expenses related to the nonemployee stock options was $ 1.1 million as of June 30, 2022.

The Company did not recognize any expense for nonemployee performance-based option awards during the three months or six months ended June 30, 2022 or 2021.

The Company granted 2,426,750 and 363,000 stock options to employees during the three months ended June 30, 2022 and 2021, respectively.

The Company granted 4,296,355 and 1,006,600 stock options to employees during the six months ended June 30, 2022 and 2021 respectively.

There were 7,354,964 and 4,749,550 unvested employee options outstanding as of June 30, 2022, and 2021, respectively.

Total expense recognized related to the employee stock options for the three months ended June 30, 2022 and 2021 was $ 1.5 million and $ 1.2 million, respectively.

Total expense recognized related to the employee stock options for the six months ended June 30, 2022 and 2021 was $ 2.6 million and $ 2.4 million, respectively.

Total unrecognized compensation expense related to employee stock options was $ 14.3 million as of June 30, 2022.

During the three and six months ended June 30, 2022 and 2021, the Company did not recognize any expense for employee performance-based option awards.

The Company did no t grant any stock options to nonemployee consultants for services rendered during the three months ended September 30, 2022 and 2021.

The Company granted no stock options to nonemployee consultants for services rendered during the nine months ended September 30, 2022, and 170,000 during the nine months ended September 30, 2021.

There were 130,834 and 186,563 unvested nonemployee options outstanding as of September 30, 2022 and 2021, respectively.

Total expense recognized related to nonemployee stock options for the three months ended September 30, 2022 and 2021, was $ 106,806 and $ 247,000 , respectively.

Total expense recognized related to nonemployee stock options for the nine months ended September 30, 2022 and 2021 was $ 461,913 and $ 337,000 , respectively.

Total unrecognized compensation expenses related to the nonemployee stock options was $ 0.7 million as of September 30, 2022.

The Company did not recognize any expense for nonemployee performance-based option awards during the three months or nine months ended September 30, 2022 or 2021.

The Company granted 266,800 and 556,345 stock options to employees during the three months ended September 30, 2022 and 2021, respectively.

The Company granted 4,555,641 and 1,392,345 stock options to employees during the nine months ended September 30, 2022 and 2021 respectively.

There were 7,010,800 and 4,660,093 unvested employee options outstanding as of September 30, 2022, and 2021, respectively.

Total expense recognized related to the employee stock options for the three months ended September 30, 2022 and 2021 was $ 1.6 million and $ 0.9 million, respectively.

Total expense recognized related to the employee stock options for the nine months ended September 30, 2022 and 2021 was $ 4.3 million and $ 3.3 million, respectively.

Total unrecognized compensation expense related to employee stock options was $ 13.0 million as of September 30, 2022.

During the three and nine months ended September 30, 2022, the Company recognized $ 94,000 for employee performance-based option awards.

No expense for employee performance-based options was recognized in the same period in 2021.

The Company’s stock-based compensation expense was recognized in operating expense as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Total $ 1,782,043 $ 1,161,911 $ 4,827,072 $ 3,739,258

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Total $ 1,782,043 $ 1,161,911 $ 4,827,072 $ 3,739,258

The fair value of employee options granted during the three and six months ended June 30, 2022 and 2021 was estimated by utilizing the following assumptions:

Three Months Ended June 30, Six Months Ended June 30,

The fair value of employee options granted during the three and nine months ended September 30, 2022 and 2021 was estimated by utilizing the following assumptions:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

5 unchanged sentences

Fair value of option on grant date $ 1.61 $ 2.71 $ 2.13 $ 1.43

The fair value of nonemployee options granted during the three and six months ended June 30, 2022 and 2021 was estimated by utilizing the following assumptions:

Three Months Ended June 30, Six Months Ended June 30,

The fair value of nonemployee options granted during the three and nine months ended September 30, 2022 and 2021 was estimated by utilizing the following assumptions:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

13 unchanged sentences

Forfeited or expired ( 2,293,622 ) 5.63

Options outstanding June 30, 2022 13,451,517 $ 4.21 7.53 $ 329,651

Vested and exercisable at June 30, 2022 5,965,719 $ 5.44 5.69 $ 297,953

At June 30, 2022 there was approximately $ 15.4 million of unamortized share–based compensation expense related to employee and nonemployee grants, which is expected to be recognized over a remaining average vesting period of 2.53 years.

Options outstanding September 30, 2022 13,013,259 $ 4.13 7.63 $ 56,953

Vested and exercisable at September 30, 2022 5,873,500 $ 5.30 6.10 $ 56,192

At September 30, 2022 there was approximately $ 13.0 million of unamortized share–based compensation expense related to employee and nonemployee grants, which is expected to be recognized over a remaining average vesting period of 2.39 years.

NOTE 9 – INCOME TAXES

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Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

As of June 30, 2022, the Company was in a pre-tax loss position, and is anticipated to remain so throughout the year.

For the three and six months ended June 30, 2022, the Company did no t record a tax provision.

As of September 30, 2022, the Company was in a pre-tax loss position, and is anticipated to remain so throughout the year.

For the three and nine months ended September 30, 2022, the Company did no t record a tax provision.

In assessing the realizability of deferred tax assets, management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

2 unchanged sentences

This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income.

Significant weight is given to positive and negative evidence that is objectively verifiable.

Based on these factors, including cumulative losses in recent years, the Company continues to maintain a full valuation allowance against its net deferred tax assets as of June 30, 2022.

Significant weight is given to positive and negative evidence

that is objectively verifiable.

Based on these factors, including cumulative losses in recent years, the Company continues to maintain a full valuation allowance against its net deferred tax assets as of September 30, 2022.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

33 unchanged sentences

Upon execution of the agreement, the Company was obligated to pay an upfront cash payment of $ 5.0 million and issued shares of the Company's common stock in an amount that equaled $ 7.3 million based on the volume-weighted average price of shares of the Company's common stock for the 30 business days immediately preceding the execution date of the transaction.

Since the intangibles acquired in the AstraZeneca license agreement do not have an alternative future use, all costs incurred were treated as research and development expense.

Since the intangibles acquired in the AstraZeneca license agreement do not

have an alternative future use, all costs incurred were treated as research and development expense.

The Company recorded a total of $ 12.3 million as research and development expense related to this agreement during December 2021.

1 unchanged sentence

The first payment of $ 3.0 million is due upon the successful completion of the first Phase 2 clinical study of a licensed product following a positive biomarker readout in a Phase 1 clinical study.

As of June 30, 2022, none of these contingent payments were considered probable.

Gensaic Collaboration and Option Agreement

In August 2022, the Company entered into a collaboration and option agreement (the "Collaboration Agreement") with Gensaic.

The Collaboration Agreement involves the research and development of phage-derived particle ("PDP") products on Gensaic's proprietary platform for certain central nervous system rare disorder targets.

Under the Collaboration Agreement, Gensaic grants the Company an exclusive option to obtain an exclusive license with respect to certain identified lead PDP products, which are exercisable at any time prior to the expiration of the option period.

Once a product is identified by the Company that demonstrates sufficient efficacy, the Company may exercise its option with respect to the specific research program for that PDP product.

The Company shall reimburse Gensaic for Gensaic's research costs related to the specific research plan for PDP products identified, The research plan and budget shall be mutually agreed on by the parties and shall not exceed $ 3.0 million in any research year.

The Company will record these reimbursement payments as research and development costs in the period the research costs are incurred.

If a product is ultimately commercialized under this agreement, the Company shall make tiered royalty payments to Gensaic in the mid-single to low double-digit range based on the net sales of all licensed PDP products during the royalty term.

The Company is also responsible for potential tiered milestone payments of up to $ 452 million based upon the achievement of certain sales milestone events and developmental milestone approvals for three or more products.

Gensaic also has the option to become a collaborative partner in the development and commercialization of PDP products in exchange for a fee based on a percentage of the costs incurred by the Company through the date Gensaic exercises its option.

The Company would no longer be required to pay Gensaic royalty or milestone payments if Gensaic elects to exercise its option .

The Company may terminate this agreement by providing written notice to Gensaic 90 days in advance of the termination date.

As of September 30, 2022, none of these contingent payments were considered probable.

Contingencies

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(2) completion of certain ongoing trials;

(3) transfer of a specified amount of compound and related information;

(3) transfer of a specified amount of compound and related

(4) potential for funding 35 % of the cost for Angelini future trials limited to $ 7.0 million;

9 unchanged sentences

The transaction price was allocated based on the standalone selling price of the license and the ongoing trials.

During the six months ended June 30, 2022, no revenue was recognized pursuant to the Angelini License Agreement.

During the six months ended June 30, 2021 and effective upon termination of the Angelini License Agreement, the Company recognized $ 12.4 million of revenue consisting of $ 5.4 million of license revenue related to ongoing trials and the $ 7.0 million related to the potential 35 % funding of the cost for Angelini future trials.

During the nine months ended September 30, 2022, no revenue was recognized pursuant to the Angelini License Agreement.

During the nine months ended September 30, 2021 and effective upon termination of the Angelini License Agreement, the Company recognized $ 12.4 million of revenue consisting of $ 5.4 million of license revenue related to ongoing trials and the $ 7.0 million related to the potential 35 % funding of the cost for Angelini future trials.

Takeda Collaboration

14 unchanged sentences

Therefore, since they are not material in the context of the Takeda License and Termination Agreement, the full upfront fee was allocated to the two performance obligations satisfied at closing.

During the six months ended June 30, 2022, no expense was recognized pursuant to the Takeda License and Termination Agreement.

During the six months ended June 30, 2021, the Company recognized a credit in research and development expenses of $ 2.6 million and recognized $ 0.1 million in general and administrative expenses representing costs which were reimbursed to the Company from Takeda.

During the nine months ended September 30, 2022, no expense was recognized pursuant to the Takeda License and Termination Agreement.

During the nine months ended September 30, 2021, the Company recognized a credit in research and development expenses of $ 2.6 million and recognized $ 0.1 million in general and administrative expenses representing costs which were reimbursed to the Company from Takeda.

Healx License and Option Agreement

1 unchanged sentence

Under the terms of the Healx License and Option Agreement, Healx has secured a one-year option to investigate gaboxadol (OV101) as part of a potential combination therapy for Fragile X syndrome in a Phase 2A clinical trial, as well as a treatment for other indications, for an upfront payment of $ 0.5 million, and fees to support prosecution and maintenance of our relevant intellectual property rights.

At the end of the one-year option period, Healx has the option to secure rights to an exclusive license under our relevant intellectual property rights, in exchange for an additional payment of $ 2.0 million, development and commercial milestone payments, and low to mid-tier double digit royalties.

At the end of the one-year option period, Healx has the option to secure rights to an exclusive license under the Company's relevant intellectual property rights, in exchange for an additional payment of $ 2.0 million, development and commercial milestone payments, and low to mid-tier double digit royalties.

Royalties are payable on a country-by-country and product-by-product basis during the period beginning on the date of the first commercial sale of such product in such country and ending on the later to occur of the expiration of patent rights covering the product in such country and a specified anniversary of such first commercial sale.

4 unchanged sentences

The term of the Healx License and Option Agreement will continue until the later of (a) the expiration of all relevant royalty terms, or in the event that Healx does not exercise its option during the option period defined in the Healx License and Option Agreement, or the Option Period, the expiration of such period, or (b) in the event that Healx does exercise its option during the Option Period, and the Company does not exercise the Ovid Opt-In Right during the period of time we have to opt-in, or the Opt-In Period, or the opt-in terms are otherwise terminated, upon the expiration of all payment obligations, or (c) in the event that Healx does exercise the Option during the Option Period, and the Company does exercise the Ovid Opt-In Right during the Opt-In Period, such time as neither Healx nor Ovid is continuing to exploit the gaboxadol.

As part of the revised contractual obligations with Lundbeck, Ovid will owe Lundbeck a share of all milestone and royalty payments received from Healx, if we do not

exercise the Ovid Opt-In Right.

If we do exercise the Ovid Opt-In Right to co-develop and co-commercialize the program with Healx, we will owe a share of the net profit share to Lundbeck.

No revenue was recognized relating to this agreement during the three months ended June 30, 2022.

During the six months ended June 30, 2022, the Company recorded revenue of $ 0.5 million associated with the Healx License and Option Agreement.

As part of the revised contractual obligations with Lundbeck, Ovid will owe Lundbeck a share of all milestone and royalty payments received from Healx, if the Company does not exercise the Ovid Opt-In Right.

If the Company does exercise the Ovid Opt-In Right to co-develop and co-commercialize the program with Healx, the Company will owe a share of the net profit share to Lundbeck.

No revenue was recognized relating to this agreement during the three months ended September 30, 2022.

During the nine months ended September 30, 2022, the Company recorded revenue of $ 0.5 million associated with the Healx License and Option Agreement.

Marinus Pharmaceuticals Out-License Agreement

4 unchanged sentences

The Company recorded revenue and an associated investment in equity securities of approximately $ 0.9 million related to the patent license agreement on March 18, 2022, based on the price of Marinus common stock on March 1, 2022.

The Company had an unrealized loss on the Marinus common stock of $ 0.6 million and $ 0.3 million for the three and six months ended June 30, 2022, which was recorded as an unrealized loss on equity securities and is reflected in other (expense) income, net in the condensed consolidated statements of operation s.

The Company had an unrealized gain on the Marinus common stock of $ 0.2 million and unrealized loss of $ 0.1 million for the three and nine months ended September 30, 2022, which was recorded as an unrealized loss on equity securities and is reflected in other (expense) income, net in the condensed consolidated statements of operation s.

NOTE 12 – RELATED PARTY TRANSACTIONS

13 unchanged sentences

The following table summarizes the calculation of basic and diluted net (loss) income per share:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Net (loss) income attributable to common stockholders $ ( 11,967,771 ) $ ( 11,384,248 ) $ ( 42,664,240 ) $ 144,989,259

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Weighted average common shares outstanding used in computing net income (loss) per share - basic 70,430,554 67,929,894 70,408,657 67,282,495

Dilutive effect of outstanding stock options — — — 565,538

Weighted average common shares outstanding used in computing net income (loss) per share - diluted 70,430,554 67,929,894 70,408,657 67,848,033

2 unchanged sentences

The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as they would be anti-dilutive:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements