10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission File Number: 001-34703

Alimera Sciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-0028718
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6310 Town Square, Suite 400 Alpharetta, GA	30005
(Address of principal executive offices)	(Zip Code)

(678) 990-5740

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ALIM	The Nasdaq Stock Market LLC (Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o  No  x

As of August 9, 2023, there were 8,801,727 shares of the registrant’s Common Stock issued and outstanding.

1

ALIMERA SCIENCES, INC.

QUARTERLY REPORT ON FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	4
Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	4
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	5
Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	7
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit for the three and six months ended June 30, 2023 and 2022	8
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures about Market Risk	48
Item 4. Controls and Procedures	48
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	49
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3. Defaults Upon Senior Securities	49
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	51
Signatures	52

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2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND PROJECTIONS

Various statements in this report of Alimera Sciences, Inc. (we, our, Alimera or the Company) are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this report, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. These statements are subject to risks and uncertainties (some of which are beyond our control) and are based on information currently available to our management. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “contemplates,” “predict,” “project,” “target,” “likely,” “potential,” “continue,” “ongoing,” “will,” “would,” “should,” “could,” or the negative of these terms and similar expressions or words, identify forward-looking statements. The events and circumstances reflected in our forward-looking statements may not occur and actual results could differ materially from those projected in our forward-looking statements.

All written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We caution investors not to rely on the forward-looking statements we make or that are made on our behalf as predictions of future events. We undertake no obligation and specifically decline any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

We encourage you to read management’s discussion and analysis of our financial condition and results of operations and our accompanying unaudited interim condensed consolidated financial statements and notes thereto (Interim Financial Statements) contained in this Quarterly Report on Form 10-Q and our audited financial statements included in the 2022 Form 10-K. There can be no assurance that we will in fact achieve the actual results or developments we anticipate or, even if we do substantially realize them, that they will have the expected consequences to, or effects on, us. Therefore, we can give no assurances that we will achieve the outcomes stated in those forward-looking statements, projections and estimates.

 
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3

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

ALIMERA SCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2023		2022
	(In thousands, except share and per share data)
CURRENT ASSETS:
Cash and cash equivalents	$	18,775	$	5,274
Restricted cash		32		30
Accounts receivable, net		22,589		19,612
Prepaid expenses and other current assets		3,571		2,892
Inventory		1,055		1,605
Total current assets		46,022		29,413
NON-CURRENT ASSETS:
Property and equipment, net		2,465		2,525
Right of use assets, net		1,277		1,395
Intangible assets, net		104,935		8,957
Deferred tax asset		131		129
Warrant asset		93		183
TOTAL ASSETS	$	154,923	$	42,602
CURRENT LIABILITIES:
Accounts payable	$	8,040	$	10,088
Accrued expenses		6,002		3,998
Notes payable		—		25,313
Finance lease obligations		203		333
Total current liabilities		14,245		39,732
NON-CURRENT LIABILITIES:
Notes payable, net of discount		63,954		18,683
Common stock warrants		3,471		—
Accrued licensor payments		21,079		—
Other non-current liabilities		5,944		4,995
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock, $.01 par value — 10,000,000 shares authorized at June 30, 2023 and December 31, 2022:
Series A Convertible Preferred Stock, none authorized, issued and outstanding at June 30, 2023; 1,300,000 authorized and 600,000 issued and outstanding at December 31, 2022; liquidation preference of $24,000 at December 31, 2022		—		19,227
Series B Convertible Preferred Stock, 78,617 authorized, issued and outstanding at June 30, 2023; liquidation preference of $XX,000 at June 30, 2023; none authorized, issued and outstanding at December 31, 2022		74,725		—
Common stock, $.01 par value — 150,000,000 shares authorized, 8,803,727 shares issued and outstanding at June 30, 2023 and 6,995,513 shares issued and outstanding at December 31, 2022		88		70
Additional paid-in capital		386,979		378,238
Accumulated deficit		(412,779)		(415,388)
Accumulated other comprehensive loss		(2,783)		(2,955)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		46,230		(20,808)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	154,923	$	42,602

See Notes to Unaudited Interim Condensed Consolidated Financial Statements (Interim Financial Statements).

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4

ALIMERA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands, except share and per share data)
REVENUE:
PRODUCT REVENUE, NET	$	17,538	$	14,604	$	31,084	$	26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(2,425)		(2,166)		(4,453)		(3,846)
GROSS PROFIT		15,113		12,438		26,631		22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		3,648		3,932		7,812		7,515
GENERAL AND ADMINISTRATIVE EXPENSES		4,373		2,945		8,544		6,185
SALES AND MARKETING EXPENSES		6,434		6,865		12,238		13,718
DEPRECIATION AND AMORTIZATION		1,866		670		2,547		1,359
OPERATING EXPENSES		16,321		14,412		31,141		28,777
LOSS FROM OPERATIONS		(1,208)		(1,974)		(4,510)		(6,121)
INTEREST EXPENSE AND OTHER		(1,694)		(1,383)		(3,361)		(2,747)
UNREALIZED FOREIGN CURRENCY (LOSS) GAIN, NET		(7)		38		(20)		146
LOSS ON EXTINGUISHMENT OF DEBT		(1,079)		—		(1,079)		—
CHANGE IN FAIR VALUE OF WARRANT ASSET		(105)		221		(91)		(331)
CHANGE IN FAIR VALUE OF WARRANT LIABILITY		(5,911)		—		(5,911)		—
NET LOSS BEFORE TAXES		(10,004)		(3,098)		(14,972)		(9,053)
INCOME TAX PROVISION		(25)		(17)		(25)		(17)
NET LOSS		(10,029)		(3,115)		(14,997)		(9,070)
PREFERRED STOCK DIVIDENDS		(669)		—		(683)
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS	$	(10,698)	$	(3,115)	$	(15,680)	$	(9,070)
NET LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDERS — Basic and Diluted	$	(1.32)	$	(0.45)	$	(2.07)	$	(1.30)
WEIGHTED AVERAGE SHARES OUTSTANDING — Basic and Diluted		8,093,640		6,999,707		7,565,868		6,995,247

See Notes to Interim Financial Statements.

 
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5

ALIMERA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
NET LOSS	$	(10,029)	$	(3,115)	$	(14,997)	$	(9,070)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustments		—		(923)		172		(1,279)
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME		—		(923)		172		(1,279)
COMPREHENSIVE LOSS	$	(10,029)	$	(4,038)	$	(14,825)	$	(10,349)

See Notes to Interim Financial Statements.

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6

ALIMERA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
	2023		2022
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(14,997)	$	(9,070)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,547		1,359
Loss on extinguishment of debt		1,079		—
Unrealized foreign currency transaction gain, net		20		(146)
Amortization of debt discount and deferred financing costs		488		552
Stock-based compensation expense		442		581
Change in fair value of warrant asset		91		331
Change in fair value of warrant liability		5,911		—
Changes in assets and liabilities:
Accounts receivable		(2,859)		(1,725)
Prepaid expenses and other current assets		(539)		507
Inventory		559		942
Accounts payable		(2,066)		(880)
Accrued expenses and other current liabilities		202		(181)
Other long-term liabilities		917		(81)
Net cash used in operating activities		(8,205)		(7,811)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(171)		(41)
Purchase of intangible assets		(75,272)		—
Net cash used in investing activities		(75,443)		(41)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series B Convertible Preferred Stock		78,339		—
Series B Convertible Preferred Stock issuance costs		(509)		—
Proceeds from issuance of common stock		2,404		40
Issuance of debt		22,500		—
Payment of debt costs		(4,108)		—
Payment of finance lease obligations		(251)		(204)
Repurchase of Series A Preferred Stock		(938)		—
Repurchase of common stock		(314)		—
Net cash provided by (used in) financing activities		97,123		(164)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		28		(638)
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		13,503		(8,654)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period		5,304		16,544
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — End of period	$	18,807	$	7,890
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	3,136	$	2,145
Cash paid for income taxes	$	21	$	182
Supplemental schedule of non-cash investing and financing activities:
Note payable end of term payment accrued but unpaid	$	3,375	$	2,250
Intangible asset acquired but unpaid	$	22,850	$	—

See Notes to Interim Financial Statements.

7

ALIMERA SCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

				Series A			Series B
				Convertible			Convertible							Accumulated
	Common Stock			Preferred Stock			Preferred Stock			Additional				Other
										Paid-In		Accumulated		Comprehensive
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Total
2022	(In thousands, except share data)
Balance, December 31, 2021	6,935,154	$	69	600,000	$	19,227	—	$	—	$	377,229	$	(397,281)	$	(1,849)	$	(2,605)
Issuance of common stock, net of issuance costs	57,500		1	—		—	—		—		—		—		—		1
Stock-based compensation expense	—		—	—		—	—		—		312		—		—		312
Net loss	—		—	—		—	—		—		—		(5,955)		—		(5,955)
Foreign currency translation adjustments	—		—	—		—	—		—		—		—		(356)		(356)
Balance, March 31, 2022	6,992,654		70	600,000		19,227	—		—		377,541		(403,236)		(2,205)		(8,603)
Issuance of common stock, net of issuance costs	10,307		—	—		—	—		—		39		—		—		39
Forfeitures of restricted stock	(7,500)		—	—		—	—		—		—		—		—		—
Stock-based compensation expense	—		—	—		—	—		—		267		—		—		267
Net loss	—		—	—		—	—		—		—		(3,115)		—		(3,115)
Foreign currency translation adjustments	—		—	—		—	—		—		—		—		(923)		(923)
Balance, June 30, 2022	6,995,461	$	70	600,000	$	19,227	—	$	—	$	377,847	$	(406,351)	$	(3,484)	$	(12,335)
2023
Balance, December 31, 2022	6,995,513	$	70	600,000	$	19,227	—	$	—	$	378,238	$	(415,388)	$	(2,955)	$	(20,808)
Issuance of common stock, net of issuance costs	597,000		6	—		—	—		—		(6)		—		—		—
Repurchase of common stock	(200,919)		(2)	—		—	—		—		(312)		—		—		(314)
Repurchase of Preferred Stock - Series A	—		—	(600,000)		(19,227)	—		—		—		18,289		—		(938)
Issuance of Preferred Stock - Series B	—		—	—		—	12,000		7,714		—		—		—		7,714
Preferred stock dividends	—		—	—		—	—		14		—		(14)		—		—
Stock-based compensation expense	—		—	—		—	—		—		226		—		—		226
Net loss	—		—	—		—	—		—		—		(4,968)		—		(4,968)
Foreign currency translation adjustments	—		—	—		—	—		—		—		—		172		172
Balance, March 31, 2023	7,391,594		74	—		—	12,000		7,728		378,146		(402,081)		(2,783)		(18,916)
Issuance of common stock, net of issuance costs	1,415,133		14	—		—	—		—		34		—		—		48
Forfeitures of restricted stock	(3,000)		—	—		—	—		—		—		—		—		—
Issuance of Preferred Stock - Series B	—		—	—		—	66,617		66,328		2,355		—		—		68,683
Preferred stock dividends	—		—	—		—	—		669		—		(669)		—		—
Forfeiture of common stock warrants	—		—	—		—	—		—		6,227		—		—		6,227
Stock-based compensation expense	—		—	—		—	—		—		217		—		—		217
Net loss	—		—	—		—	—		—		—		(10,029)		—		(10,029)
Foreign currency translation adjustments	—		—	—		—	—		—		—		—		—		—
Balance, June 30, 2023	8,803,727	$	88	—	$	—	78,617	$	74,725	$	386,979	$	(412,779)	$	(2,783)	$	46,230

See Notes to Interim Financial Statements.

8

1. NATURE OF OPERATIONS

Alimera Sciences, Inc., together with its wholly owned subsidiaries (the Company), is a pharmaceutical company that specializes in the commercialization and development of ophthalmic pharmaceuticals. The Company was formed on June 4, 2003 under the laws of the State of Delaware.

The Company presently focuses on diseases affecting the retina, because the Company believes these diseases are not well treated with current therapies and affect millions of people globally. The Company’s products are ILUVIEN^® (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in 24 countries for the treatment of diabetic macular edema (DME), and YUTIQ^® (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the United States for the treatment and prevention of uveitis.

In the U.S. and certain other countries outside Europe, ILUVIEN is indicated for the treatment of DME in patients who have been previously treated with a course of corticosteroids and did not have a clinically significant rise in intraocular pressure. In 17 countries in Europe, ILUVIEN is indicated for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies. In addition, ILUVIEN has received marketing authorization in 17 European countries and reimbursement in ten countries for the prevention of relapse in recurrent non-infectious uveitis affecting the posterior segment (NIU-PS).

The Company markets ILUVIEN directly in the U.S., Germany, the U.K., Portugal and Ireland. In addition, the Company has entered into various agreements under which distributors are providing or will provide regulatory, reimbursement and sales and marketing support for ILUVIEN in Austria, Belgium, the Czech Republic, Denmark, Finland, France, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Australia, New Zealand and several countries in the Middle East. In addition, the Company has granted an exclusive license to Ocumension Therapeutics for the development and commercialization of the Company’s 0.19mg fluocinolone acetonide intravitreal injection in China, East Asia and the Western Pacific. As of June 30, 2023, the Company has recognized sales of ILUVIEN to its international distributors in the Middle East, China, Austria, Belgium, Czech Republic, France, Italy, Luxembourg, Spain, the Netherlands, and the Nordic Region.

In the U.S., YUTIQ is indicated for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. The Company has the rights to commercialize YUTIQ under a product rights agreement dated May 17, 2023 (the Product Rights Agreement) with EyePoint Pharmaceuticals, Inc. (EyePoint Parent) in the entire world, except Europe, the Middle East and Africa as the Company had previously licensed from EyePoint Pharmaceuticals US, Inc. (EyePoint) rights in those territories to certain products, which included YUTIQ (known as ILUVIEN® in Europe, the Middle East and Africa) for the prevention of relapse in recurrent non-infectious uveitis affecting the posterior segment. (See Note 17) The Product Rights Agreement also excludes any rights to YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint Parent and Ocumension Therapeutics.

2. BASIS OF PRESENTATION

The Company has prepared the accompanying unaudited interim condensed consolidated financial statements and notes thereto (Interim Financial Statements) in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, these Interim Financial Statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying Interim Financial Statements reflect all adjustments, which include normal recurring adjustments, necessary to present fairly the Company’s interim financial information.

The accompanying Interim Financial Statements and related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022, and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 31, 2023 (the 2022 Form 10-K). The financial results for any interim period are not necessarily indicative of the expected financial results for the full year.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2022. Certain of the Company’s more significant accounting policies adopted in the current year are as follows:

9

Acquisition of Intangible Assets

The Company accounts for the acquisition of pharmaceutical product licenses as an asset acquisition in accordance with FASB ASC 805 – Business Combinations (“ASC 805”). ASC 805 specifies that if substantially all of the fair value of the gross assets acquired in a transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business and is recorded as an asset acquisition. Under this model, the Company assigns the cost of the transaction to the acquired tangible assets, to the identified intangible assets and liabilities and any above or below-market contracts. The purchase price, including the direct amounts paid for the net assets in the transaction and any acquisition costs incurred that relate directly to the acquisition, is assigned based on the relative fair values of the assets acquired and liabilities assumed. The fair value of any identified intangible assets is determined at the acquisition date based on inputs and other factors based on market participants.

Adoption of New Accounting Standard

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. The standard became effective for the Company on January 1, 2023. The adoption of this ASU did not have a material impact on its financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this ASU require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

Accounting Standards Issued but Not Yet Effective

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard was available until December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company does not anticipate the adoption of this ASU will have a material impact on its financial statements.

4. REVENUE RECOGNITION

Overview

The Company recognizes revenue when a customer obtains control of the related good or service. The amount recognized reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606 Revenue from Contracts with Customers, the Company performs the following steps as outlined in the guidance: (1) identify the contract with the customer, (2) identify the performance obligations within the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the entity satisfies a performance obligation. At the inception of a contract, the contract is evaluated to determine if it falls within the scope of ASC 606, followed by the Company’s assessment of the goods or services promised within each contract, assessment of whether the promised good or service is distinct and determination of the performance obligations. The Company then recognizes revenue based on the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions related to the performance obligations.

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Net Product Sales

The Company sells its products to major pharmaceutical distributors, pharmacies, hospitals and wholesalers (collectively, its Customers). In addition to distribution agreements with Customers, the Company enters into arrangements with healthcare providers and payors that provide for government-mandated and/or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s products. The Company recognizes revenues from product sales at a point in time when the Customer obtains control, typically upon delivery. The Company accrues for fulfillment costs when the related revenue is recognized. Taxes collected from Customers relating to product sales and remitted to governmental authorities are excluded from revenues.

Estimates of Variable Consideration

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for reserves related to statutory rebates to State Medicaid and other government agencies; commercial rebates and fees to Managed Care Organizations (MCOs), Group Purchasing Organizations (GPOs), distributors, and specialty pharmacies; product returns; sales discounts (including trade discounts); distributor costs; wholesaler chargebacks; and allowances for patient assistance programs relating to the Company’s sales of its products.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales. Management’s estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and Customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in the net sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. If actual results vary, the Company may adjust these estimates, which could have an effect on earnings in the period of adjustment.

With respect to the Company’s international contracts with third-party distributors, certain contracts have elements of variable consideration, and management reviews those contracts on a regular basis and makes estimates of revenue based on historical ordering patterns and known market events and data. The amount of variable consideration included in net sales in each period could vary depending on the terms of these contracts and the probability of reversal in future periods.

Consideration Payable to Customers

Distribution service fees are payments issued to distributors for compliance with various contractually defined inventory management practices or services provided to support patient access to a product. Distribution service fees reserves are based on the terms of each individual contract and are classified within accrued expenses and are recorded as a reduction of revenue.

Product Returns

The Company’s policies provide for product returns in the following circumstances: (a) expiration of shelf life on certain products; (b) product damaged while in the Customer’s possession; and (c) following product recalls. Generally, returns for expired product are accepted three months before and up to one year after the expiration date of the related product, and the related product is destroyed after it is returned. The Company may, at its option, either refund the sales price paid by the Customer by issuing a credit or exchanging the returned product for replacement inventory. The Company typically does not provide cash refunds. The Company estimates the proportion of recorded revenue that will result in a return by considering relevant factors, including historical returns experience, the estimated level of inventory in the distribution channel, the shelf life of products and product recalls, if any.

The estimation process for product returns involves, in each case, several interrelating assumptions, which vary for each Customer. The Company estimates the amount of its product sales that may be returned by its Customers and records this estimate as a reduction of revenue from product sales in the period the related revenue is recognized, and because this returned product cannot be resold, there is no corresponding asset for product returns. Through the date of this report, product returns have been minimal.

License Revenue

The Company enters into agreements in which it licenses certain rights to its products to partner companies that act as distributors. The terms of these agreements may include payment to the Company of one or more of the following: non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

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Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions related to the performance obligations.

The Company will recognize sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606. For those milestone payments which are contingent on the occurrence of particular future events, the Company determines that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the expected value method. As such, the Company assesses each milestone to determine the probability of and substance behind achieving each milestone. Given the inherent uncertainty associated with these future events, the Company will not recognize revenue from such milestones until there is a high probability of occurrence, which typically occurs near or upon achievement of the event.

Customer Payment Obligations

The Company receives payments from its Customers based on billing schedules established in each contract, which vary across the Company’s locations, but generally range between 30 to 120 days. Occasionally, the Company offers extended payment terms or payment term discounts to certain Customers. Amounts are recorded as accounts receivable when the Company's right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation is that the Customer will pay for the product or services within one year or less of receiving those products or services.

5. LEASES

The Company evaluates all of its contracts to determine whether it is or contains a lease at inception. The Company reviews its contracts for options to extend, terminate or purchase any right of use assets and accounts for these, as applicable, at inception of the contract. Upon adoption of ASC 842, the Company elected the transition package of three practical expedients permitted within the standard. In accordance with the package of practical expedients, the Company did not reassess initial direct costs, lease classification or whether its contracts contain or are leases. The Company made an accounting policy election not to recognize right of use assets and liabilities for leases with a term of 12 months or less, or those that do not meet the Company’s capitalization threshold, unless the leases include options to renew or purchase the underlying asset that are reasonably certain to be exercised. Lease costs associated with those leases are recognized as incurred. The Company has also chosen the practical expedient that allows it to combine lease and non-lease components as a single lease component.

Lease renewal options are not recognized as part of the lease liability until the Company determines it is reasonably certain it will exercise any applicable renewal options. The Company has determined it is not reasonably certain it will exercise any applicable renewal options. The Company has not recorded any liability for renewal options in these Interim Financial Statements. The useful lives of leased assets as well as leasehold improvements, if any, are limited by the expected lease term.

Operating Leases

The Company’s operating lease activities primarily consist of leases for office space in the U.S., the U.K., Ireland, Portugal and Germany. Most of these leases include options to renew, with renewal terms generally ranging from one to eight years. The exercise of lease renewal options is at the Company’s sole discretion. Certain of the Company’s operating lease agreements include variable lease costs that are based on common area maintenance and property taxes. The Company expenses these payments as incurred. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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Supplemental balance sheet information as of June 30, 2023 and December 31, 2022 for the Company’s operating leases is as follows:

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Right of use assets, net	$	1,277	$	1,395
Total lease assets	$	1,277	$	1,395
CURRENT LIABILITIES:
Accrued expenses	$	685	$	768
NON-CURRENT LIABILITIES:
Other non-current liabilities		2,029		2,267
Total lease liabilities	$	2,714	$	3,035

The Company’s operating lease cost for the three and six months ended June 30, 2023 was $256,000 and $405,000, respectively, and is included in general and administrative expenses in its condensed consolidated statement of operations. The Company’s operating lease cost for the three and six months ended June 30, 2022 was $134,000 and $272,000, respectively, and is included in general and administrative expenses in its condensed consolidated statement of operations.

As of June 30, 2023, a schedule of maturity of lease liabilities under all of the Company’s operating leases is as follows:

Years Ending December 31	(In thousands)
2023 (remaining)	$	354
2024		680
2025		474
2026		488
2027		503
Thereafter		1,052
Total		3,551
Less amount representing interest		(837)
Present value of minimum lease payments		2,714
Less current portion (as a portion of accrued expenses)		(685)
Non-current portion (as a portion of other non-current liabilities)	$	2,029

Cash paid for operating leases was $176,000 and $351,000 during the three and six months ended June 30, 2023, respectively. No right-of-use assets were obtained in connection with operating leases for the three and six months ended June 30, 2023. Cash paid for operating leases was $64,000 and $132,000 during the three and six months ended June 30, 2022, respectively. No right-of-use assets were obtained in connection with operating leases for the three and six months ended June 30, 2022.

As of June 30, 2023, the weighted average remaining lease terms of the Company’s operating leases was 6.0 years. The weighted average discount rate used to determine the lease liabilities was 9.5%.

Finance Leases

The Company’s finance lease activities primarily consist of leases for office equipment and automobiles. Property and equipment leases are capitalized at the lesser of fair market value or the present value of the minimum lease payments at the inception of the leases using the Company’s incremental borrowing rate. The Company’s finance lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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Supplemental balance sheet information as of June 30, 2023 and December 31, 2022 for the Company’s finance leases is as follows:

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Property and equipment, net	$	384	$	366
Total lease assets	$	384	$	366
CURRENT LIABILITIES:
Finance lease obligations	$	203	$	333
NON-CURRENT LIABILITIES:
Other non-current liabilities		180		131
Total lease liabilities	$	383	$	464

Depreciation expense associated with property and equipment under finance leases was approximately $71,000 and $65,000 for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense associated with property and equipment under finance leases was approximately $123,000 and $155,000 for the six months ended June 30, 2023 and 2022, respectively. Interest expense associated with finance leases was $11,000 and $10,000 for the three months ended June 30, 2023 and 2022, respectively. Interest expense associated with finance leases was $22,000 and $21,000 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, a schedule of maturity of lease liabilities under finance leases, together with the present value of minimum lease payments, is as follows:

Years Ending December 31	(In thousands)
2023 (remaining)	$	178
2024		177
2025		114
2026		15
Total		484
Less amount representing interest		(101)
Present value of minimum lease payments		383
Less current portion		(203)
Non-current portion	$	180

Cash paid for finance leases was $132,000 and $251,000 during the three and six months ended June 30, 2023, respectively. The Company acquired $80,000 and $170,000 of property and equipment in exchange for finance leases during the three and six months ended June 30, 2023, respectively. Cash paid for finance leases was $167,000 and $175,000 during the three and six months ended June 30, 2022, respectively. No property or equipment was obtained in exchange for finance leases during the three and six months ended June 30, 2022.

As of June 30, 2023, the weighted average remaining lease terms of the Company’s finance leases was 0.8 years. The weighted average discount rate used to determine the finance lease liabilities was 9.9%.

6. GOING CONCERN

The accompanying Interim Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Interim Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has incurred recurring losses, negative cash flow from operations and has accumulated a deficit of $412,779,000 from the Company’s inception through June 30, 2023. As of June 30, 2023, the Company had approximately $18,807,000 in cash and cash equivalents. The Company’s ability to achieve profitability and positive cash flow depends on its ability to increase revenue and contain its expenses.

Further, the Company must maintain compliance with the debt covenants of its Loan and Security Agreement dated December 31, 2019 with SLR Investment Corp (SLR) and certain other lenders (as amended, the 2019 Loan Agreement). (See Note 10) If the Company were unable to comply with the Revenue Covenant (as defined in Note 10) at any time over the course of the next year, the lenders have the right to accelerate the maturity of the loan which would raise substantial doubt about the Company’s ability to continue as a going concern without access to alternative debt and/or equity financing, over the course of the next twelve months.

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To meet the Company’s anticipated future working capital needs, in March and May 2023, the Company consummated equity financings and amended the 2019 Loan Agreement (See Note 10). The Company may in the future need to raise additional debt and/or equity financing. The source, timing, and availability of any future financing will depend upon market conditions and other factors that may be outside of the Company’s control. Funding may not be available when needed, at all, or on terms acceptable to the Company. Because of these factors and the requirement to satisfy the Revenue Covenant and the Company’s history of recurring losses and negative cash flow from operations, there may be doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued. However, the Company believes the current cash reserves and expected revenue from operations are sufficient to fund its operation for at least the next 12 months.

7. INVENTORY

Inventory consisted of the following:

	June 30,		December 31,
	2023		2022
	(In thousands)
Component parts (1)	$	505	$	152
Work-in-process (2)		73		560
Finished goods		477		893
Total Inventory	$	1,055	$	1,605

(1)    Component parts inventory consists of manufactured components of the ILUVIEN applicator.

(2)    Work-in-process consists of completed units of ILUVIEN that are undergoing, but have not completed, quality assurance testing as required by U.S. or EEA regulatory authorities.

8. INTANGIBLE ASSETS

ILUVIEN Intangible Asset

As a result of the U.S. Food and Drug Administration’s (FDA) approval of ILUVIEN in September 2014, the Company was required to pay in October 2014 a milestone payment of $25,000,000 (the EyePoint Milestone Payment) to EyePoint, formerly known as pSivida US, Inc. (see Note 9).

The gross carrying amount of the intangible asset is $25,000,000, which is being amortized over approximately 13 years from the payment date. The amortization expense related to the intangible asset was approximately $484,000 for the three months ended June 30, 2023 and 2022, respectively. The amortization expense related to the intangible asset was approximately $962,000 for both the six months ended June 30, 2023 and 2022. The net book value of the intangible asset was $7,995,000 and $8,957,000 as of June 30, 2023 and December 31, 2022, respectively.

The estimated remaining amortization as of June 30, 2023 is as follows (in thousands):

Years Ending December 31	(In thousands)
2023 (remaining)	$	978
2024		1,946
2025		1,940
2026		1,940
2027		1,191
Total	$	7,995

YUTIQ Intangible Asset

On May 17, 2023 the Company was granted an exclusive and sublicensable right and license, pursuant to the Product Rights Agreement to commercialize YUTIQ for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, excluding any rights for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint and Ocumension Therapeutics. As a result, the Company paid EyePoint Parent an upfront payment of $75,000,000 and will make four quarterly additional guaranteed payments to EyePoint Parent totaling $7,500,000 in 2024 as well as royalties in 2025 through 2028 (see Note 17).

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The gross carrying amount of the intangible asset is $98,122,000, which is being amortized over approximately 10 years from the initial payment date. The amortization expense related to the intangible asset was approximately $1,182,000 for the three and six months ended June 30, 2023. The net book value of the intangible asset was $96,940,000 as of June 30, 2023.

The estimated remaining amortization as of June 30, 2023 is as follows (in thousands):

Years Ending December 31	(In thousands)
2023 (remaining)	$	4,942
2024		9,831
2025		9,804
2026		9,804
2027		9,804
Thereafter		52,755
Total	$	96,940

9. LICENSE AGREEMENTS

EyePoint License Agreement

In February 2005, the Company entered into an agreement with EyePoint (formerly known as pSivida US, Inc.) for the use of fluocinolone acetonide (FAc) in EyePoint’s proprietary insert technology. This agreement was subsequently amended a number of times (as amended, the EyePoint Agreement). The EyePoint Agreement provides the Company with a worldwide exclusive license to utilize certain underlying technology used in the development and commercialization of ILUVIEN.

In July 2017, the Company amended and restated its EyePoint license agreement, which was made effective July 1, 2017 (the New Collaboration Agreement). Under the New Collaboration Agreement, the Company has the right to the technology underlying ILUVIEN for the treatment of (a) human eye diseases, including uveitis, in Europe, the Middle East, and Africa, and (b) human eye diseases other than uveitis worldwide. The New Collaboration Agreement converted the Company’s previous profit share obligation to a royalty payable on global net revenues of ILUVIEN.

Following the signing of the New Collaboration Agreement, the Company retained a right to recover up to $15,000,000 of commercialization costs that were incurred prior to profitability of ILUVIEN and to offset a portion of future payments owed to EyePoint with these accumulated commercialization costs, referred to as the Future Offset. Due to the uncertainty of future net profits, the Company has fully reserved the Future Offset in the accompanying Interim Financial Statements. In March 2019, pursuant to the New Collaboration Agreement, the Company forgave $5,000,000 of the Future Offset in connection with the approval of ILUVIEN for NIU-PS in the U.K. As of June 30, 2023, the balance of the Future Offset was approximately $6,762,000, which is fully reserved.

During the three and six months ended June 30, 2023 and 2022, the Company’s net royalty expense payable to EyePoint was 5.2%, which was reduced from 6% due to the recoverable balance of the Future Offset. The Company will be required to pay an additional 2% royalty on future global net revenues and other related consideration in excess of $75,000,000 in any year. During the three and six months ended June 30, 2023, the Company recognized approximately $463,000 and $857,000, respectively, of royalty expense, which is included in cost of goods sold, excluding depreciation and amortization. As of June 30, 2023, approximately $857,000 of this royalty expense was included in the Company’s accounts payable. During the three and six months ended June 30, 2022, the Company recognized approximately $758,000 and $1,375,000, respectively, of royalty expense which is included in cost of goods sold, excluding depreciation and amortization.

Ocumension License Agreement

On April 14, 2021, the Company entered into an exclusive license agreement (the License Agreement) with Ocumension (Hong Kong) Limited (Ocumension HK), a wholly owned subsidiary of Ocumension Therapeutics, for the development and commercialization under Ocumension HK’s own brand name(s), either directly or through its affiliates or approved third-party sublicensees, of the Company’s 0.19 mg fluocinolone acetonide intravitreal implant in applicator (the Product; currently marketed in the United States, Europe, and the Middle East as ILUVIEN®) for the treatment and prevention of eye diseases in humans, other than uveitis, in a specified territory. The Territory is defined as the People’s Republic of China, including Hong Kong SAR and Macau SAR, region of Taiwan, South Korea, Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

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The Company received a nonrefundable upfront payment of $10,000,000 from Ocumension HK and may in the future receive additional sales-based milestone payments totaling up to $89,000,000 upon the achievement by Ocumension HK of certain specified sales milestones during the term of the License Agreement. The Company’s receipt of future milestone payments depends upon whether Ocumension HK is able to successfully complete product development and commercialization in the Territory, which requires, among other things, obtaining necessary regulatory approvals and appropriate reimbursement pricing in the various countries and jurisdictions in the Territory, a process that may take several years. In 2021 the Company recognized $11,048,000 in license revenue from the Ocumension transaction (including the value of a warrant subscription agreement, which Alimera received as consideration, for Alimera to purchase 1,000,000 shares of Ocumension Therapeutics during a period of four years), in accordance with ASC 606, Revenue from Contracts with Customers, with the remaining approximate $300,000 in consideration classified as deferred revenue that will be recognized over the remaining term of the license agreement once Ocumension begins to sell products.

The term of the License will continue (a) until the 10th anniversary of the latest first commercial sale of the Product in any country or jurisdiction in the Territory or (b) for as long as Ocumension HK is commercializing the Product in any part of the Territory, whichever is later. The term is subject to the Company’s right to partially terminate the Agreement beginning on the 10th anniversary of the effective date with respect to any country or jurisdiction in the Territory in which Ocumension has not achieved at the time of termination first commercial sale and is not continuing to commercialize the Product. Ocumension will purchase Product from the Company at a fixed transfer price without royalty obligation on future sale (other than milestone payments as described above). Ocumension HK is responsible for all costs of development and commercialization in the Territory.

When the Company entered into the license agreement, it also entered into a share purchase agreement and a warrant subscription agreement, which are discussed in Note 16.

10. LOAN AGREEMENTS

Loan Agreements with SLR Investment Corp.

On January 5, 2018, the Company entered into a $40,000,000 loan and security agreement with Solar Capital Ltd., as Collateral Agent, and the parties signatory thereto from time to time as Lenders, including Solar Capital Ltd. in its capacity as a Lender (the 2018 Loan Agreement). On December 31, 2019, the Company refinanced the 2018 Loan Agreement by entering into a $45,000,000 loan and security agreement (the 2019 Loan Agreement) with SLR Investment Corp. (SLR, f/k/a Solar Capital Ltd.), as Agent, and the parties signing the Loan Agreement from time to time as Lenders, including SLR in its capacity as a Lender (collectively, the Lenders). The Company amended the 2019 Loan Agreement on March 24, 2023 (the Fifth Amendment) and entered into a related exit fee agreement with the Lenders. (See Note 21) Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) an additional tranche of $2,500,000 to increase the Company’s existing term loan facility to $47,500,000, subject to certain closing conditions, and (ii) extend a $15,000,000 additional term loan available to be funded at the Lender’s sole discretion.

Interest on the 2019 Loan Agreement prior to the Fifth Amendment was payable at an annual rate the greater of (i) one-month LIBOR or (ii) 1.78%, plus 7.65% per annum. Interest on the 2019 Loan Agreement following the Fifth Amendment is payable at an annual rate equal to 5.15% plus the greater of (i) 4.60% and (ii) one-month SOFR, which will reset monthly. As of March 31, 2023, the interest rate on the 2019 Loan Agreement was approximately 9.75%. The 2019 Loan Agreement provides for interest only payments until April 30, 2025, which may be extended an additional 12 months if the Company meets certain financial targets by March 31, 2025, followed by monthly payments of principal and interest through the loan maturity date of April 30, 2028.

2018 Exit Fee Agreement

Notwithstanding the repayment of the outstanding loan under the 2018 Loan Agreement, the Company remains obligated to pay additional fees under the Exit Fee Agreement (2018 Exit Fee Agreement) dated as of January 5, 2018 by and among the Company, SLR, as Agent, and the Lenders. The 2018 Exit Fee Agreement survived the termination of the 2018 Loan Agreement upon the repayment of the outstanding loan under the 2018 Loan Agreement and has a term of 10 years. The Company is obligated to pay up to, but no more than, $2,000,000 in fees under the 2018 Exit Fee Agreement.

Specifically, the Company is obligated to pay an exit fee of $2,000,000 on a “change in control” (as defined in the 2018 Exit Fee Agreement). To the extent that the Company has not already paid the $2,000,000 fee, the Company is also obligated to pay a fee of $1,000,000 on achieving each of the following milestones:

first, if the Company achieves revenues of $80,000,000 or more from the sale of its ILUVIEN product in the ordinary course of business to third party customers, measured on a trailing 12-month basis during the term of the agreement, tested at the end of each month; and

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second, if the Company achieves revenues of $100,000,000 or more from the sale of its ILUVIEN product in the ordinary course of business to third party customers, measured in the same manner.

2019 Exit Fee Agreement

The Company is also obligated to pay additional fees under the Exit Fee Agreement dated as of December 31, 2019 by and among the Company, SLR as Agent, and the Lenders (2019 Exit Fee Agreement). The 2019 Exit Fee Agreement will survive the termination of the 2019 Loan Agreement and has a term of 10 years. The Company will be obligated to pay a $675,000 exit fee upon the occurrence of an exit event, which generally means a change in control, as defined in the 2019 Exit Fee Agreement.

2023 Exit Fee Agreement

On March 24, 2023, the Company entered into the Fifth Amendment Exit Fee Agreement (the New Exit Fee Agreement), which will survive the termination of the Amended Loan Agreement and has a term of 10 years. The Company will be obligated to pay an exit fee of 1.5% of the original principal amount funded under the Amended Loan Agreement upon the occurrence of an exit event, which generally means a change in control, as defined in the New Exit Fee Agreement. If the Company has not already paid the exit fee under the New Exit Fee Agreement, the Company is also obligated to pay an equivalent fee upon achieving revenues of $82,500,000 or more from the sale of ILUVIEN in the ordinary course of business to third party customers, measured on a trailing 12-month basis during the term of the New Exit Fee Agreement, tested at the end of each month. The Company’s existing 2015 and 2019 Exit Fee Agreements remain in effect. The fees payable pursuant to the Company’s existing exit fee agreements and the New Exit Fee Agreement, as amended by the Omnibus Amendment to Exit Fee Agreements dated as of May 17, 2023, will not exceed $3,387,500 in total.

Third Amendment to 2019 Loan Agreement

On February 22, 2022, the Company entered into a Third Amendment to the 2019 Loan Agreement (the Third Amendment), which, among other things:

(a)specified the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2022, that the Company must achieve for each such period (the Third Amendment Revenue Covenant);

(b)consented to the Company maintaining a lower minimum revenue amount under the Third Amendment Revenue Covenant for the trailing six-month period ended December 31, 2021 than previously required under the Loan Agreement (and waived any event of default that may have occurred or may be deemed to have occurred as a result of the Company’s lower revenue amount for that period); and 

(c)required that the Third Amendment Revenue Covenant be tested at March 31, 2023 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of the Company’s projected revenues in accordance with an annual plan submitted by the Company to the Collateral Agent by January 15 of such year, such plan to be thereafter approved by the Company’s board of directors and the Collateral Agent in its sole discretion no later than February 28 of such year.

Fourth Amendment to 2019 Loan Agreement

On December 7, 2022, the Company entered into a Fourth Amendment to the 2019 Loan Agreement (the Fourth Amendment), which, among other things:

(a)extends the amortization date from January 1, 2023 to April 1, 2023, provided that such date may be further extended to July 1, 2023 upon the Company’s request and in consultation with the Lenders, in each of the Lenders’ sole discretion;

(b)specifies the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023, that the Company must achieve for each such period (the Fourth Amendment Revenue Covenant); and

(c)requires that the Fourth Amendment Revenue Covenant be tested at March 31, 2023 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of Alimera’s projected revenues in accordance with an annual plan submitted by the Company to the Collateral Agent by January 15th of such year, such plan to be thereafter approved by Alimera’s board of directors and the Collateral Agent in its sole discretion no later than February 28 of such year.

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Fifth Amendment to 2019 Loan Agreement

On March 24, 2023, the Company entered into a Fifth Amendment to the 2019 Loan Agreement (the Fifth Amendment), under which the Lenders agreed to, among other things:

(a)an additional tranche of $2,500,000 to increase the Company’s existing term loan facility to $47,500,000, subject to certain closing conditions (the New Term Loan);

(b)extend a $15,000,000 additional term loan available to be funded at the Lender’s sole discretion;

(c)annual interest rate equal to 5.15% plus the greater of (i) 4.60%, and (ii) one-month SOFR, which will reset monthly, on the New Term Loan;

(d)extend the maturity date to April 30, 2028 and the interest-only period to April 30, 2025, which may be extended an additional 12 months if the Company meets certain financial targets by March 31, 2025; and

(e)specify the minimum revenue amount, calculated on a trailing six month basis beginning with the six month period ended March 31, 2023, and tested at the end of each calendar quarter, that the Company must achieve for each such period.

Sixth Amendment to 2019 Loan Agreement

On May 17, 2023, the Company entered into a Sixth Amendment to the 2019 Loan Agreement (the Sixth Amendment and the 2019 Loan Agreement as so amended, the Amended Loan Agreement), under which the Lenders agreed to, among other things:

(a)increase the amount available for an additional term loan under the facility from $15,000,000 to $20,000,000;

(b)fund the full amount of the additional term loan on May 17, 2023; and

(c)specify the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023 and 2024, that the Company must achieve for each such period (the Revenue Covenant).

The Company complied with the Revenue Covenant on June 30, 2023, expects to comply with the Revenue Covenant at the next reportable date, which is September 30, 2023, and the remainder of the Revenue Covenants through one year after these financial statements are issued.

Modification of Debt

In accordance with the guidance in ASC 470-50, Debt, the Company entered into and accounted for the Third Amendment, Fourth Amendment, and Fifth Amendment as modifications and expensed, as they were incurred, legal costs associated with third parties as costs of the modifications. The Company capitalized $113,000 of costs in connection with the Fourth Amendment. The Company did not capitalize any costs associated with the Third Amendment. The Company capitalized $2,625,000 of costs in connection with the Fifth Amendment.

Extinguishment of Debt

In accordance with the guidance in ASC 470-50, Debt, the Company entered into and accounted for the Sixth Amendment as an extinguishment of debt. The Company recognized a loss on extinguishment of $1,079,000 in connection with the Sixth Amendment.

Fair Value of Debt

The weighted average interest rates of the Company’s notes payable approximate the rate at which the Company could obtain alternative financing. Therefore, the carrying amount of the notes approximated their fair value at June 30, 2023 and December 31, 2022.

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11. LOSS PER SHARE (EPS)

The Company follows ASC 260, Earnings Per Share (ASC 260), which requires the reporting of both basic and diluted earnings per share. Because the Company’s preferred stockholders participate in dividends equally with common stockholders (if the Company were to declare and pay dividends), the Company uses the two-class method to calculate EPS. However, the Company’s preferred stockholders are not contractually obligated to share in losses. On August 1, 2023, the Company’s stockholders approved the issuance of shares of common stock upon conversion of the Series B Preferred and the issuance of shares of common stock upon exercise of certain warrants. The Company set August 15, 2023 as the date for the Mandatory Conversion (as defined in Note 19).

Basic EPS is computed by dividing net income or loss available to stockholders by the weighted average number of shares outstanding for the period. Diluted EPS is calculated in accordance with ASC 260 by adjusting weighted average shares outstanding for the dilutive effect of common stock options and warrants the Company has issued. In periods where a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be anti-dilutive.

Common stock equivalent securities that would potentially dilute basic EPS in the future, but were not included in the computation of diluted EPS because they were either not classified as participating or would have been anti-dilutive, were as follows:

	June 30,
	2023		2022
Series A convertible preferred stock		—		601,504
Series B convertible preferred stock		45,272,874		—
Common stock warrants		1,600,000		—
Stock options		1,217,045		1,310,465
Total		48,089,919		1,911,969

12. PREFERRED STOCK

Securities Purchase Agreement

On March 24, 2023, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with certain investors (the Original Investors) for the sale of up to 27,000 shares of the Company’s newly designated Series B Convertible Preferred Stock, par value $0.01 per share (the Series B Preferred Stock) and warrants (the Warrants) to purchase up to 5,714,286 shares of the Company’s common stock, for an aggregate purchase price of $12,000,000. On March 24, 2023 (the Tranche 1 Closing Date), the Company issued and sold an aggregate of 12,000 shares of Series B Preferred Stock at a per-share purchase price of $1,000 (the Stated Value) and the Warrants for aggregate gross proceeds of $12,000,000 (the Tranche 1 Closing). The proceeds from the Tranche 1 Closing were used to fund development and commercialization of the Company’s existing and potential future pipeline drugs, maintenance of the Company’s credit facility and corporate purposes substantially related to the commercialization of the Company’s existing and pipeline drugs, as well as the Repurchase (as defined below).

The initial conversion price of the shares of Series B Preferred Stock issued at the Tranche 1 Closing is $2.10 (the Tranche 1 Conversion Price). The conversion price of the Series B Preferred Stock is subject to certain customary adjustments, including a weighted average anti-dilution adjustment.

Unless and until stockholder approval to issue the common stock underlying the Series B Preferred Stock is obtained (Stockholder Approval), the Series B Preferred Stock will not be convertible into common stock to the extent that such conversion would cause (i) the aggregate number of shares of common stock that would be issued pursuant to the Purchase Agreement and the transactions contemplated thereby to exceed 1,401,901 (19.99% of the voting power or number of shares of common stock, issued and outstanding immediately prior to the execution of the Purchase Agreement), which number will be reduced, on a share-for-share basis, by the number of shares of common stock issued or issuable pursuant to any transactions that may be aggregated with the transactions contemplated by the Purchase Agreement under applicable Nasdaq rules (the Exchange Cap); or (ii) the aggregate number of shares of common stock that would be issued pursuant to such conversion, when aggregated with any shares of common stock then beneficially owned by the holder (or group of holders required to be aggregated) of such shares, would result in (a) a “change of control” under applicable Nasdaq listing rules (the Change of Control Cap) or (b) such holder or a “person” or “group” to beneficially own in excess of 9.99% of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the Ownership Limitation).

20

The Series B Preferred Stock will be entitled to receive dividends and other distributions pro rata with the common stock. In addition, prior to conversion, dividends will accrue on the Series B Preferred Stock at an annual rate of 6% of the Stated Value, accruing daily. The Series B Preferred Stock is not redeemable.

The Warrants have an exercise price equal to the Tranche 1 Conversion Price (as adjusted pursuant to the Certificate of Designation of the Series B Preferred Stock through the date of Stockholder Approval) and expire seven years from the date of the Tranche 1 Closing. The Warrants are exercisable upon the earlier of (a) a change of control and (b) March 24, 2024; provided that prior to Stockholder Approval, exercise of the Warrants is subject to the Ownership Limitation, the Change of Control Cap and the Exchange Cap.

Joinder and Amendment to Securities Purchase Agreement

On May 17, 2023, Alimera entered into a joinder and amendment (the Purchase Agreement Amendment) to the Purchase Agreement. The Purchase Agreement Amendment added certain investors as parties to the Purchase Agreement with respect to the Tranche 2 Closing (as defined below) and amended certain provisions of the Purchase Agreement. Pursuant to the amended Purchase Agreement, on May 17, 2023, the Company issued 66,617 shares of Series B Preferred at the Stated Value and 1,401,901 shares of common stock, for aggregate gross proceeds of $69.0 million (the Tranche 2 Closing). The initial conversion price of the shares of Series B Preferred issued at the Tranche 2 Closing was $1.70. Further, pursuant to the terms of the Purchase Agreement Amendment, the Company and the Original Investors agreed to reduce the number of shares of common stock issuable upon exercise of the Warrants to 1,600,000. The proceeds from the Tranche 2 Closing were utilized by Alimera to fund a portion of the upfront cash payment due upon execution of the Product Rights Agreement.

At June 30, 2023, the Series B Preferred Stock had $683,000 of cumulative dividends in arrears ($5.00 per share). On August 1, 2023, the Company received Stockholder Approval (see Note 19).

Series A Convertible Preferred Stock

In October 2012, the Company closed its preferred stock financing in which it sold units consisting of 1,000,000 shares of Series A Convertible Preferred Stock (Series A Preferred Stock) and warrants (which expired on October 1, 2017) to purchase 300,000 shares of Series A Preferred Stock for gross proceeds of $40,000,000, prior to the payment of approximately $560,000 of related issuance costs. The powers, preferences and rights of the Series A Preferred Stock are set forth in the certificate of designation for the Series A Preferred Stock filed by the Company with the Delaware Secretary of State as part of the Company’s certificate of incorporation. As of December 31, 2022, there were 600,000 shares of Series A Convertible Preferred Stock issued and outstanding.

As a condition to entering into the Purchase Agreement, the Company repurchased 200,919 shares of common stock and 600,000 shares of its Series A Preferred Stock held by the holders thereof (the Repurchase), for an aggregate purchase price of approximately $1,252,000. The holders of the Series A Preferred Stock were entitled to a liquidation preference before the holders of common stock would be entitled to receive any consideration in the event of the Company’s liquidation. As of December 31, 2022, the Series A Preferred Stock aggregate liquidation preference was $24,000,000. As a result of the Repurchase, no shares of the Series A Preferred Stock remain outstanding and the liquidation preference is no longer in effect. Following the Repurchase, the Company filed a certificate of elimination of the Series A Preferred Stock with the Secretary of State of the State of Delaware.

13. EQUITY INCENTIVE PLANS

Under the Company’s 2019 Omnibus Incentive Plan (the 2019 Plan), the Compensation Committee of the Board is authorized to grant equity-based incentive awards that include stock options, restricted stock units and shares of restricted stock to officers, directors, employees and contractors. Equity-based awards are also outstanding under the Company’s 2010 Equity Incentive Plan, although no new awards can be granted under that plan. The Company also has an employee stock purchase plan.

‎

21

Stock Options

During the three months ended June 30, 2023 and 2022, the Company recorded compensation expense related to stock options of approximately $148,000 and $218,000, respectively. During the six months ended June 30, 2023 and 2022, the Company recorded compensation expense related to stock options of approximately $315,000 and $476,000, respectively. As of June 30, 2023, the total unrecognized compensation cost related to non-vested stock options granted was $895,000 and is expected to be recognized over a weighted average period of 2.3 years. The following table presents a summary of stock option activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,216,953	18.03		1,315,161	19.39
Grants		17,321	2.55		1,700	4.34
Forfeitures and expirations		(17,229)	45.18		(6,396)	15.58
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.77		$	2.94

The following table presents a summary of stock option activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,175,339	19.03		1,075,795	23.35
Grants		117,723	2.70		285,250	4.96
Forfeitures and expirations		(76,017)	19.41		(50,580)	21.51
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.86		$	3.32

The following table provides additional information related to outstanding stock options as of June 30, 2023:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,217,045		17.43		5.57 years		24
Exercisable		893,401		22.07		4.50 years		7
Outstanding, vested and expected to vest		1,182,115		17.81		5.48 years		22

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The following table provides additional information related to outstanding stock options as of December 31, 2022:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,175,339		19.03		5.68 years		—
Exercisable		878,115		23.62		4.72 years		—
Outstanding, vested and expected to vest		1,139,482		19.46		5.58 years		—

As of June 30, 2023, 52,283 shares remain available for grant under the 2019 Plan. On August 1, 2023, the Company’s stockholders approved the Alimera Sciences, Inc. 2023 Equity Incentive Plan (Note 19).

Restricted Stock and Restricted Stock Units (RSUs)

The following table presents a summary of restricted stock and RSU activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		685,176		1.67		94,063		5.29
Grants		—		—		—		—
Vested restricted stock and RSUs		—		—		(7,500)		8.93
Forfeitures		(3,000)		1.35		—		—
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

The following table presents a summary of restricted stock and RSU activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		73,594		4.98		46,250		5.65
Grants		632,050		1.39		57,500		4.96
Vested restricted stock and RSUs		(20,468)		4.98		(9,687)		5.01
Forfeitures		(3,000)		1.35		(7,500)		8.93
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

Employee stock-based compensation expense related to restricted stock and RSUs recognized in accordance with ASC 718, Compensation - Stock Compensation (ASC 718) was $62,000 and $43,000 for the three months ended June 30, 2023 and 2022, respectively. Employee stock-based compensation expense related to restricted stock and RSUs recognized in accordance with ASC 718, Compensation - Stock Compensation (ASC 718) was $109,000 and $89,000 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the total unrecognized compensation cost related to restricted stock and RSUs was $1,120,000 and is expected to be recognized over a weighted average period of 3.62 years.

23

Employee Stock Purchase Plan

During each of the three months ended June 30, 2023 and 2022, the Company recorded compensation expense related to its employee stock purchase plan of approximately $7,000. During the six months ended June 30, 2023 and 2022, the Company recorded compensation expense related to its employee stock purchase plan of approximately $18,000, and $15,000, respectively. 

14. INCOME TAXES

In accordance with ASC 740, Income Taxes, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities at the enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a valuation allowance against its net deferred tax asset to reduce the net carrying value to an amount that is more likely than not to be realized. At the end of each interim period, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year. This estimate reflects, among other items, the Company’s best estimate of operating results and foreign currency exchange rates.

The Company also applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions. The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world.

For the six months ended June 30, 2023, the Company has not recorded income tax expense or benefit. No tax benefit is expected to be realized for the losses in the United States and the United Kingdom due to the ongoing losses and valuation allowances in these jurisdictions. Tax expense or benefit for income and losses in other jurisdictions (Ireland, Germany, and Portugal) are immaterial for the period.

At December 31, 2022, the Company had U.S. federal NOL carry-forwards of approximately $147,200,000 and state NOL carry-forwards of approximately $107,700,000 available to reduce future taxable income, subject to limitation based upon the results of the Company’s analyses under Internal Revenue Code Sections 382 and 383. The Company’s U.S. federal NOL carry-forwards remain fully reserved as of June 30, 2023. If not utilized, the federal NOL carry-forwards will expire at various dates between 2029 and 2037, the Company’s federal NOL created in 2018 and onward will carry forward indefinitely and the state NOL carry-forwards will expire at various dates between 2023 and 2042.

NOL carry-forwards may be subject to annual limitations under Internal Revenue Code Sections 382 and 383 in the event that certain changes in ownership of the Company were to occur. The Company has not yet completed a formal evaluation of the impact of the issuance of the Company’s Series B Preferred Stock in March and May of 2023 on the Company’s NOL carry-forwards and whether certain changes in ownership have occurred that would limit the Company’s ability to utilize a portion of its NOL carry-forwards.

As of December 31, 2022, the Company’s U.K. subsidiary is in a net deferred tax asset position primarily due to the step up in tax basis for intangible assets created by the transfer of intellectual property from the Netherlands to the U.K. Based upon the expected pattern of reversal of deferred taxes, it is not more likely than not that these deferred tax assets will be realized. As such, a full valuation allowance is placed against the net deferred tax assets of the U.K. subsidiary. The Company’s Irish subsidiary has a deferred tax asset for net operating loss carryforwards. The Company expects this net operating loss carryforward to be fully realizable in the future based upon the Company’s control of the transfer pricing arrangements. A valuation allowance is not recorded on the deferred tax assets of the Ireland subsidiary. Deferred tax considerations for all other foreign entities are immaterial to the financial statements.

Effective January 1, 2022, for U.S. tax purposes research and development costs, including software development costs, are required to be capitalized and will be deductible over five years for costs incurred domestically and over fifteen years for costs incurred in a foreign country. Additionally, the first year of amortization requires that amortization begin with the midpoint of the taxable year. As of December 31, 2022, the Company recorded a deferred tax asset of approximately $969,000 related to capitalized research and development costs. This deferred tax asset is fully reserved with a valuation allowance.

On August 16, 2022, the President of the United States signed the Inflation Reduction Act (IRA) into law. The IRA enacted a 15% corporate minimum tax effective in 2024, a 1% tax on share repurchases after December 31, 2022, and created and extended certain tax-related energy incentives. The Company does not currently expect the tax-related provisions of the IRA to have a material effect on its financial results.

24

The Company anticipates that its foreign subsidiaries will be profitable and have earnings in the future. Once the foreign subsidiaries have earnings, the Company intends to indefinitely reinvest in its foreign subsidiaries all undistributed earnings and original investments in such subsidiaries. As a result, the Company does not expect to record deferred tax liabilities in the future related to excesses of book over tax basis in the stock of its foreign subsidiaries in accordance with ASC 740-30-25.

Tax years from 2018 to 2020 remain subject to examination in California, Georgia, Kentucky, Tennessee, Texas and on the federal level, with the exception of the assessment of NOL carry-forwards available for utilization, which can be examined for all years since 2009. The statute of limitations on these years will close when the NOLs expire or when the statute closes on the years in which the NOLs are utilized.

15. SEGMENT INFORMATION

During the three months ended June 30, 2023 and 2022, two customers within the U.S. segment that are large pharmaceutical distributors accounted for 68% and 61% of the Company’s consolidated product revenues, respectively. During the six months ended June 30, 2023 and 2022, two customers within the U.S. segment that are large pharmaceutical distributors accounted for 63% and 60% of the Company’s consolidated product revenues, respectively. These same two customers within the U.S. segment accounted for approximately 71% of the Company’s consolidated accounts receivable at June 30, 2023 and at December 31, 2022

The Chief Executive Officer (CEO), who is the Company’s chief operating decision maker, has determined that the Company’s operations are managed as three operating segments: U.S., International and Operating Cost. The Company determined that each of these operating segments represented a reportable segment. In monitoring performance, aligning strategies and allocating resources, the chief operating decision maker manages and evaluates the Company’s U.S., International and Operating Cost segments based on segment income or loss from operations adjusted for certain non-cash items, such as stock-based compensation expense and depreciation and amortization. Therefore, the Company classifies within Other (a) the non-cash expenses included in research, development and medical affairs expenses; general and administrative expenses; and sales and marketing expenses; and (b) depreciation and amortization.

The Company’s U.S. and International segments represent the sales and marketing, general and administrative and research and development activities dedicated to the respective geographies. The Operating Cost segment primarily represents the general and administrative and research and development activities not specifically associated with the U.S. or International segments and includes expenses such as executive management; information technology administration and support; legal; compliance; clinical studies; and business development.

Each of the Company’s U.S., International and Operating Cost segments is separately managed and is evaluated primarily upon segment income or loss from operations. Other is presented to reconcile to the Company’s consolidated totals. The Company does not report balance sheet information by segment because the chief operating decision maker does not review that information. The Company allocates certain operating expenses among its reporting segments based on activity-based costing methods. These activity-based costing methods require the Company to make estimates that affect the amount of each expense category that is attributed to each segment. Changes in these estimates will directly affect the amount of expense allocated to each segment and therefore the operating profit of each reporting segment.

25

The following tables present a summary of the Company’s reporting segments for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	11,876	$	5,662	$	—	$	—	$	17,538
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,290)		(1,135)		—		—		(2,425)
GROSS PROFIT		10,586		4,527		—		—		15,113
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,748		842		1,033		25		3,648
GENERAL AND ADMINISTRATIVE EXPENSES		1,101		510		2,619		143		4,373
SALES AND MARKETING EXPENSES		4,781		1,379		225		49		6,434
DEPRECIATION AND AMORTIZATION		—		—		—		1,866		1,866
OPERATING EXPENSES		7,630		2,731		3,877		2,083		16,321
SEGMENT INCOME (LOSS) FROM OPERATIONS		2,956		1,796		(3,877)		(2,083)		(1,208)
OTHER INCOME AND EXPENSES, NET		—		—		—		(8,796)		(8,796)
NET LOSS BEFORE TAXES									$	(10,004)

	Three Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	8,943	$	5,661	$	—	$	—	$	14,604
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,060)		(1,106)		—		—		(2,166)
GROSS PROFIT		7,883		4,555		—		—		12,438
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,281		807		1,799		45		3,932
GENERAL AND ADMINISTRATIVE EXPENSES		195		468		2,112		170		2,945
SALES AND MARKETING EXPENSES		4,568		2,112		133		52		6,865
DEPRECIATION AND AMORTIZATION		—		—		—		670		670
OPERATING EXPENSES		6,044		3,387		4,044		937		14,412
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,839		1,168		(4,044)		(937)		(1,974)
OTHER INCOME AND EXPENSES, NET		—		—		—		(1,124)		(1,124)
NET LOSS BEFORE TAXES									$	(3,098)

26

The following tables present a summary of the Company’s reporting segments for the six months ended June 30, 2023 and 2022:

	Six Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	19,456	$	11,628	$	—	$	—	$	31,084
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(2,195)		(2,258)		—		—		(4,453)
GROSS PROFIT		17,261		9,370		—		—		26,631
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,910		1,589		3,266		47		7,812
GENERAL AND ADMINISTRATIVE EXPENSES		2,205		1,227		4,814		298		8,544
SALES AND MARKETING EXPENSES		9,056		2,794		291		97		12,238
DEPRECIATION AND AMORTIZATION		—		—		—		2,547		2,547
OPERATING EXPENSES		14,171		5,610		8,371		2,989		31,141
SEGMENT INCOME (LOSS) FROM OPERATIONS		3,090		3,760		(8,371)		(2,989)		(4,510)
OTHER INCOME AND EXPENSES, NET		—		—		—		(10,462)		(10,462)
NET LOSS BEFORE TAXES									$	(14,972)

	Six Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	15,863	$	10,639	$	—	$	—	$	26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,875)		(1,971)		—		—		(3,846)
GROSS PROFIT		13,988		8,668		—		—		22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,451		1,723		3,259		82		7,515
GENERAL AND ADMINISTRATIVE EXPENSES		511		892		4,393		389		6,185
SALES AND MARKETING EXPENSES		9,242		4,116		250		110		13,718
DEPRECIATION AND AMORTIZATION		—		—		—		1,359		1,359
OPERATING EXPENSES		12,204		6,731		7,902		1,940		28,777
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,784		1,937		(7,902)		(1,940)		(6,121)
OTHER INCOME AND EXPENSES, NET		—		—		—		(2,932)		(2,932)
NET INCOME BEFORE TAXES									$	(9,053)

16. OTHER AGREEMENTS WITH OCUMENSION

Share Purchase Agreement

On April 14, 2021, the Company entered into a Share Purchase Agreement with Ocumension Therapeutics, pursuant to which the Company offered and sold to Ocumension 1,144,945 shares of common stock (the Shares), at a purchase price of $8.734044 per Share. The number of Shares sold was equal to 19.9% of the number of shares of common stock outstanding immediately before the closing.

The aggregate gross proceeds from the sale of the Shares were $10,000,000. The Company has used the net proceeds from the sale of the Shares to continue to commercialize ILUVIEN® and for general corporate purposes, which may include working capital, capital expenditures, other clinical trial expenditures, acquisitions of new technologies, products or businesses in ophthalmology, and investments.

Ocumension is entitled to certain purchase rights if the Company elects to offer or sell new securities in either a private or public offering.

27

Warrant Subscription Agreement

On April 14, 2021, the Company entered into a warrant agreement with Ocumension Therapeutics pursuant to which Ocumension agreed to issue to the Company 1,000,000 non-transferable warrants granting the Company the right for a period of four years to subscribe to up to an aggregate of 1,000,000 shares of Ocumension stock at the subscription price of HK$23.88 per warrant share (or US$3.07 per warrant share as converted to U.S. Dollars at the exchange rate on April 9, 2021 of 0.12853 U.S. Dollars per HK$), subject to adjustment. (The converted rate is for illustrative purposes only; if the Company exercises the warrants, it will pay the subscription price of HK$23.88 per warrant share in HK$.) The warrants were issued on August 13, 2021, pursuant to the terms of the warrant agreement. The warrants are not and will not be listed on any stock exchange.

17. OTHER AGREEMENTS WITH EYEPOINT PARENT AND EYEPOINT

Product Rights Agreement

On May 17, 2023 the Company entered into the Product Rights Agreement with EyePoint Parent whereby the Company was granted an exclusive and sublicensable (in accordance with the terms of the Product Rights Agreement) right and license (the License) certain of EyePoint Parent’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa. The License also excludes any rights to YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint and Ocumension Therapeutics.

Additionally, pursuant to the Product Rights Agreement, EyePoint Parent will transfer and assign to the Company certain assets and certain contracts with third parties related to YUTIQ, including the new drug application #210331 for YUTIQ.

As a result, the Company paid EyePoint Parent an upfront payment of $75,000,000 and will make four quarterly guaranteed payments to EyePoint Parent totaling $7,500,000 in 2024. The Company will also pay royalties to EyePoint Parent from 2025 to 2028 at a percentage of mid-to-low double digits of the Company’s annual U.S. net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $70,000,000 in 2025, increasing annually thereafter. Upon the Company’s payment of the upfront payment and the guaranteed payments, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.

The Company also entered into a transition services agreement with EyePoint Parent under which EyePoint Parent has agreed to temporarily provide certain transition services to the Company on a cost-plus pricing arrangement following the closing date.

The total purchase consideration was $98,122,000, which has been recorded as an intangible asset, and includes the upfront payment of $75,000,000 as well as the guaranteed payments and estimated future royalties discounted to their fair value as of the transaction date of $7,085,000 and $15,765,000 respectively. The discounted fair values of the guaranteed payments and estimated future royalties were recorded as liabilities within the consolidated balance sheet on the transaction date as represented below.

	June 30, 2023
	(In thousands)
Assets:
Product rights intangible asset	$	98,122
Liabilities:
Accrued expenses		1,771
Accrued licensor payments		21,079

The Company concluded, based on the acquisition of a single asset due to substantially all of the value being concentrated in the Product Rights Agreement, lack of acquired employees and manufacturing, as well as absence of certain other inputs and acquired processes, that the transaction did not qualify as a business and therefore, recorded the acquisition of the License as an asset acquisition in accordance with ASC 805. Under ASC 805, the fair value cost of the net assets purchased is allocated, based on their relative fair value, to the acquired tangible assets and identified intangible assets and liabilities in accordance with U.S. GAAP.

The gross carrying amount of the intangible asset is $98,122,000, which is being amortized over approximately 10 years from the initial payment date (See Note 8). Acquisition costs associated with the acquisition of $272,000 were capitalized into the total purchase price of the transaction.

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Commercial Supply Agreement

In connection with the Product Rights Agreement, the Company entered into a commercial supply agreement (the Supply Agreement) with EyePoint Parent pursuant to which, during the term of the Product Rights Agreement, EyePoint Parent will be responsible for manufacturing and exclusively supplying (subject to certain exceptions) to the Company agreed-upon quantities of YUTIQ necessary for Alimera to commercialize YUTIQ in the United States at certain cost plus amounts, subject to adjustments set forth in the Supply Agreement.

EyePoint Parent’s manufacture and supply to Alimera of YUTIQ under the Supply Agreement will be exclusive (subject to certain exceptions set forth in the Supply Agreement) until Alimera has the right and ability to manufacture and supply YUTIQ for commercialization in the United States.

The Company may elect to manufacture YUTIQ after an initial 18-month term following the closing date upon the satisfaction of certain conditions.

18. FAIR VALUE

The Company applies ASC 820, Fair Value Measurements, in determining the fair value of certain assets and liabilities. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. The hierarchy of those valuation approaches is broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The following fair value table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

	June 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	93	$	—	$	93
Assets measured at fair value	$	—	$	93	$	—	$	93
Liabilities:
Common stock warrant liability (1)	$	—	$	3,471	$	—	$	3,471
Liabilities measured at fair value	$	—	$	3,471	$	—	$	3,471

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	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	183	$	—	$	183
Assets measured at fair value	$	—	$	183	$	—	$	183
Liabilities:
Common stock warrant liability (1)	$	—	$	—	$	—	$	—
Liabilities measured at fair value	$	—	$	—	$	—	$	—

(1) The Company uses the Black-Scholes pricing model and assumptions that consider, among other variables, the fair value of the underlying stock, risk-free interest rate, volatility, expected life and dividend rates in estimating fair value for the warrants considered to be derivative instruments. Changes in this value each reporting period are reported in the condensed consolidated statement of operations.

19. SUBSEQUENT EVENTS

Pre-Funded Warrants

On August 1, 2023, the Company amended the Certificate of Designation of Series B Convertible Preferred Stock. Prior to such amendment, the Certificate of Designation provided that the Series B Preferred would automatically convert at the then-applicable conversion price (Mandatory Conversion) in full into common stock following Stockholder Approval. As amended, the Certificate of Designation provides that the Company may issue pre-funded common stock warrants (Pre-Funded Warrants) to certain holders of Series B Preferred that elected to receive Pre-Funded Warrants prior to Stockholder Approval in lieu of a portion of common stock that would otherwise be issued in the Mandatory Conversion to such holders. The Pre-Funded Warrants have an exercise price of $0.01 per share. The Pre-Funded Warrants were offered to holders of Series B Preferred whose Mandatory Conversion of Series B Preferred would otherwise result in such holders, together with their affiliates and certain related parties, beneficially owning more than 9.99% of the outstanding common stock immediately following Mandatory Conversion the opportunity to purchase, if such holders so chose prior to Stockholder Approval, Pre-Funded Warrants, in lieu of shares of common stock that would otherwise result in such holder’s beneficial ownership exceeding 9.99% of the outstanding common stock.

Stockholder Approvals

On August 1, 2023, the Company’s stockholders provided Stockholder Approval, and the Company set August 15, 2023 as the date for the Mandatory Conversion. On August 1, 2023, the Company’s stockholders also approved the 2023 Equity Incentive Plan (the date of such approval, the Effective Date), which replaces the 2019 Plan. No new awards will be granted under the 2019 Plan. The 2023 Equity Incentive Plan has a share reserve equal to the sum of (a) 3,231,755 shares of common stock, (b) shares that are subject to awards granted under the 2019 Plan that are outstanding on or after the Effective Date and that are subsequently forfeited, cancelled, expire or lapse unexercised or unsettled or are reacquired by the Company, (c) the number of shares reserved under the 2019 Plan that are not issued or subject to outstanding awards under the 2019 Plan on the Effective Date, and (d) the increase in shares described in the next sentence. On the first anniversary of the Effective Date, the number of shares of common stock that may be issued under the 2023 Equity Incentive Plan will increase by a number of shares equal to 6% of the number of outstanding shares of common stock (assuming full conversion of the Series B Preferred into common stock).

‎

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes (Interim Financial Statements) that appear elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, including those described in Part I, Item 1A, “Risk Factors” and elsewhere in the 2022 Annual Report. For further information regarding forward-looking statements, please refer to the “Special Note Regarding Forward-Looking Statements and Projections” immediately after the index to this report above.

Overview

Alimera Sciences, Inc., and its subsidiaries (we, our or us), is a commercial-stage global pharmaceutical company developing and commercializing ILUVIEN (fluocinolone acetonide intravitreal implant) 0.19 mg, in the U.S. and abroad for the treatment of diabetic macular edema, a leading cause of blindness, and outside the U.S. for non-infectious uveitis affecting the posterior segment of the eye (NIU-PS). ILUVIEN is a state-of-the-art, sustained release intravitreal implant that enables patients to maintain vision longer, and importantly, with fewer injections. We commercialize ILUVIEN in the U.S., Europe, China and Middle East. Additionally, on May 17, 2023, we acquired from EyePoint Pharmaceuticals, Inc. (EyePoint Parent), the exclusive commercialization rights to YUTIQ® (fluocinolone acetonide intravitreal implant) 0.18 mg, for the treatment and prevention of NIU-PS worldwide except for Europe, the Middle East, and Africa.

In the U.S. and certain other countries outside Europe, ILUVIEN is indicated for the treatment of diabetic macular edema (DME) in patients who have been previously treated with a course of corticosteroids and did not have a clinically significant rise in intraocular pressure. In 17 countries in Europe, ILUVIEN is indicated for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies. In addition, ILUVIEN has received marketing authorization in 17 European countries and reimbursement in ten countries for the prevention of relapse in recurrent NIU-PS.

We market ILUVIEN directly in the U.S., Germany, the U.K., Portugal and Ireland. In addition, we have entered into various agreements under which distributors are providing or will provide regulatory, reimbursement and sales and marketing support for ILUVIEN in Austria, Belgium, the Czech Republic, Denmark, Finland, France, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Australia, New Zealand and several countries in the Middle East. In addition, we have granted an exclusive license to Ocumension Therapeutics for the development and commercialization of our 0.19mg fluocinolone acetonide intravitreal injection in China, East Asia and the Western Pacific. As of June 30, 2023 we have recognized sales of ILUVIEN to international distributors in the Middle East, China, Austria, Belgium, Czech Republic, France, Italy, Luxembourg, Spain, the Netherlands, and the Nordic Region.

In the U.S., YUTIQ is indicated for the treatment of chronic NIU-PS. Pursuant to our May 17, 2023 product rights agreement with EyePoint Parent (the Product Rights Agreement), we have the commercialization rights to YUTIQ in the entire world, except Europe, the Middle East and Africa as we had previously licensed from EyePoint Pharmaceuticals US, Inc. (EyePoint) rights to certain products, which included YUTIQ (known as ILUVIEN® in Europe, the Middle East and Africa) for the prevention of relapse in recurrent NIU-PS in those territories. The Product Rights Agreement also excludes any rights to YUTIQ for the treatment of chronic NIU-PS in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint Parent and Ocumension Therapeutics.

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Recent Developments

Pre-Funded Warrants

On August 1, 2023, we amended the Certificate of Designation of Series B Convertible Preferred Stock. Prior to such amendment, the Certificate of Designation provided that the Series B Preferred would automatically convert at the then-applicable conversion price (Mandatory Conversion) in full into common stock following Stockholder Approval (as defined below). As amended, the Certificate of Designation provides that we may issue pre-funded common stock warrants (Pre-Funded Warrants) to certain holders of Series B Preferred that elected to receive Pre-Funded Warrants prior to Stockholder Approval in lieu of a portion of common stock that would otherwise be issued in the Mandatory Conversion to such holders. The Pre-Funded Warrants have an exercise price of $0.01 per share. The Pre-Funded Warrants were offered to holders of Series B Preferred whose Mandatory Conversion of Series B Preferred would otherwise result in such holders, together with their affiliates and certain related parties, beneficially owning more than 9.99% of the outstanding common stock immediately following Mandatory Conversion the opportunity to purchase, if such holders so chose prior to Stockholder Approval, Pre-Funded Warrants, in lieu of shares of common stock that would otherwise result in such holder’s beneficial ownership exceeding 9.99% of the outstanding common stock.

Stockholder Approval

On August 1, 2023, our stockholders approved the issuance of shares of common stock upon conversion of the Series B Preferred and the issuance of shares of common stock upon exercise of certain warrants. We set August 15, 2023 as the date for the Mandatory Conversion.

Where We Market ILUVIEN to Treat Diabetic Macular Edema (DME)

ILUVIEN has received marketing authorization for the use of ILUVIEN to treat DME for the indications and is reimbursed and marketed as shown in the following table:

Indication for the Treatment of DME	Countries Where ILUVIEN Has Received Marketing Authorization to Treat DME		Countries Where ILUVIEN Has Received Reimbursement Approval to Treat DME	Countries Where ILUVIEN is Currently Available to Treat DME
Treatment of DME in patients who have been previously treated with a course of corticosteroids and did not have a clinically significant rise in intraocular pressure		U.S., Australia, Canada, Kuwait, Lebanon and the United Arab Emirates	U.S., Kuwait, Lebanon and the United Arab Emirates	U.S., Kuwait, Lebanon and the United Arab Emirates
Treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies		The United Kingdom (U.K.), Germany, France, Italy, Spain, Portugal, Ireland, Austria, Belgium, Denmark, Norway, Finland, Sweden, Poland, the Czech Republic, the Netherlands and Luxembourg	The U.K., Belgium, Germany, France, Italy, Spain, Portugal, Ireland, Luxembourg and the Netherlands	The U.K., Belgium, the Czech Republic, Germany, France, Italy, Spain, Portugal, Ireland, Austria, Luxembourg, Denmark, Norway, Finland, Sweden and the Netherlands

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Where We Market ILUVIEN to Treat Recurrent Non-Infectious Uveitis Affecting the Posterior Segment of the Eye (NIU-PS)

ILUVIEN has received marketing authorization for the use of ILUVIEN to treat NIU-PS for the indications and is reimbursed and marketed as shown in the following table:

Indication for the Treatment of NIU-PS	Countries Where ILUVIEN Has Received Marketing Authorization to Treat NIU-PS	Countries Where ILUVIEN Has Received Reimbursement Approval to Treat NIU-PS	Countries Where ILUVIEN is Currently Marketed to Treat NIU-PS
The prevention of relapse in recurrent NIU-PS	The U.K., Germany, France, Spain, Portugal, Ireland, Austria, Belgium, Denmark, Norway, Finland, Sweden, Poland, the Czech Republic, the Netherlands and Luxembourg	The U.K., Germany, Ireland (private sector), Italy, France, Portugal, Spain, the Czech Republic, Luxembourg and the Netherlands	The U.K., Germany, Ireland, Italy, France, Spain, the Czech Republic, Luxembourg, the Netherlands, Denmark, Norway, Portugal, Sweden, Finland, Austria and Belgium

Additionally, we market YUTIQ to treat chronic NIU-PS in the U.S.

Sources of Revenues

Our revenues for the three months ended June 30, 2023 and 2022 were generated from product sales primarily in the U.S., Germany and the U.K. In the U.S., two large pharmaceutical distributors accounted for 63% and 61% of our consolidated product revenues for the three months ended June 30, 2023 and 2022, respectively. These U.S.-based distributors purchase ILUVIEN, and YUTIQ in 2023 from us, maintain inventories of ILUVIEN and YUTIQ and sell on to physician offices, pharmacies and hospitals. Internationally, in countries where we sell direct, our customers are hospitals, clinics and pharmacies. We sometimes refer to physician offices, pharmacies, hospitals and clinics as end users. In international countries where we sell to distributors, these distributors purchase ILUVIEN from us and maintain inventories of ILUVIEN that they sell to their customers.

Transactions with Ocumension Therapeutics

On April 14, 2021, we entered into a transaction with Ocumension Therapeutics (Ocumension). In the Ocumension transaction, we received a total of $20.0 million in cash under two agreements:

•an Exclusive License Agreement (the Ocumension License Agreement) with a wholly owned subsidiary of Ocumension, pursuant to which we granted an exclusive license for the development and commercialization of our 0.19 mg fluocinolone acetonide intravitreal implant in applicator under Ocumension’s own branded label in China, East Asia, and the Western Pacific, in exchange for a nonrefundable upfront payment of $10.0 million and aggregated potential sales milestone payments of up to $89.0 million upon achievement by the Ocumension subsidiary of specified amounts of net sales of the licensed product in in the future. We recognized $11.0 million in license revenue from the Ocumension transaction (including the value of a warrant subscription agreement, which we received as consideration, to purchase 1,000,000 shares of Ocumension Therapeutics during a period of four years), in accordance with ASC 606, Revenue from Contracts with Customers, with the remaining approximate $300,000 in consideration received classified as deferred revenue that will be recognized over the remaining term of the license agreement once Ocumension begins to sell products. Revenue from the Ocumension License Agreement is included within net revenue in the accompanying Interim Financial Statements; and

•a Share Purchase Agreement with Ocumension, pursuant to which we offered and sold to Ocumension 1,144,945 shares of our common stock at a purchase price of $8.734044 per share, or $10.0 million in total.

For more information about the Ocumension transaction, see Notes 9 and 16 in the Interim Financial Statements.

Agreements with EyePoint Parent and EyePoint

In July 2017, we amended and restated our license agreement with EyePoint Pharmaceuticals US, Inc. (EyePoint) (the New Collaboration Agreement). Under the New Collaboration Agreement, we hold a worldwide license from EyePoint for the use of steroids, including FAc, in EyePoint’s proprietary insert technology for the treatment of all ocular diseases, other than uveitis, outside of Europe, the Middle East and Africa. The New Collaboration Agreement converted our previous profit share obligation to a royalty payable on global net

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revenues of ILUVIEN. The New Collaboration Agreement included a right to offset $15.0 million of future royalty payments (the Future Offset). As of June 30, 2023, the balance of the Future Offset was approximately $6.9 million, which is fully reserved. We will be able to recover the balance of the Future Offset as a reduction of future royalties that would otherwise be owed to EyePoint by reducing the royalty owed from 6% to 5.2% for net revenues and other related consideration up to $75.0 million annually and from 8% to 6.8% for net revenues and other related consideration in excess of $75.0 million on an annual basis.

On May 17, 2023 we entered into a product rights agreement (the Product Rights Agreement) with EyePoint Parent whereby we were granted an exclusive and sublicensable right and license under EyePoint Parent’s and its affiliates’ interest in certain of EyePoint Parent’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa. Pursuant to the agreement, we have paid to EyePoint Parent an upfront payment of $75 million and will also make four quarterly guaranteed payments to EyePoint Parent totaling $7.5 million during 2024 (“the payments”). We will also pay royalties to EyePoint Parent from 2025 to 2028 at a percentage of mid-to-low double digits of annual U.S. net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $70 million in 2025, increasing annually thereafter. Upon making the payments, the licenses and rights granted to Alimera will automatically become perpetual and irrevocable.

We also entered into a commercial supply agreement (the Supply Agreement) with EyePoint Parent pursuant to which, during the term of the Product Rights Agreement, EyePoint Parent will be responsible for manufacturing and exclusively supplying (subject to certain exceptions) to us agreed-upon quantities of YUTIQ necessary for us to commercialize YUTIQ in the United States at certain cost plus amounts, subject to adjustments. EyePoint Parent’s manufacture and supply to us of YUTIQ will be exclusive (subject to certain exceptions) until we have the right and ability to manufacture and supply YUTIQ for commercialization in the United States. The term of the Supply Agreement is for a period of two years and thereafter automatically renews for successive one-year terms unless either party provides notice of non-renewal to the other party within a specified period of time prior to the beginning of the next automatic renewal term, provided, that the Supply Agreement automatically terminates upon the successful completion of the transfer of manufacturing for YUTIQ to us or our designee. The Supply Agreement also automatically terminates upon termination of the Product Rights Agreement.

For more information about our agreements with EyePoint Parent and EyePoint, including how we calculate the royalty percentages we are required to pay, see Note 9 and Note 17 in the Interim Financial Statements.

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Consolidated Results of Operations

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands, except share and per share data)
REVENUE:
PRODUCT REVENUE, NET	$	17,538	$	14,604	$	31,084	$	26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(2,425)		(2,166)		(4,453)		(3,846)
GROSS PROFIT		15,113		12,438		26,631		22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		3,648		3,932		7,812		7,515
GENERAL AND ADMINISTRATIVE EXPENSES		4,373		2,945		8,544		6,185
SALES AND MARKETING EXPENSES		6,434		6,865		12,238		13,718
DEPRECIATION AND AMORTIZATION		1,866		670		2,547		1,359
OPERATING EXPENSES		16,321		14,412		31,141		28,777
LOSS FROM OPERATIONS		(1,208)		(1,974)		(4,510)		(6,121)
INTEREST EXPENSE AND OTHER		(1,694)		(1,383)		(3,361)		(2,747)
UNREALIZED FOREIGN CURRENCY (LOSS) GAIN, NET		(7)		38		(20)		146
LOSS ON EXTINGUISHMENT OF DEBT		(1,079)		—		(1,079)		—
CHANGE IN FAIR VALUE OF WARRANT ASSET		(105)		221		(91)		(331)
CHANGE IN FAIR VALUE OF WARRANT LIABILITY		(5,911)		—		(5,911)		—
NET LOSS BEFORE TAXES		(10,004)		(3,098)		(14,972)		(9,053)
INCOME TAX PROVISION		(25)		(17)		(25)		(17)
NET LOSS		(10,029)		(3,115)		(14,997)		(9,070)
PREFERRED STOCK DIVIDENDS		(669)		—		(683)		—
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS	$	(10,698)	$	(3,115)	$	(15,680)	$	(9,070)
NET LOSS PER SHARE APPLICABLE TO COMMON STOCKHOLDERS — Basic and Diluted	$	(1.32)	$	(0.45)	$	(2.07)	$	(1.30)
WEIGHTED AVERAGE SHARES OUTSTANDING — Basic and Diluted		8,093,640		6,999,707		7,565,868		6,995,247

Revenue

We generate revenue from sales of ILUVIEN and YUTIQ, our two products. In addition to generating revenue from product sales, we seek to generate revenue from other sources such as upfront fees, milestone payments in connection with collaborative or strategic relationships, and royalties resulting from the licensing of ILUVIEN or any future product candidates and other intellectual property. Revenue from our international distributors fluctuates depending on the timing of the shipment of ILUVIEN to the distributors and the distributors’ sales of ILUVIEN to their customers.

Product revenue, net increased by approximately $2.9 million, or 20%, to approximately $17.5 million for the three months ended June 30, 2023, compared to approximately $14.6 million for the three months ended June 30, 2022. The increase was primarily due to sales of YUTIQ beginning in May 2023 in the U.S. as well as increased unit sales volume of ILUVIEN in both the U.S. and International segments of our business.

Product revenue, net increased by approximately $4.6 million, or 17%, to approximately $31.1 million for the six months ended June 30, 2023, compared to approximately $26.5 million for the six months ended June 30, 2022. The increase was primarily due to sales of YUTIQ beginning in May 2023 in the U.S. as well as increased unit sales volume of ILUVIEN in both the U.S. and International segments of our business.

Adjustments in net product revenue to exclude fluctuations in foreign currency exchange rates result in a non-GAAP financial measure, which we refer to as adjusted net product revenue. Please refer to “Non-GAAP Financial Measure” on page 47 for information about this non-GAAP financial measure and a reconciliation of GAAP net product revenue to non-GAAP adjusted net product revenue.

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Cost of Goods Sold, Excluding Depreciation and Amortization, and Gross Profit

Gross profit is affected by costs of goods sold, which includes costs of manufactured goods sold and royalty payments to EyePoint under the New Collaboration Agreement. Additionally, cost of goods sold by our international distributors fluctuates depending on the revenue share attributable to the respective contract.

Cost of goods sold, excluding depreciation and amortization, increased by approximately $260,000, or 12%, to approximately $2.4 million for the three months ended June 30, 2023, compared to approximately $2.2 million for the three months ended June 30, 2022. The increase was primarily related to our increased product sales.

Cost of goods sold, excluding depreciation and amortization, increased by approximately $600,000, or 16%, to approximately $4.5 million for the six months ended June 30, 2023, compared to approximately $3.8 million for the three months ended June 30, 2022. The increase was primarily related to our increased product sales.

Gross profit increased by approximately $2.7 million, or 22%, to approximately $15.1 million for the three months ended June 30, 2023, compared to approximately $12.4 million for the three months ended June 30, 2022. Gross margin was 86% and 85% for the three months ended June 30, 2023 and 2022, respectively.

Gross profit increased by approximately $4.1 million, or 18%, to approximately $26.6 million for the six months ended June 30, 2023, compared to approximately $22.7 million for the six months ended June 30, 2022. Gross margin was 86% and 85% for the six months ended June 30, 2023 and 2022, respectively.

Research, Development and Medical Affairs Expenses

Currently, our research, development and medical affairs expenses are primarily focused on activities that support ILUVIEN and YUTIQ and include salaries and related expenses for research and development and medical affairs personnel, expenses related to clinical trials including our NEW DAY Study, and expenses tied to physician engagement by our medical science liaisons. Our research, development and medical affairs expenses also include costs related to symposia development for physician education, and costs related to compliance with FDA, EEA or other regulatory requirements. We expense both internal and external research and development costs as they are incurred.

Research, development and medical affairs expenses decreased by approximately $280,000, or 7%, to approximately $3.6 million for the three months ended June 30, 2023, compared to approximately $3.9 million for the three months ended June 30, 2022. The decrease was primarily attributable to decreases of approximately $140,000 in clinical study costs and $140,000 in scientific communications costs.

Research, development and medical affairs expenses increased by approximately $300,000, or 4%, to approximately $7.8 million for the six months ended June 30, 2023, compared to approximately $7.5 million for the six months ended June 30, 2022. The increase was primarily attributable to increases of approximately $530,000 in clinical study costs and $130,000 in applicator design costs, partially offset by a decrease of $290,000 in scientific communications costs.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for employees in executive and administrative functions, including finance, accounting, legal, information technology, and human resources. Other significant costs include facilities costs and professional fees for accounting and legal services, including legal services associated with obtaining and maintaining patents and managing license agreements. We expect to continue to incur significant costs to comply with the corporate governance, internal control and similar requirements applicable to public companies.

General and administrative expenses increased by approximately $1.4 million, or 48%, to approximately $4.4 million for the three months ended June 30, 2023, compared to approximately $2.9 million for the three months ended June 30, 2022. The increase was primarily attributable to increases of $630,000 of bad debt expense, $360,000 in professional fees, $130,000 in logistics fees, and $100,000 in office costs during the three months ended June 30, 2023.

General and administrative expenses increased by approximately $2.4 million, or 39%, to approximately $8.5 million for the six months ended June 30, 2023, compared to approximately $6.2 million for the six months ended June 30, 2022. The increase was primarily attributable to increases of $1.5 million of bad debt expense, $550,000 in professional fees, $160,000 in franchise tax costs, and $160,000 in logistics fees during the six months ended June 30, 2023.

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Sales and Marketing Expenses

Sales and marketing expenses consist primarily of compensation for employees for commercial promotion of ILUVIEN and YUTIQ, including the assessment of the commercial opportunity, development of market awareness, pursuit of reimbursement approval, and commercialization generally, including launch plans in new markets. Other costs include third party service fees, professional fees associated with developing plans for ILUVIEN and YUTIQ or any future products or product candidates and maintaining public relations.

Sales and marketing expenses decreased by approximately $430,000, or 6%, to approximately $6.4 million for the three months ended June 30, 2023, compared to approximately $6.9 million for the three months ended June 30, 2022. The decrease was primarily attributable to decreases of approximately $400,000 in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

Sales and marketing expenses decreased by approximately $1.5 million, or 11%, to approximately $12.2 million for the six months ended June 30, 2023, compared to approximately $13.7 million for the six months ended June 30, 2022. The decrease was primarily attributable to decreases of approximately $1.7 million in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

Operating Expenses

As a result of the increases and decreases in various expenses described above, total operating expenses increased by approximately $1.9 million, or 13%, to approximately $16.3 million for the three months ended June 30, 2023, compared to approximately $14.4 million for the three months ended June 30, 2022. The increase was primarily attributable to increases of approximately $1.4 million in general and administrative expenses and $1.2 million in depreciation and amortization, partially offset by decreases of $280,000 in research and development expenses and $430,000 in sales and marketing expenses as described above.

As a result of the increases and decreases in various expenses described above, total operating expenses increased by approximately $2.4 million, or 8%, to approximately $31.1 million for the six months ended June 30, 2023, compared to approximately $28.8 million for the six months ended June 30, 2022. The increase was primarily attributable to increases of approximately $2.4 million in general and administrative expenses, $1.2 million in depreciation and amortization expenses, and $300,000 in research, development and medical affairs expense, partially offset by a decrease of $1.5 million in sales and marketing expenses as described above.

Interest Expense and Other

Interest expense and other increased by approximately $310,000, or 22%, to approximately $1.7 million for the three months ended June 30, 2023, compared to approximately $1.4 million for the three months ended June 30, 2022. This increase is related to the additional borrowing under our credit facility.

Interest expense and other increased by approximately $610,000, or 22%, to approximately $3.4 million for the six months ended June 30, 2023, compared to approximately $2.7 million for the six months ended June 30, 2022. This increase is related to the additional borrowing under our credit facility.

Basic and Diluted Net Loss Applicable to Common Stockholders per Share of Common Stock

We follow FASB Accounting Standards Codification, Earnings Per Share (ASC 260), which requires the reporting of both basic and diluted earnings per share. Because our preferred stockholders participate in dividends equally with common stockholders (if we were to declare and pay dividends), we use the two-class method to calculate EPS. However, our preferred stockholders are not contractually obligated to share in losses.

Basic EPS is computed by dividing net (loss) income available to stockholders by the weighted average number of shares outstanding for the period. Diluted EPS is calculated in accordance with ASC 260 by adjusting weighted average shares outstanding for the dilutive effect of common stock options and warrants we have issued. In periods where a net loss is recorded, no effect is given to potentially dilutive securities, because the effect would be anti-dilutive.

Common stock equivalent securities that would potentially dilute basic EPS in the future but were not included in the computation of diluted EPS because they were either classified as participating and do not share in losses or would have been anti-dilutive. Those securities

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were approximately 6.9 million for the three and six months ended June 30, 2023, and 1.9 million for the three and six months ended June 30, 2022.

Results of Operations – Segment Review

The following selected unaudited financial and operating data are derived from our Interim Financial Statements. The results and discussions that follow reflect how our Chief Executive Officer (CEO), who is the Company’s chief operating decision maker, monitors the performance of our reporting segments.

Our U.S. and International segments represent the sales and marketing, general and administrative and research and development activities dedicated to the respective geographies. The Operating Cost segment primarily represents the general and administrative and research and development activities not specifically associated with the U.S. or International segments and includes expenses such as executive management; information technology administration and support; legal; compliance; clinical studies; and business development. In monitoring performance, aligning strategies and allocating resources, our chief operating decision maker manages and evaluates our U.S., International and Operating Cost segments based on segment income or loss from operations adjusted for certain non-cash items, such as stock-based compensation expense and depreciation and amortization. Therefore, we classify within Other (a) the non-cash expenses included in research, development and medical affairs expenses; general and administrative expenses; and sales and marketing expenses; and (b) depreciation and amortization.

Each of our U.S., International and Operating Cost segments is separately managed and is evaluated primarily upon segment income or loss from operations. Other is presented to reconcile to our consolidated totals. For that reconciliation, please see Note 15 in the Interim Financial Statements. We do not report balance sheet information by segment because our chief operating decision maker does not review that information. We allocate certain operating expenses among our reporting segments based on activity-based costing methods. These activity-based costing methods require us to make estimates that affect the amount of each expense category that is attributed to each segment. Changes in these estimates will directly affect the amount of expense allocated to each segment and therefore the operating profit of each reporting segment.

U.S. Segment

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	11,876	$	8,943	$	19,456	$	15,863
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,290)		(1,060)		(2,195)		(1,875)
GROSS PROFIT		10,586		7,883		17,261		13,988
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,748		1,281		2,910		2,451
GENERAL AND ADMINISTRATIVE EXPENSES		1,101		195		2,205		511
SALES AND MARKETING EXPENSES		4,781		4,568		9,056		9,242
OPERATING EXPENSES		7,630		6,044		14,171		12,204
SEGMENT INCOME FROM OPERATIONS	$	2,956	$	1,839	$	3,090	$	1,784

U.S. Segment – three months ended June 30, 2023 compared to the three months ended June 30, 2022

Product revenue, net. Product revenue, net increased by approximately $2.9 million, or 33%, to approximately $11.9 million for the three months ended June 30, 2023, compared to approximately $8.9 million for the three months ended June 30, 2022. The increase was primarily due to increased end user demand, which represents units purchased by physicians and pharmacies from distributors, as well as sales of YUTIQ beginning in May 2023. The difference between GAAP revenue and end user demand is due to the timing of distributor purchases.

Cost of goods sold, excluding depreciation and amortization. Cost of goods sold, excluding depreciation and amortization, increased by approximately $230,000, or 22%, to approximately $1.3 million for the three months ended June 30, 2023, compared to approximately $1.1 million for the three months ended June 30, 2022. The increase was primarily attributable to our increased product sales.

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Research, development and medical affairs expenses. Research, development and medical affairs expenses increased by approximately $470,000, or 36%, to approximately $1.7 million for the three months ended June 30, 2023, compared to approximately $1.3 million for the three months ended June 30, 2022. The increase was primarily attributable to an increase of $310,000 in clinical study costs and $170,000 in personnel costs.

General and administrative expenses. General and administrative expenses increased by approximately $910,000, or 465%, to approximately $1.1 million for the three months ended June 30, 2023, compared to approximately $200,000 for the three months ended June 30, 2022. The increase was primarily attributable to an increase of approximately $620,000 in bad debt expense for replacement orders and $210,000 in insurance costs.

Sales and marketing expenses. Sales and marketing expenses increased by approximately $210,000, or 5%, to approximately $4.8 million for the three months ended June 30, 2023, compared to approximately $4.6 million for the three months ended June 30, 2022. The increase was primarily attributable to an increase of $200,000 in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

U.S. Segment – six months ended June 30, 2023 compared to the six months ended June 30, 2022

Product revenue, net. Product revenue, net increased by approximately $3.6 million, or 23%, to approximately $19.5 million for the six months ended June 30, 2023, compared to approximately $15.9 million for the six months ended June 30, 2022. The increase was primarily due to increased end user demand, which represents units purchased by physicians and pharmacies from distributors, as well as sales of YUTIQ beginning in May 2023. The difference between GAAP revenue and end user demand is due to the timing of distributor purchases.

Cost of goods sold, excluding depreciation and amortization. Cost of goods sold, excluding depreciation and amortization, increased by approximately $320,000, or 17%, to approximately $2.2 million for the six months ended June 30, 2023, compared to approximately $1.9 million for the six months ended June 30, 2022. The increase was primarily attributable to our increased product sales.

Research, development and medical affairs expenses. Research, development and medical affairs expenses increased by approximately $460,000, or 19%, to approximately $2.9 million for the six months ended June 30, 2023, compared to approximately $2.5 million for the three months ended June 30, 2022. The increase was primarily attributable to an increase of $310,000 in clinical study costs and $140,000 in personnel costs.

General and administrative expenses. General and administrative expenses increased by approximately $1.7 million, or 332%, to approximately $2.2 million for the six months ended June 30, 2023, compared to approximately $510,000 for the six months ended June 30, 2022. The increase was primarily attributable to an increase of approximately $1.3 million in bad debt expense for replacement orders and $400,000 in insurance costs.

Sales and marketing expenses. Sales and marketing expenses decreased by approximately $190,000, or 2%, to approximately $9.1 million for the six months ended June 30, 2023, compared to approximately $9.2 million for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of $160,000 in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

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International Segment

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	5,662	$	5,661	$	11,628	$	10,639
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,135)		(1,106)		(2,258)		(1,971)
GROSS PROFIT		4,527		4,555		9,370		8,668
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		842		807		1,589		1,723
GENERAL AND ADMINISTRATIVE EXPENSES		510		468		1,227		892
SALES AND MARKETING EXPENSES		1,379		2,112		2,794		4,116
OPERATING EXPENSES		2,731		3,387		5,610		6,731
SEGMENT INCOME FROM OPERATIONS	$	1,796	$	1,168	$	3,760	$	1,937

International Segment - three months ended June 30, 2023 compared to the three months ended June 30, 2022

Product revenue, net. Product revenue, net was $5.7 million for each of the three months ended June 30, 2023 and June 30, 2022.

Cost of goods sold, excluding depreciation and amortization. Cost of goods sold, excluding depreciation and amortization was $1.1 million for each of the three months ended June 30, 2023 and June 30, 2022.

Research, development and medical affairs expenses. Research, development and medical affairs expenses increased by approximately $30,000, or 4%, to approximately $840,000 the three months ended June 30, 2023 compared to approximately $810,000 for the three months ended June 30, 2022.

General and administrative expenses. General and administrative expenses increased by approximately $40,000, or 9%, to approximately $510,000 for the three months ended June 30, 2023 compared to approximately $470,000 for the three months ended June 30, 2022.

Sales and marketing expenses. Sales and marketing expenses decreased by approximately $730,000, or 35%, to approximately $1.4 million for the three months ended June 30, 2023, compared to approximately $2.1 million for the three months ended June 30, 2022. The decrease was primarily attributable to a decrease of approximately $680,000 in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

International Segment - six months ended June 30, 2023 compared to the six months ended June 30, 2022

Product revenue, net. Product revenue, net increased by approximately $990,000, or 9%, to approximately $11.6 million for the six months ended June 30, 2023, compared to approximately $10.6 million for the six months ended June 30, 2022. The increase in international product revenue, net for the six months ended June 30, 2023, as reported in U.S. dollars, was primarily due to an increase in end user demand.

Cost of goods sold, excluding depreciation and amortization. Cost of goods sold, excluding depreciation and amortization increased by approximately $290,000, or 15%, to approximately $2.3 million for the six months ended June 30, 2023, compared to approximately $2.0 million for the six months ended June 30, 2022.

Research, development and medical affairs expenses. Research, development and medical affairs expenses decreased by approximately $130,000, or 8%, to approximately $1.6 million for the six months ended June 30, 2023, compared to approximately $1.7 million for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of $140,000 in personnel and consultant costs.

General and administrative expenses. General and administrative expenses increased by approximately $340,000, or 38%, to approximately $1.2 million for the six months ended June 30, 2023 compared to approximately $890,000 for the six months ended June 30,

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2022. The increase was primarily attributable to an increase in bad debt expense related to a former distributor of $190,000 and $170,000 of logistics fees during the six months ended June 30, 2023.

Sales and marketing expenses. Sales and marketing expenses decreased by approximately $1.3 million, or 32%, to approximately $2.8 million for the six months ended June 30, 2023, compared to approximately $4.1 million for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of approximately $1.2 million in marketing costs, including costs to attend conventions, costs related to our direct to patient marketing campaign and costs associated with customer engagement.

Operating Cost Segment

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	$	1,033	$	1,799	$	3,266	$	3,259
GENERAL AND ADMINISTRATIVE EXPENSES		2,619		2,112		4,814		4,393
SALES AND MARKETING EXPENSES		225		133		291		250
OPERATING EXPENSES		3,877		4,044		8,371		7,902
SEGMENT LOSS FROM OPERATIONS	$	(3,877)	$	(4,044)	$	(8,371)	$	(7,902)

Operating Cost Segment - three months ended June 30, 2023 compared to the three months ended June 30, 2022

Research, development and medical affairs expenses. Research, development and medical affairs expenses decreased by approximately $780,000, or 43%, to approximately $1.0 million for the three months ended June 30, 2023, compared to approximately $1.8 million for the three months ended June 30, 2022. The decrease was primarily attributable to decreases of approximately $560,000 of clinical study costs associated with the NEW DAY study as well as safety and quality costs and $140,000 in personnel costs.

General and administrative expenses. General and administrative expenses increased by approximately $510,000, or 24%, to approximately $2.6 million for the three months ended June 30, 2023, compared to approximately $2.1 million for the three months ended June 30, 2022. The increase was primarily attributable to increases of approximately $410,000 in professional fees and $130,000 in office costs.

Sales and marketing expenses. Sales and marketing expenses increased by approximately $90,000 or 69% to approximately $220,000 for the three months ended June 30, 2023, compared to approximately $130,000 for the three months ended June 30, 2022.

Operating Cost Segment - six months ended June 30, 2023 compared to the six months ended June 30, 2022

Research, development and medical affairs expenses. Research, development and medical affairs expenses were approximately $3.3 million for the each of the six months ended June 30, 2023 and June 30, 2022.

General and administrative expenses. General and administrative expenses increased by approximately $420,000, or 10%, to approximately $4.8 million for the six months ended June 30, 2023, compared to approximately $4.4 million for the six months ended June 30, 2022. The increase was primarily attributable to increases of approximately $770,000 in professional fees, partially offset by a decrease in insurance costs of $420,000.

Sales and marketing expenses. Sales and marketing expenses increased by approximately $40,000 or 16% to approximately $290,000 for the six months ended June 30, 2023, compared to approximately $250,000 for the six months ended June 30, 2022.

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Other

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	$	25	$	45	$	47	$	82
GENERAL AND ADMINISTRATIVE EXPENSES		143		170		298		389
SALES AND MARKETING EXPENSES		49		52		97		110
DEPRECIATION AND AMORTIZATION		1,866		670		2,547		1,359
OPERATING EXPENSES		2,083		937		2,989		1,940
SEGMENT LOSS FROM OPERATIONS	$	(2,083)	$	(937)	$	(2,989)	$	(1,940)

Our CEO, who is our chief operating decision maker, manages and evaluates our U.S., International and Operating Cost segments based upon segment income or loss from operations adjusted for certain non-cash items, such as stock-based compensation expense and depreciation and amortization. We classify the non-cash expenses included in research, development and medical affairs expenses, general and administrative expenses, and sales and marketing expenses within Other in the Interim Financial Statements.

Operating expenses. Operating expenses in Other increased by approximately $1.1 million, or 122%, to approximately $2.1 million for the three months ended June 30, 2023, compared to approximately $940,000 for the three months ended June 30, 2022. The increase was primarily attributable to an increase of $1.2 million in depreciation and amortization expenses.

Operating expenses. Operating expenses in Other increased by approximately $1.0 million, or 54%, to approximately $3.0 million for the six months ended June 30, 2023, compared to approximately $1.9 million for the six months ended June 30, 2022. The increase was primarily attributable to an increase of $1.1 million in depreciation and amortization expenses.

Depreciation and amortization. Depreciation and amortization increased by approximately $1.2 million, or 179%, to approximately $1.9 million for the three months ended June 30, 2023, compared to approximately $670,000 for the three months ended June 30, 2022. The increase was primarily attributable to amortization of the YUTIQ intangible asset which was acquired in May 2023.

Depreciation and amortization. Depreciation and amortization increased by approximately $1.2 million, or 87%, to approximately $2.5 million for the six months ended June 30, 2023, compared to approximately $1.4 million for the six months ended June 30, 2022. The increase was primarily attributable to amortization of the YUTIQ intangible asset which was acquired in May 2023.

Liquidity and Capital Resources

Overview

Since inception, we have incurred recurring losses, negative cash flow from operations and have accumulated a deficit in stockholders’ equity of $412.8 million as of June 30, 2023. As of June 30, 2023, we had approximately $18.8 million in cash and cash equivalents. In March 2023 we received $12.0 million in gross proceeds from the Tranche 1 closing of our Series B Preferred Stock financing and an additional $2.5 million in cash in connection with the Fifth Amendment to the 2019 Loan Agreement. We have used these funds to commercialize ILUVIEN, to fund our NEW DAY clinical trial and for general corporate purposes. In May 2023 we received $67.0 million in gross proceeds from the Tranche 2 closing of our Series B Preferred Stock financing and an additional $20.0 million in cash in connection with the Sixth Amendment to the 2019 Loan Agreement. We used these funds to fund a portion of the upfront payment to acquire the commercial rights for YUTIQ.

Indebtedness

Loans from SLR Investment Corp. (SLR). In December 2019, we refinanced our previously outstanding debt facility by entering into a $45.0 million loan and security agreement (the 2019 Loan Agreement) with SLR, as Agent, and the parties signing the loan agreement from time to time as Lenders, including SLR in its capacity as a Lender (collectively, the Lenders). The 2019 Loan Agreement has been amended on multiple occasions.

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On February 22, 2022, we entered into a Third Amendment to the 2019 Loan Agreement (the Third Amendment), which, among other things:

(a)specified the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2022, that we must achieve for each such period (the Third Revenue Covenant);

(b)consented to maintaining a lower minimum revenue amount under the Third Revenue Covenant for the trailing six-month period ended December 31, 2021 than previously required under the 2019 Loan Agreement (and waived any event of default that may have occurred or may be deemed to have occurred as a result of our lower revenue amount for that period); and

(c)required that the Third Revenue Covenant be tested at June 30, 2023 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of our projected revenues in accordance with an annual plan we must submit to the Collateral Agent by January 15 of such year, such plan to be thereafter approved by our Board and the Collateral Agent in its sole discretion no later than February 28 of such year.

On December 7, 2022, we entered into a Fourth Amendment to the 2019 Loan Agreement (the Fourth Amendment), which, among other things:

(a)extended the amortization date from January 1, 2023 to April 1, 2023, provided that such date could be further extended to July 1, 2023 upon our request and in consultation with the Lenders, in each of the Lenders’ sole discretion;

(b)specified the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023, that we must achieve for each such period (the Fourth Revenue Covenant); and

(c)required that the Fourth Revenue Covenant be tested at June 30, 2024 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of our projected revenues in accordance with an annual plan submitted to the Collateral Agent by January 15th of such year, such plan to be thereafter approved by the Board and the Collateral Agent in its sole discretion no later than February 28 of such year.

On March 24, 2023, we entered into a Fifth Amendment to the 2019 Loan Agreement (the Fifth Amendment), which among other things:

(a)added an additional tranche of $2,500,000 to increase the existing term loan facility to $47,500,000, subject to certain closing conditions (the New Term Loan);

(b)extended a $15,000,000 additional term loan available to be funded at the Lender’s sole discretion;

(c)specified an annual interest rate equal to 5.15% plus the greater of (i) 4.60% and (ii) one-month SOFR, which will reset monthly, on the New Term Loan;

(d)extended the maturity date to April 30, 2028 and the interest-only period to April 30, 2025, which may be extended an additional 12 months if the Company meets certain financial targets by June 30, 2025; and

(e)specified the minimum revenue amount, calculated on a trailing six-month basis beginning with the six month period ended June 30, 2023, and tested at the end of each calendar quarter, that the Company must achieve for each such.

On May 17, 2023 we entered into a Sixth Amendment to the 2019 Loan Agreement (the Sixth Amendment and the 2019 Loan Agreement as so amended, the Amended Loan Agreement), which among other things, increased the term loan available to $20,000,000 and fully funded the term loan, and specified the minimum revenue amount calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023 and 2024, that we must achieve for each such period. We currently have no additional borrowing capacity, and the 2019 Loan Agreement generally prohibits any additional debt unless we obtain the prior consent of the lenders.

The Federal Reserve raised interest rates seven times in 2022 and four times to date in 2023 and has indicated it may continue to do so to combat the effects of inflation. An increase in SOFR would increase our interest costs. Significant increases in our interest costs could materially and adversely affect our results of operations and our ability to pay amounts due under the 2019 Loan Agreement, and any increase in the interest we pay would reduce our cash available for working capital, acquisitions, and other uses.

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During 2022 and at June 30, 2023, we maintained compliance with our revenue covenant at each reportable date. We expect to comply with the revenue covenant for the remaining measurement dates in 2023. If we fail to comply with the revenue covenant and the lenders do not provide consent and waiver, acceleration of the maturity of the loan is one of the remedies available to the lenders. If the lenders accelerate the maturity of the loan, we would be forced to find alternative financing or enter into an alternative agreement with the lenders. We cannot be sure that alternative financing will be available when needed or that, if available, the alternative financing could be obtained on terms that are not significantly detrimental to us or our stockholders.

$20.0 million Ocumension Transaction

On April 14, 2021, we entered into a Share Purchase Agreement with Ocumension Therapeutics, pursuant to which we offered and sold to Ocumension 1,144,945 shares of our common stock, at a purchase price of $8.734044 per share, for aggregate gross proceeds of $10.0 million. The number of shares sold was equal to 19.9% of the number of shares of common stock outstanding immediately before the closing. In addition, we received a nonrefundable upfront license payment of $10.0 million pursuant to the Ocumension License Agreement. Under that agreement, we granted an exclusive license for the development and commercialization of our 0.19 mg fluocinolone acetonide intravitreal implant in applicator under Ocumension’s own branded label in China, East Asia and the Western Pacific.

Series B Preferred Stock Financings

In March 2023, we issued and sold an aggregate of 12,000 shares of Series B Convertible Preferred Stock at a per-share purchase price of $1,000 and warrants to purchase common stock for aggregate gross proceeds of $12.0 million. In May 2023, we issued and sold an aggregate of 67,000 shares of Series B Convertible Preferred Stock at a per-share purchase price of $1,000 and warrants to purchase common stock for aggregate gross proceeds of $67.0 million. On August 1, 2023, we amended the Certificate of Designation of Series B Convertible Preferred Stock to allow for the issuance of the Pre-Funded Warrants. See “—Recent Developments”.

Current Cash Position

As of June 30, 2023, we had approximately $18.8 million in cash and cash equivalents, an increase of $13.5 million from the $5.3 million in cash and cash equivalents that we reported as of December 31, 2022. As previously disclosed, we have used some of our cash and cash equivalents to invest in targeted spending programs in both the U.S. and international markets to drive reengagement with physicians and accelerate our growth.

We may need to raise alternative or additional financing to fund our operations and support growth. For example, in March 2023, the Federal Deposit Insurance Corporation (FDIC) took control and was appointed receiver for a number of banks, including Silicon Valley Bank and Signature Bank, and in May 2023 JP Morgan acquired First Republic Bank as part of a controlled FDIC takeover. As of the date of this report, we do not have direct exposure to SVB or Signature, but we cannot predict the broader impact or follow-on effects of these insolvencies. If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened. The source, timing, and availability of any future financing will depend upon market conditions and other factors that may be outside of our control. Funding may not be available when needed, at all, or on terms acceptable us. If we were to raise additional funds by issuing equity securities, substantial dilution to existing stockholders could result, and the terms of any new equity securities may have a preference over our common stock. If we were to attempt to raise additional funds through strategic collaboration agreements, we may not be successful in obtaining those agreements, or in receiving milestone or royalty payments under them. If we were to attempt to raise additional funds through debt financing, we would be required to obtain the permission or participation of SLR, which we might not be able to obtain. Because of these factors and the requirement to satisfy the Revenue Covenant and our history of recurring losses and negative cash flow from operations, there may be doubt about our ability to continue as a going concern within one year after the issuance of the Interim Financial Statements. However, we believe the current cash reserves and expected revenue from operations are sufficient to fund our operation for at least the next 12 months.

Sources and Uses of Cash for the six months ended June 30, 2023 compared to the six months ended June 30, 2022

For the six months ended June 30, 2023, net cash used in our operations was approximately $8.2 million. The cash used in our operations was impacted by our net loss of approximately $15.0 million, a net increase of $2.9 million in accounts receivable, and a net decrease of $1.9 million in accounts payable, accrued expenses and other current liabilities. Cash used in operations for the six months ended June 30, 2023 was offset by $2.5 million of non-cash depreciation and amortization, $1.1 million loss on the extinguishment of debt associated with the Sixth Amendment, an increase in long-term liabilities of $920,000, a decrease of $560,000 in inventory, $490,000 of non-cash interest expense associated with the amortization of our debt discount and deferred financing costs, and $440,000 of non-cash stock-based compensation expense.

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For the six months ended June 30, 2022, net cash used in our operations was approximately $7.8 million. The cash used in our operations was impacted by our net loss of approximately $9.1 million, a net increase of $1.7 million in accounts receivable, and a net decrease of $1.1 million in accounts payable, accrued expenses and other current liabilities. Cash used in operations for the six months ended June 30, 2022 was offset by $1.4 million of non-cash depreciation and amortization, a decrease of $940,000 in inventory, $580,000 of non-cash stock-based compensation expense, $550,000 of non-cash interest expense associated with the amortization of our debt discount and deferred financing costs, a decrease of $510,000 in prepaid expenses and other current assets, and a $330,000 decrease in fair value of our warrant asset.

For the six months ended June 30, 2023, net cash used in our investing activities was approximately $75.4 million, which was primarily due to the acquisition of intangible assets in May 2023.

For the six months ended June 30, 2022, net cash used in our investing activities was approximately $40,000.

For the six months ended June 30, 2023, net cash provided by our financing activities was approximately $97.1 million, which was primarily due to the $78.3 million gross proceeds from the closings of our Series B Preferred Stock financings, the $22.5 million received in connection with the Fifth and Sixth Amendments to the 2019 Loan Agreement, and $2.4 million received in connection with common stock issuances. The cash provided was partially offset by $4.1 million of debt issuance costs, the $940,000 repurchase of Series A Preferred Stock, $510,000 in preferred stock issuance costs, and the $310,000 repurchase of common stock.

For the six months ended June 30, 2022, net cash used in our financing activities was approximately $170,000, which was primarily due to payments of finance lease obligations.

Contractual Obligations and Commitments

The NEW DAY Study. In January 2020, we began entering into agreements with contract research organizations (CROs) and physician clinics in connection with a multicenter, single masked, randomized and controlled trial designed to generate prospective data evaluating ILUVIEN as a baseline therapy in the treatment of DME and demonstrate its advantages over the current standard of care of repeat anti-VEGF injections (the NEW DAY Study). The NEW DAY Study is planned to enroll approximately 300 treatment-naïve, or almost naïve, DME patients in approximately 40 sites around the U.S. For the three months ended June 30, 2023 and 2022, we incurred approximately $1.4 million and $1.1 million, respectively, of expense associated with the NEW DAY Study. For the six months ended June 30, 2023 and 2022, we incurred approximately $2.8 million and $2.1 million, respectively, of expense associated with the NEW DAY Study. In connection with the NEW DAY Study, we expect to incur additional expenses of approximately $4.2 million for the remainder of 2023, and $2.1 million in 2024.

Manufacturing Services Agreement with Alliance. In February 2016, we and Alliance Medical Products Inc., a Siegfried Company (Alliance), a third-party manufacturer, amended and restated the parties’ existing agreement for the manufacture of the ILUVIEN implant, the assembly of the ILUVIEN applicator and the packaging of the completed ILUVIEN commercial product. Under the amended and restated Alliance agreement, its term was extended by five years, at which point the agreement became automatically renewable for successive one-year periods unless either party delivers notice of non-renewal to the other party at least 12 months before the end of the term or any renewal term. We are responsible for supplying the ILUVIEN applicator and the active pharmaceutical ingredient, and we must order at least 80% of the ILUVIEN units required in the covered territories from Alliance.

Manufacturing Services Agreement with Cadence. On October 30, 2020, we entered into a Manufacturing Services Agreement (the Cadence Agreement) with Cadence, Inc., for the manufacture of certain component parts of the ILUVIEN applicator (the components) at its facility near Pittsburgh, Pennsylvania. Under the Cadence Agreement, we will pay certain per-unit prices based on regularly scheduled shipments of a minimum number of components. The initial term of the Cadence Agreement expires on October 30, 2025. After the expiration of the initial term, the Cadence Agreement will automatically renew for separate, successive one-year terms unless either party provides written notice to the other party that it does not intend to renew the Cadence Agreement at least 24 months before the end of the term. The Cadence Agreement may be terminated by either party under certain circumstances. We have transferred the manufacturing of component parts of the ILUVIEN inserter to Cadence from our prior manufacturer and have spent cash resources to purchase new equipment, to update clean room facilities and to assist in the regulatory approval process. In connection with the Cadence Agreement, we expect to be invoiced approximately $650,000 in 2023.

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Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, that would have been established to facilitate off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of SEC Regulation S-K) or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships. We enter into guarantees in the ordinary course of business related to the guarantee of our own performance and the performance of our subsidiaries.

Impact of Recent Accounting Pronouncements

See Note 3 in the Interim Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and expected effects on results of operations and financial condition, if known.

Foreign Exchange

Our international operations are subject to certain opportunities and risks, including currency fluctuations and governmental actions. The impact of fluctuations in foreign currency exchange rates decreased our net product revenue for the six months ended June 30, 2023 by approximately $440,000.

We expect foreign currency exchange rate fluctuations will have an unfavorable impact through the end of the year.

Non-GAAP Financial Measure

We are subject to variability of our reported U.S. dollar results due to changes in foreign currency exchange rates. Those changes have been volatile over the past several years. The adjustment of the effects of foreign currency exchange in our international segment as if foreign exchange rates had remained constant with the prior periods, or what we refer to as adjusted net product revenue, is a non-GAAP financial measure as defined in Regulation G promulgated under the Securities Exchange Act of 1934, as amended. We report our financial results in compliance with GAAP but believe that adjusting our net product revenue to exclude fluctuations in foreign currency exchange rates allows management to better understand our ongoing operations and analyze our financial performance from period to period. We also believe this non-GAAP financial measure provides additional information to investors that enables enhanced comparison to prior periods and additional insight into the underlying performance of our business outside of the U.S. Net product revenue for the three and six months ended June 30, 2023 has been adjusted in certain instances in this report to exclude the impact of fluctuations in foreign currency exchange rates in the comparisons to GAAP net product revenue for the three and six months ended June 30, 2022. See the table below entitled “Reconciliation of GAAP Net Product Revenue to Non-GAAP Adjusted Net Product Revenue.” GAAP net product revenue is the most directly comparable GAAP financial measure to adjusted net product revenue.

This non-GAAP financial measure, as presented, may not be comparable to a similarly titled measure reported by other companies, including companies in our industry, because not all companies adjust revenue for currency fluctuations in an identical manner or may use other financial measures to evaluate their performance. Therefore, this non-GAAP financial measure may be limited in its usefulness for comparison between companies.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for other financial performance measures prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. The principal limitation of this non-GAAP financial measure is that it excludes significant elements required by GAAP to be recorded in our financial statements. In addition, this non-GAAP financial measure is subject to inherent limitations because it reflects the exercise of judgment by management.

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RECONCILIATION OF GAAP NET PRODUCT REVENUE TO NON-GAAP ADJUSTED NET PRODUCT REVENUE

Amounts presented for the three and six-month periods ended June 30, 2022 are our

reported amounts we prepared in accordance with GAAP

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(In thousands)
GAAP NET PRODUCT REVENUE	$	17,538	$	14,604	$	31,084	$	26,502
Adjustment to net product revenue:
Foreign currency fluctuations, net		136		—		(137)		—
NON-GAAP ADJUSTED NET PRODUCT REVENUE	$	17,674	$	14,604	$	30,947	$	26,502

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Because we are allowed to comply with the disclosure obligations applicable to a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, with respect to this Quarterly Report on Form 10-Q, we are not required to provide the information required by this Item. 

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

From time to time, we may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. We currently are not a party to any threatened or pending material litigation and do not have contingency reserves established for any litigation liabilities. However, third parties might allege that we are infringing their patent rights or that we are otherwise violating their intellectual property rights, including trade names and trademarks. Such third parties may resort to litigation. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

ITEM 1A. Risk Factors

In the 2022 Form 10-K, we identify under Item 1A of Part I important factors that could affect our business, financial condition, results of operations and future operations and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Quarterly Report on Form 10-Q. However, the risks described in the 2022 Form 10-K are not the only risks we face. Additional risks and uncertainties that we currently deem to be immaterial or not currently known to us, as well as other risks reported from time to time in our reports to the SEC, also could cause our actual results to differ materially from our anticipated results or other expectations. There have been no material changes in our risk factors since the filing of the 2022 Form 10-K, other than the addition of the text below.

Failure to integrate YUTIQ or any business, product or technology we may acquire in the future, will cause our business, financial condition and operating results to suffer.

Integrating any business, product or technology, including YUTIQ, we acquire is expensive and time-consuming and can disrupt and adversely affect our ongoing business, including product sales, and distract our management. Our ability to successfully integrate any business, product or technology we acquire depends on a number of factors, including, but not limited to, our ability to:

minimize the disruption and distraction of our management and other employees in connection with the integration of any acquired business, product or technology;

maintain and increase sales of our existing products;

establish or manage the transition of the manufacture and supply of any acquired product, including the necessary active pharmaceutical ingredients, excipients and components;

identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology;

manage the transition and migration of all commercial, financial, legal, clinical, regulatory and other pertinent information relating to any acquired business, product or technology;

comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology;

obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payors with respect to any acquired product; and

maintain and extend intellectual property protection for any acquired product or technology.

If we are unable to perform the above functions or otherwise effectively integrate YUTIQ or any businesses, products or technologies we may acquire in the future, our business, financial condition and operating results will suffer.

In addition, we may not to achieve the expected financial performance or synergies from businesses, products or technologies we acquire, including YUTIQ or may experience unexpected delays, challenges and expenses, and unexpected costs associated with integrating and operating the acquired business, product or technology.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities

None.

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ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

On August 8, 2023, the Compensation Committee of our Board of Directors approved a one-time special cash bonus in the amount of £61,000 and $75,000, respectively, for Philip Ashman, Ph.D., our Chief Operating Officer and Senior Vice President Commercial Operations Europe, and David Holland, our Chief Marketing Officer, Senior Vice President Corporate Communications and Managed Markets.  The special bonuses are payable in a lump sum and were awarded in recognition of their leadership and significant contributions to the Company, including in connection with our acquisition of the YUTIQ commercialization rights and the improvement of our capital structure and balance sheet through our recent equity and debt financings. These special bonuses are separate from any annual cash bonuses that may be awarded for the year ended December 31, 2023.

 
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ITEM 6. EXHIBITS

Exhibit Number	Description
2.1	Product Rights Agreement, dated May 17, 2023, by and among Alimera Sciences, Inc. and EyePoint Pharmaceuticals, Inc. (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, as filed on May 18, 2023, and incorporated herein by reference).***
3.1	Restated Certificate of Incorporation of Registrant, as amended on various dates (filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K, as filed on March 2, 2020, and incorporated herein by reference).
3.2	Certificate of Designation of Series B Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed on March 27, 2023, and incorporated herein by reference).
3.3	Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed on May 18, 2023, and incorporated herein by reference).
3.4	Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed on August 2, 2023, and incorporated herein by reference).
3.5	Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K, as filed on March 2, 2020 and incorporated herein by reference).
10.1	Commercial Supply Agreement, dated May 17, 2023, by and among Alimera Sciences, Inc. and EyePoint Pharmaceuticals, Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed on May 18, 2023, and incorporated herein by reference).***
10.2	Joinder and Amendment to Securities Purchase Agreement, dated May 17, 2023, by and among Alimera Sciences, Inc. and the purchasers party thereto (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed on May 18, 2023, and incorporated herein by reference).
10.3*	Sixth Amendment to Loan and Security Agreement dated as of May 17, 2023, by and among Alimera Sciences, Inc., SLR Investment Corp., as Collateral Agent, and the parties signatory thereto as Lenders, including SLR in its capacity as a Lender.***
10.4*	Omnibus Exit Fee Agreement dated as of May 17, 2023, by and among Alimera Sciences, Inc., SLR Investment Corp., as Collateral Agent, and the parties signatory thereto as Lenders, including SLR in its capacity as a Lender.
10.5*	Joinder and Amendment to Registration Rights Agreement dated as of May 17, 2023, by and among Alimera Sciences, Inc. and the purchasers party thereto.
31.1*	Certification of the Principal Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Chief Executive Officer and Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Changes in Stockholders’ Deficit and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).

*Filed herewith

**Furnished herewith

***Certain confidential information contained in this agreement has been omitted because it is (i) not material and (ii) something the company actually treats as confidential.

The certification attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Alimera Sciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALIMERA SCIENCES, INC.
August 11, 2023	By:	/s/ Richard S. Eiswirth, Jr.
		Richard S. Eiswirth, Jr.
		President and Chief Executive Officer
		(Principal Executive Officer)

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EX-10.3

Exhibit 10.3

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS (I) NOT MATERIAL AND (II) OF THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

THISSIXTHAMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of May 17, 2023 (the “Sixth Amendment Effective Date”), by and among SLR Investment Corp., a Maryland corporation (formerly known as Solar Capital LTD.) (“SLR”), as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”), the lenders party hereto including SLR in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”), and Alimera Sciences, Inc., a Delaware corporation (“Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower, the Lenders, and Collateral Agent are parties to that certain Loan and Security Agreement, dated as of December 31, 2019 (as amended by the First Amendment to Loan and Security Agreement, dated as of May 1, 2020, by that certain Second Amendment to Loan and Security Agreement dated as of March 30, 2021, by that certain Third Amendment to Loan and Security Agreement dated as of February 22, 2022,  by that certain Fourth Amendment to Loan and Security Agreement dated as of December 7, 2022, as amended by the Fifth Amendment to Loan and Security Agreement dated as of March 24, 2023, and as further amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Agreement”; and the Existing Loan Agreement, as amended by this Amendment and as further amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). 

WHEREAS, Borrower has requested certain amendments to the Existing Agreement as more fully set forth herein and Collateral Agent and the Lenders are willing to agree to such request, subject to and in accordance with the terms and conditions set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, the Lenders, and Collateral Agent hereby agree as follows:

DEFINITIONS; Interpretation.

(a)Terms Defined in Loan Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

(b)Interpretation.  The rules of interpretation set forth in Section 1.1 of the Loan Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

Amendments to THE EXISTING loan agreement.

(a)Upon satisfaction of the conditions set forth in Section 3 hereof, the Existing Loan Agreement is hereby amended as follows:

(i)Exhibit A attached hereto sets forth a clean copy of the Loan Agreement as amended hereby;

(ii)In Exhibit B hereto, deletions of the text in the Existing Loan Agreement (including, to the extent included in such Exhibit B, each Schedule or Exhibit to the Existing Loan Agreement) are indicated by struck-through text, and insertions of text are indicated by bold, double-underlined text.

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(b)References Within Existing Loan Agreement.  Each reference in the Existing Loan Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Existing Loan Agreement as amended by this Amendment.  This Amendment shall be a Loan Document.

CONDITIONS TO EFFECTIVENESS

.  This Amendment shall become effective upon satisfaction of each of the conditions specified below:

(a)This Amendment.  Collateral Agent shall have received one or more counterparts of this Amendment, duly executed, completed and delivered by Collateral Agent, each Lender and Borrower;

(b)Fees and Expenses.  Borrower shall have paid (i) all invoiced costs and expenses of Collateral Agent and the Lenders party hereto, and the reasonable and documented fees and disbursements of counsel to Collateral Agent and the Lenders party hereto, in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Sixth Amendment Effective Date or after such date, and (ii) all other fees, costs and expenses, if any, due and payable as of the Sixth Amendment Effective Date under the Loan Agreement.

(c)Representations and Warranties; No Default.  As of the date of this Amendment, after giving effect to the amendment of the Loan Agreement contemplated hereby:

(i)The representations and warranties contained in Section 4 of this Amendment shall be true and correct on and as of the date of this Amendment as though made on and as of such date; and

(ii)There exist no Default or Events of Default; and

(d)Collateral Agent shall have received all other documents and instruments as Collateral Agent or any Lender may reasonably deem necessary or appropriate to effectuate the intent and purpose of this Amendment.

REPRESENTATIONS AND WARRANTIES

.  To induce Collateral Agent and the Lenders to enter into this Amendment, Borrower hereby confirms, as of the date hereof, (a) that the representations and warranties made by it in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct in all material respects; provided,  however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof, provided, further, that to the extent such representations and warranties by their terms expressly relate only to a prior date such representations and warranties shall be true and correct as of such prior date; (b) that there has not been and there does not exist a Material Adverse Change; (c) reserved; (d) Collateral Agent and the Lenders have and shall continue to have valid, enforceable and perfected first-priority liens, subject only to Permitted Liens, on and security interests in the Collateral and all other collateral heretofore granted by Borrower to Collateral Agent and the Lenders pursuant to the Loan Documents or otherwise granted to or held by Collateral Agent and the Lenders; (e) the agreements and obligations of Borrower contained in the Loan Documents and in this Amendment constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by the application of general principles of equity; and (f) the execution, delivery and performance of this Amendment by Borrower will not (i) conflict with Borrower’s organizational documents, including its Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii)contravene, conflict or violate any applicable material order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its property or assets may be bound or affected, and (iv) constitute an event of default under any material agreement by which Borrower or any of its properties is bound, the termination or noncompliance with which could reasonably be expected to have a Material Adverse Change.  For the purposes of this Section, each reference in Section 5 of the Loan Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan Agreement as amended by this Amendment.

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LOAN DOCUMENTS OTHERWISE NOT AFFECTED; REAFFIRMATION; NO NOVATION

.

(a)Except as expressly amended pursuant hereto or referenced herein, the Loan Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.  The Lenders’ and Collateral Agent’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments in the future. 

(b)Borrower hereby expressly (1) grants, reaffirms, ratifies and confirms its Obligations under the Loan Agreementand the other Loan Documents, (2) grants,reaffirms, ratifies and confirms the grant of security under Section 4 of the Loan Agreement, (3)grants and reaffirms that such grant of security in the Collateral secures all Obligations under the Loan Agreement, and with effect from (and including) the date hereof, such grant of security in the Collateral: (x) remains in full force and effect; and (y) secures all Obligations under the Loan Agreement, as amended by this Amendment, and the other Loan Documents, (4) agrees that this Amendment shall be a “Loan Document” under the Loan Agreement, and (5) agrees that the Loan Agreement and each other Loan Document shall remain in full force and effect following any action contemplated in connection herewith.

(c)Borrower hereby expressly reaffirms, ratifies, and confirms its obligations under (1) that certain Exit Fee Agreement, dated as of January 5, 2018, by and among SLR, the lenders party thereto, and Borrower, as amended, amended and restated, supplemented or otherwise modified from time to time (the “2018 Exit Fee Agreement”), and (2) that certain Exit Fee Agreement, dated as of December 31, 2019, by and among SLR, the lenders party thereto, and Borrower, as amended, amended and restated, supplemented or otherwise modified from time to time (the “2019 Exit Fee Agreement”).  Borrower acknowledges and agrees that the obligations under each of the 2018 Exit Fee Agreement, the 2019 Exit Fee Agreement and the Fifth Amendment Exit Fee Agreement are cumulative, independent obligations and that the Fifth Amendment Exit Fee Agreement in no way amends, amends and restates, supplements or otherwise modifies the terms of the 2018 Exit Fee Agreement or the 2019 Exit Fee Agreement. Notwithstanding the foregoing or anything herein to the contrary, in no event shall the transactions consummated on or prior to the Sixth Amendment Effective Date in connection with the Borrower’s receipt of Sixth Amendment Net Equity Proceeds, including the issuance, conversion or exercise of such securities, constitute an “Exit Event” for purposes of the fees contemplated pursuant to the 2018 Exit Fee Agreement, the 2019 Exit Fee Agreement or the Fifth Amendment Exit Fee Agreement.

(d)This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute an accord and satisfaction of Borrower’s Obligations under or in connection with the Loan Agreement and any other Loan Document or to modify, affect or impair the perfection or continuity of Collateral Agent’s security interest in, (for the ratable benefit of the Secured Parties) security titles to or other liens on any Collateral for the Obligations.

Conditions

.  For purposes of determining compliance with the conditions specified in Section 3, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Collateral Agent shall have received notice from such Lender prior to date hereof specifying its objection thereto.

RELEASE

.  In consideration of the agreements of Collateral Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Collateral Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lenders and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money,

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accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.  Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.  Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

NO RELIANCE

.  Borrower hereby acknowledges and confirms to Collateral Agent and the Lenders that Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

rESERVED

. 

BINDING EFFECT.

 This Amendment binds and is for the benefit of the successors and permitted assigns of each party.

GOVERNING LAW

.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

COMPLETE AGREEMENT; AMENDMENTS

.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

SEVERABILITY OF PROVISIONS

.  Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.

COUNTERPARTS

.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.

LOAN DOCUMENTS

.  This Amendment and the documents related thereto shall constitute Loan Documents.

ELECTRONIC EXECUTION OF CERTAIN OTHER DOCUMENTS

.  The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by Collateral Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and

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National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

[Balance of Page Intentionally Left Blank; Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year specified at the beginning hereof.

BORROWER:

ALIMERA SCIENCES, INC.

By:/s/ Rick Eiswirth
Name:Rick Eiswirth
Title:President and Chief Executive Officer

[Signature Page to Sixth Amendment to Loan and Security Agreement]

COLLATERAL AGENT AND LENDER:

SLR INVESTMENT CORP.

By:/s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

[Signature Page to Sixth Amendment to Loan and Security Agreement]

LENDERS:

SUNS SPV LLC

By:/s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND BDC SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME BDC LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CORPORATE LENDING FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

[Signature Page to Sixth Amendment to Loan and Security Agreement]

SCP CAYMAN DEBT MASTER FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP SF DEBT FUND LP

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP CAYMAN DEBT MASTER FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SLR CP SF DEBT FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

[Signature Page to Sixth Amendment to Loan and Security Agreement]

Exhibit A

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (as the same may be amended, restated, modified, or supplemented from time to time, this “Agreement”) dated as of December 31, 2019 (the “Effective Date”) among SLR Investment Corp., a Maryland corporation (formerly known as Solar Capital Ltd.) (“Solar”), as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”), and the lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”), and Alimera Sciences, Inc., a Delaware corporation with offices located at 6120 Windward Parkway, Suite 290, Alpharetta, GA 30005 (“Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders.  The parties agree as follows:

1.DEFINITIONS AND OTHER TERMS

1.1Terms.  Capitalized terms used herein shall have the meanings set forth in Section 1.4 to the extent defined therein.  All other capitalized terms used but not defined herein shall have the meaning given to such terms in the Code.  Any accounting term used but not defined herein shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP.  The term “financial statements” shall include the accompanying notes and schedules.  Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof and (b) the financial statements delivered hereunder shall be prepared without giving effect to the implementation of Accounting Standards Codification 606: Revenue from Contracts with Customers.

1.2Section References.  Any section, subsection, schedule or exhibit references are to this Agreement unless otherwise specified.

1.3Divisions.  For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.

1.4Definitions.  The following terms are defined in the Sections or subsections referenced opposite such terms:

“Agreement”	Preamble
“Approved Lender”	Section 12.1
“Borrower”	Preamble
“Claims”	Section 12.2
“Collateral Agent”	Preamble
“Collateral Agent Report”	Exhibit B, Section 5
“Default Rate”	Section 2.3(b)
“Effective Date”	Preamble
“Event of Default”	Section 8
“Indemnified Person”	Section 12.2
“Indemnified Taxes”	Section 2.5(a)
“Lender” and “Lenders”	Preamble
“Lender Transfer”	Section 12.1
“New Subsidiary”	Section 6.10
“non-U.S. Lender”	Section 2.5(a)
“Non-Funding Lender”	Exhibit B, Section 10(c)(ii)
“Other Lender”	Exhibit B, Section 10(c)(ii)
“Original Lender”	Section 1.4, definition of “Required Lenders”

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“Perfection Certificate” and “Perfection Certificates”	Section 5.1
“SEC”	Section 1.4, definition of “GAAP”
“Secured Promissory Note”	Section 2.6
“Solar”	Preamble
“Taxes”	Section 2.5(a)
“Term A Loan(s)”	Section 2.2(a)(i)
“Term B Loan(s)”	Section 2.2(a)(ii)
“Term C Loan(s)”	Section 2.2(a)(iii)
“Term D Loan(s)”	Section 2.2(a)(iv)
“Term Loan(s)”	Section 2.2(a)(iv)
“Transfer”	Section 7.1

In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made under the Code, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made under the Code.

“ACH Letter” is ACH debit authorization in the form of Exhibit F hereto.

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

“Amortization Date”  is May 1, 2025; provided that, if Borrower satisfies the Interest-Only Extension Conditions, at Borrower’s election, the Amortization Date shall be May 1, 2026.

 “Anti‑Terrorism Laws” are any laws, rules, regulations or orders relating to terrorism or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

“Applicable Rate” means the greater of (a) 4.60% and (b) SOFR for a term of one month, which determination by Collateral Agent shall be conclusive in the absence of manifest error.

“Approved Fund” is any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.

“ASCV” means AS C.V., a limited partnership organized under the laws of The Netherlands, having its seat in Amsterdam and registered with the Dutch trade register under number 70560072.

“Blocked Person” is any Person:  (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti‑Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

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“Business Day” is any day that is not a Saturday, Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any state thereof having maturities of not more than one (1) year from the date of acquisition and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of Collateral Agent; (d) any money market or similar funds that exclusively hold any of the foregoing; and (e) cash and cash equivalents held in a foreign currency.

“Code”  is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9  shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained by Borrower or any Guarantor in the United States of America and into which is deposited an amount greater than One Hundred Thousand Dollars ($100,000) at any time.

“Collateral Agent” is Solar, not in its individual capacity, but solely in its capacity as collateral agent on behalf of and for the ratable benefit of the Secured Parties.

“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made under the Code.

“Compliance Certificate” is that certain certificate in substantially the form attached hereto as Exhibit D.

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co‑made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith in accordance with GAAP; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

“Control Agreement” is any control agreement entered into among (a) the depository institution, securities intermediary, or commodity intermediary at which Borrower or any Guarantor maintains a Collateral Account, (b) Borrower or such Guarantor, as applicable, and (c) Collateral Agent, pursuant to which Collateral Agent, for the ratable benefit of the Secured Parties, obtains “control” (within the meaning of the Code) over such Collateral Account.

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

 “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made under the Code.

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“Designated Deposit Account” is Borrower’s deposit account, described as follows:

[***]

“Dollars,”“dollars” and “$” each mean lawful money of the United States.

“EBITDA” means, with respect to Borrower and its Subsidiaries on a consolidated basis, net income plus (i) interest expense, plus (ii) tax expense, plus (iii) depreciation expense, plus (iv) amortization expense, plus (v) stock-based compensation expenses, plus (vi) net unrealized gains and losses from foreign currency exchange transactions, plus (vii) net unrealized gains and losses from warrant revaluations, plus (viii) preferred stock or other “securities” classified as such pursuant to GAAP, in each case, calculated in accordance with GAAP.

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has total assets in excess of One Billion Dollars ($1,000,000,000), and in each case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, unless an Event of Default has occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a then-current direct competitor of Borrower, as determined by Collateral Agent.  Notwithstanding the foregoing, (x) in connection with any assignment by a Lender as a result of a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party providing such financing or formed to undertake such securitization transaction and any transferee of such Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall release such Lender from any of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral Agent reasonably shall require.

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made under the Code, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.

“Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral.

“Exit Fee Agreement” is that certain Exit Fee Agreement, dated as of the Effective Date, by and among Collateral Agent, as agent, Borrower and the Lenders, as amended, amended and restated, supplemented or otherwise modified from time to time.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code.

“FDA” means the U.S. Food and Drug Administration or any successor thereto or any other comparable Governmental Authority.

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“Fee Letter” means that certain Fee Letter dated as of the Effective Date, between Borrower and Solar, as amended and restated as of the Sixth Amendment Effective Date and as may be further amendedas amended, amended and restated, supplemented or otherwise modified from time to time.

“Fifth Amendment” means that certain Fifth Amendment to Loan and Security Agreement, dated as of the Fifth Amendment Effective Date, by and among Borrower, Collateral Agent and Lenders.

“Fifth Amendment Effective Date” means March 24, 2023.

“Fifth Amendment Exit Fee Agreement” is that certain Fifth Amendment Exit Fee Agreement, dated as of the Fifth Amendment Effective Date, by and among Collateral Agent, as agent, Borrower and the Lenders, as amended, amended and restated, supplemented or otherwise modified from time to time.

“Fifth Amendment Net Equity Proceeds” means the net cash proceeds (including not subject to any clawback, redemption, escrow or similar contractual restriction) received by Borrower from Borrower’s bona fide equity financings after March 17, 2023, but on or prior to the Fifth Amendment Effective Date.

“First Amendment Effective Date” means May 1, 2020.

“Foreign Subsidiary” is a Subsidiary that is not an entity organized under the laws of the United States or any state or territory thereof.

“Funding Date” is any date on which a Term Loan is made to or on account of Borrower which shall be a Business Day.

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination, in addition to Regulation S-X, with which Borrower must comply as a company that files reports with the U.S. Securities and Exchange Commission (the “SEC”).

“General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made under the Code, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body (including, without limitation, the FDA), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self‑regulatory organization.

“Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter in effect, of any Governmental Authority.

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent for the benefit of the Secured Parties (including without limitation pursuant to Section 6.10).  The Guarantor on the Effective Date is Alimera Sciences (DE), LLC.

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented. 

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“ILUVIEN” means fluocinolone acetonide intravitreal implants (marketed on the Effective Date as “ILUVIEN”).

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, (d) non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit, banker’s acceptance or similar instrument, (e) equity securities of such Person subject to repurchase or redemption other than at the sole option of such Person, (f) obligations secured by a Lien on any asset of such Person, whether or not such obligation is otherwise an obligation of such Person, (g) “earnouts,” purchase price adjustments, profit sharing arrangements, deferred purchase money DS

amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of Investments, (h) all Indebtedness of others guaranteed by such Person, (i) off-balance sheet liabilities and/or pension plan or multiemployer plan liabilities of such Person and (j) Contingent Obligations.  

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions or proceedings seeking reorganization, arrangement, or other relief.

“Insolvent” means not Solvent.

“Intellectual Property” means all of Borrower’s or any of its Subsidiaries’ right, title and interest in and to the following:

(a)its Copyrights, Trademarks and Patents;

(b)any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know‑how, operating manuals;

(c)any and all source code;

(d)any and all design rights which may be available to Borrower;

(e)any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

(f)all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

“Intellectual Property Security Agreement” means that certain Intellectual Property Security Agreement dated as of the Fifth Amendment Effective Date between Borrower and Collateral Agent, as the same may from time to time be amended, restated, modified or otherwise supplemented.

“Intercompany Subordination Agreement” means that certain Omnibus Intercompany Subordination Agreement, dated as of the date hereof, by and among Collateral Agent, Borrower, and each of Borrower’s Subsidiaries.

“Interest-Only Extension Conditions” is satisfaction of each of the following on or prior to April 20, 2025:  (a) no Event of Default shall have occurred and be continuing (including, for the avoidance of doubt, compliance with Section 7.13) as of April 20, 2025, and (b) Collateral Agent shall have received evidence satisfactory to Collateral Agent in its sole discretion that Borrower has achieved EBITDA on a trailing twelve (12) month basis, of greater than or equal to Seven Million Five Hundred Thousand Dollars ($7,500,000) on or prior to April 20, 2025.

“Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made under the Code, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

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“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

“Key Person” is each of Borrower’s (i) President and Chief Executive Officer, who is Rick Eiswirth as of the Fifth Amendment Effective Date, and (ii) Chief Financial Officer, who is Russell Skibsted as of the Fifth Amendment Effective Date.

“Knowledge,” “knowledge,” or “awareness” means the actual knowledge, after reasonable investigation, of the Responsible Officers.

“Lender” is any one of the Lenders.

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section 12.1.

“Lenders’ Expenses” are (a) all reasonable and documented audit fees and expenses, costs, and expenses (including reasonable and documented attorneys’ fees and expenses , as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating and administering the Loan Documents, in each case, actually incurred; provided, however, that such expenses shall not exceed One Hundred Fifty Thousand Dollars ($150,000) in the aggregate up to and including the Effective Date, and (b) all reasonable and documented fees and expenses (including reasonable and documented attorneys’ fees and expenses actually incurred, as well as appraisal fees, and fees incurred on account of lien searches, inspection fees, and filing fees) for defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents.

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

“Loan Documents” are, collectively, this Agreement, the Fee Letter, the Exit Fee Agreement, the Fifth Amendment Exit Fee Agreement, each Control Agreement, the Intellectual Property Security Agreement, the Perfection Certificates, each Compliance Certificate, the ACH Letter, each Loan Payment Request Form, any Guarantees, any subordination agreements (including the Intercompany Subordination Agreement), any note, or notes or guaranties executed by Borrower or any other Person, any agreements creating or perfecting rights in the Collateral (including all insurance certificates and endorsements, landlord consents and bailee consents) and any other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent, as applicable, in connection with this Agreement; all as amended, restated, or otherwise modified.

“Loan Payment Request Form” is that certain form attached hereto as Exhibit C.

“Material Adverse Change” is (a) a material adverse change in the business, operations or financial condition of Borrower and the Guarantors, when taken as a whole; or (b) a material impairment of (i) the ability of Borrower and its Subsidiaries (taken as a whole) to pay the Obligations, (ii) the legality, validity or enforceability of the Loan Documents (taken as a whole) or the rights and remedies (taken as a whole) of Collateral Agent or Lenders under the Loan Documents except as the result of the action or inaction of Collateral Agent or Lenders or (iii) the validity, perfection or priority of the Liens in favor of Collateral Agent for the benefit of the Secured Parties on the Collateral (taken as a whole) except as the result of the action or inaction of Collateral Agent or Lenders.

“Material Agreement” is any license, agreement or other contractual arrangement whereby Borrower or any of its Subsidiaries is reasonably likely to be required to transfer, either in-kind or in cash, prior to the Maturity Date, assets or property valued (book or market) at more than Seven Hundred Fifty Thousand Dollars ($750,000) during any calendar year.

“Maturity Date” is, for each Term Loan, May 1, 2028.

“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment Premium, all fees under the Fee Letter, the Exit Fee Agreement, the Fifth Amendment Exit Fee Agreement, and any other amounts Borrower owes Collateral Agent or the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent in connection with this Agreement and the other Loan Documents, and the performance of Borrower’s duties under the Loan Documents.

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“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Fifth Amendment Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, re-examination certificates, utility models, extensions and continuations-in-part of the same.

“Payment Date” is the first (1st) calendar day of each calendar month, commencing on January 1, 2020.

“Permitted Indebtedness” is:

(a)Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;

(b)Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate;

(c)Subordinated Debt;

(d)unsecured Indebtedness (A) owed to trade creditors in the ordinary course of business, and (B) in connection with credit cards incurred in the ordinary course of business in an aggregate amount with respect to this subclause (B) not to exceed One Hundred Thousand Dollars ($100,000);

(e)Indebtedness consisting of (i) capitalized lease obligations (excluding Vehicle Leases) and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (A) the aggregate outstanding principal amount of all such Indebtedness does not exceed Five Hundred Thousand Dollars ($500,000) at any time and (B) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made), (ii) Vehicle Leases and (iii) rebates, discounts and chargebacks that Borrower or its Subsidiaries may pay in the ordinary course of business to direct or indirect customers; 

(f)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business;

(g)Indebtedness constituting Permitted Investments owing by a Subsidiary to another Subsidiary or to Borrower;

(h)Contingent Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions permitted under Section 7.1;

(i)Indebtedness to any current employee, officer, director or independent contractor (or such Person’s spouse, estate or estate planning vehicle) to repurchase Borrower’s common stock or options or rights to acquire common stock of Borrower from such Person upon the death, disability termination of employment or retirement of such employee, officer, director or independent contractor;

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(j)Other unsecured Indebtedness in an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) outstanding at any time;

(k)Indebtedness in favor of insurance companies (or financing affiliates) in connection with the financing of insurance premiums in the ordinary course of business in an aggregate amount not to exceed Seven Hundred Fifty Thousand Dollars ($750,000);

(l)Guarantees of the Indebtedness by any Subsidiary of the Indebtedness of another Subsidiary or Borrower and guarantees of Indebtedness of Borrower or any Guarantor by Borrower or any of its Subsidiaries;

(m)(i) Indebtedness not exceeding Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate at any time in respect of bid, performance, appeal, or surety bonds issued for the account of Borrower or any Subsidiary in the ordinary course of business and (ii) Indebtedness in respect of surety and other obligations incurred in the ordinary course of business in connection with workers’ compensation, social security, unemployment insurance, and other social security legislation;

(n)Indebtedness not exceeding Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate at any time in respect of (i) netting services or overdraft protection or (ii) from any arrangement relating to the provision of treasury, depositary or cash management services or automated clearinghouse transfer of funds, in each case incurred in the ordinary course of business; and

(o)extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness described in clauses (a) through (n) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case may be.

“Permitted Investments” are:

(a)Investments disclosed on the Perfection Certificate and existing on the Effective Date;

(b)(i) Investments consisting of cash and Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral Agent;

(c)Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;

(d)Investments consisting of Deposit Accounts of Borrowers and Guarantors in Collateral Accounts in which Collateral Agent has a perfected Lien (subject to the terms of this Agreement) for the ratable benefit of the Secured Parties and Investments consisting of Deposit Accounts, Securities Accounts and Commodity Accounts which are not Collateral Accounts;

(e)Investments in connection with Transfers permitted by Section 7.1;

(f)Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors; not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate for (i) and (ii) in any fiscal year;

(g)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

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(h)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary;

(i)Other Investments not to exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year;

(j)Investments in Subsidiaries, not to exceed (x) in any fiscal year, One Million Dollars ($1,000,000) minus the sum of all payments made pursuant to clause (i) of Section 4(a) of the Intercompany Subordination Agreement in such fiscal year plus (y) during the term of this Agreement, an aggregate amount not to exceed five percent (5%) of the net cash proceeds (including not subject to any clawback, redemption, escrow or similar contractual restriction) received by Borrower after the Effective Date from all bona fide equity financings on terms reasonably acceptable to Collateral Agent and the Lenders;

(k)Investments by Borrower or any Guarantor in a Guarantor or Borrower;

(l)Investments by any Subsidiary that is not a Borrower or a Guarantor in any other Subsidiary, in any Guarantor or in Borrower; and

(m)non-cash Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non‑exclusive licensing of technology, the development of technology or the providing of technical support.

 “Permitted Licenses” are (A) licenses of over-the-counter software that is commercially available to the public; (B) non‑exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of business, provided that, with respect to each such license described in clause (B), the license constitutes an arm’s‑length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property; and (C) (i) non-exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries between or among Borrower and any Subsidiary or Subsidiaries or between or among any Subsidiaries, (ii) exclusive licenses for the use of Intellectual Property of Borrower between Borrower and ASCV, and (iii) that certain Exclusive License Agreement, dated as of April 14, 2021, by and between Borrower and Ocumension (Hong Kong) Limited, a company organized and existing under the laws of Hong Kong. 

“Permitted Liens” are:

(a)Liens existing on the Effective Date and disclosed on the Perfection Certificate or arising under this Agreement and the other Loan Documents;

(b)Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code and the Treasury Regulations adopted thereunder in excess of Two Hundred Fifty Thousand Dollars ($250,000);

(c)Liens securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that (i) such liens exist prior to the acquisition of, or attach substantially simultaneous with, or within forty-five (45) days after, the acquisition, lease, repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness;

(d)Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business which have not been, and are not, subordinated to the Obligations or waived by such carriers, warehousemen, suppliers or Persons so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000), and which are not

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delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

(e)Liens to secure payment of workers’ compensation, employment insurance, old‑age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

(f)Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;

(g)leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non‑exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest therein;

(h)banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6(a) hereof;

(i)Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.3 or 8.6;

(j)Permitted Licenses;

(k)Liens on premium refunds granted in favor of insurance companies (or their financing affiliates) in connection with the financing of insurance premiums to the extent such financing is Permitted Indebtedness;

(l)Liens under Vehicle Leases;

(m)any rent deposit guarantee arrangements that are entered into by a Foreign Subsidiary in the ordinary course of its business and consistent with past practices; and

(n)any Lien arising under the general terms and conditions of banks with whom any Foreign Subsidiary maintains a banking relationship in the ordinary course of business, including any which arise from the general banking conditions or any Lien arising under the general terms and conditions of banks.

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

“Prepayment Premium” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:

(i)for a prepayment made on or after the Fifth Amendment Effective Date through and including the first anniversary of the Fifth Amendment Effective Date, two percent (2.00%) of the principal amount of such Term Loan prepaid;

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(ii)for a prepayment made after the date which is after the first anniversary of the Fifth Amendment Effective Date through and including the second anniversary of the Fifth Amendment Effective Date, one percent (1.00%) of the principal amount of the Term Loan prepaid; and

(iii)for a prepayment made after the date which is after the second anniversary of the Fifth Amendment Effective Date and prior to the Maturity Date, half of one percent (0.50%) of the principal amount of the Term Loan prepaid.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term Loans.

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made under the Code.

“Qualified Cash A/P Amount” means the amount of Borrower’s accounts payable that have not been paid within ninety days (90) days from the invoice date of the relevant account payable.

“Registration” means any registration, authorization, approval, license, permit, clearance, certificate, and exemption issued or allowed by the FDA or state pharmacy licensing authorities (including, without limitation, new drug applications, abbreviated new drug applications, biologics license applications, investigational new drug applications, over-the-counter drug monograph, device pre-market approval applications, device pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals, registrations and authorizations, CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent, controlled substance registrations, and wholesale distributor permits).

“Regulatory Action” means an administrative, regulatory, or judicial enforcement action, proceeding, investigation or inspection, FDA Form 483 notice of inspectional observation, warning letter, untitled letter, other notice of violation letter, recall, seizure, Section 305 notice or other similar written communication, injunction or consent decree, issued by the FDA or a federal or state court.

“Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its Affiliates.

“Relevant Governmental Body” means the Federal Reserve Board, the Federal Reserve Bank of New York, and/or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor thereto.

“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Fifth Amendment Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their Term Loan other than to an Affiliate of such Lender, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least 50.1% of the aggregate outstanding principal balance of the Term Loan.

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” is any of the President, Chief Executive Officer or Chief Financial Officer of Borrower acting alone.

“Second Amendment Effective Date” means February 1, 2021.

“Second Draw Period” is the period (i) commencing on the date that Borrower delivers evidence reasonably satisfactory to Collateral Agent that Borrower has achieved revenues (under GAAP) from sales of ILUVIEN in the

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ordinary course of business to third party customers of at least Thirty Million Dollars ($30,000,000) on a trailing six-month basis measured at any time on or before November 30, 2020 and (ii) ending on December 20, 2020.

“Secured Parties” means Collateral Agent and the Lenders.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made under the Code.

“Sixth Amendment” means that certain Sixth Amendment to Loan and Security Agreement, dated as of the Sixth Amendment Effective Date, by and among Borrower, Collateral Agent and Lenders.

“Sixth Amendment Effective Date” means May 17, 2023.

“Sixth Amendment Net Equity Proceeds” means the unrestricted (including not subject to any clawback, redemption, escrow or similar contractual restriction) net cash proceeds received by Borrower from Borrower’s bona fide equity financings after May 1, 2023, but on or prior to the Sixth Amendment Effective Date.

“SOFR” means the daily Secured Overnight Financing Rate provided by the Federal Reserve Bank of New York as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

“Solvent” means, with respect to any Person, that (a) the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities, (b) such Person is not left with unreasonably small capital giving effect to the transactions contemplated by this Agreement and the other Loan Documents, and (c) such Person is able to pay its debts (including trade debts) as they mature in the ordinary course (without taking into account any forbearance and extensions related thereto).

“Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Required Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Required Lenders in their reasonable discretion; provided, however, that Vehicle Leases shall not be deemed to constitute Subordinated Debt.

“Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on Schedule 1.1.  “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

“Trademarks” means any trademark and service mark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower and each of its Subsidiaries connected with and symbolized by such trademarks.

“Unqualified Opinion” means an opinion on financial statements from Grant Thornton LLP or another independent certified public accounting firm selected by Borrower in accordance with applicable rules of the SEC, which opinion shall not include any qualifications or any going concern limitations, other than with respect to a going concern based solely on the amount of cash and cash equivalents held by Borrower and its Subsidiaries.

“Vehicle Leases” means any leases for vehicles under any agreement to which Borrower or any of its Subsidiaries is a party, including but not limited to leases pursuant to that certain Master Equity Lease Agreement dated as of November 7, 2014, by and between Enterprise FM Trust and Borrower, as such may be modified or amended, whether or not such leases are characterized as capital leases or operating leases.

2.LOANS AND TERMS OF PAYMENT

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2.1Promise to Pay.  Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.

2.2Term Loans.

(a)Availability. 

(i)Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term loans to Borrower on the Effective Date in an aggregate principal amount of Forty-Two Million Five Hundred Thousand Dollars ($42,500,000) according to each Lender’s Term A Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as the “Term A Loan”).  After repayment, no Term A Loan may be re‑borrowed.

(ii)Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term loans to Borrower during the Second Draw Period in an aggregate principal amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000) according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans made during the Second Draw Period are hereinafter referred to singly as the “Term B Loan”).  After repayment, no Term B Loan may be re‑borrowed.

(iii)Subject to the terms and conditions of this Agreement and the Fifth Amendment, the Lenders agree, severally and not jointly, to make term loans to Borrower on the Fifth Amendment Effective Date in an aggregate principal amount of up to Two Million Five Hundred Thousand Dollars ($2,500,000) according to each Lender’s Term C Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as the “Term C Loan”).  After repayment, no Term C Loan may be re‑borrowed.

(iv)Subject to the terms and conditions of this Agreement and the Sixth Amendment, the Lenders agree, severally and not jointly, to make loans to Borrower on the Sixth Amendment Effective Date, in an aggregate principal amount of up to Twenty Million Dollars ($20,000,000) according to each Lender’s Term D Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as the “Term D Loan”; each Term A Loan, Term B Loan, Term C Loan, and Term D Loan arehereinafter referred to collectively as the “Term Loans”).  After repayment, no Term D Loan may be re‑borrowed.

(b)Repayment.  Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date.  Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall (i) make monthly payments of interest to each Lender in accordance with its Pro Rata Share, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error), based upon the effective rate of interest applicable to the Term Loan, as determined in accordance with Section 2.3(a) plus (ii) make consecutive equal monthly payments of principal to each Lender in accordance with its Pro Rata Share, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (A) the respective principal amounts of each such Lender’s Term Loans then outstanding and (B) a repayment schedule equal to the number of months remaining through the Maturity Date.  All unpaid principal and accrued and unpaid interest with respect to each such Term Loan is due and payable in full on the Maturity Date.  The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).

(c)Mandatory Prepayments.  If the Term Loans are accelerated following the occurrence  of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (ii) any fees payable under the Fee Letter as a result of such prepayment, (iii) the Prepayment Premium, plus (iv) all other Obligations that are then due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. Notwithstanding (but without duplication of) the foregoing, on the Maturity Date, if any fees payable under the Fee Letter as a result of such prepayments had not previously been paid in full in connection with the prepayment of the Term Loans in full,

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Borrower shall pay to each Lender such unpaid fees in accordance with the terms of the Fee Letter.  The Prepayment Premium shall also be payable in the event the Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means. EACH BORROWER AND GUARANTOR EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION.

(d)Permitted Prepayment of Term Loans.  Borrower shall have the option to prepay not less than Two Million Five Hundred Thousand Dollars ($2,500,000) of the outstanding principal balance of the Term Loans advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least five (5) Business Days prior to such prepayment, which notice shall specify the amount to be prepaid, and (ii) pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) the outstanding principal of the Term Loans (or, if so specified in the written notice, a lesser amount not less than Two Million Five Hundred Thousand Dollars ($2,500,000) of the outstanding principal balance of the Term Loans) plus accrued and unpaid interest thereon through the prepayment date, (B) any fees payable under the Fee Letter, the Fifth Amendment Exit Fee Letter, the Exit Fee Letter,  or under Section 2.4 hereof as a result of such prepayment, (C) the Prepayment Premium, plus (D) all other Obligations that are due and payable on such prepayment date, including any Lenders’ Expenses and interest at the Default Rate (if any) with respect to any past-due amounts.

2.3Payment of Interest on the Term Loans.

(a)Interest Rate.  Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a floating per annum rate equal to the Applicable Rate in effect from time to time plus five and fifteen hundredth percent (5.15%), which aggregate interest rate shall be determined by Collateral Agent on the third Business Day prior to the Funding Date of the applicable Term Loan and on the date occurring on the first Business Day of the month prior to each Payment Date occurring thereafter, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e).  Except as set forth in Section 2.2(b), such interest shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full (or any payment is made hereunder).

(b)Default Rate.  Immediately upon the occurrence and during the continuance of an Event of Default, all Obligations shall accrue interest at a fixed per annum rate equal to the rate that is otherwise applicable thereto plus three percentage points (3.00%) (the “Default Rate”).  Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.

(c)360‑Day Year.  Interest shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.

(d)Debit of Accounts.  Collateral Agent and each Lender may debit (or ACH) the Designated Deposit Account for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when due.  Any such debits (or ACH activity) shall not constitute a set‑off.

(e)Payments.  Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to the respective Lender to which such payments are owed, at such Person’s office in immediately available funds on the date specified herein.  Unless otherwise provided, interest is payable monthly on the Payment Date of each month.  Payments of principal and/or interest received after 2:00 p.m. Eastern time are considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue until paid.  All payments to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set‑off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.  Collateral Agent may at its discretion and with prior notice of at least one (1) Business Day, initiate debit entries to

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Borrower’s account as authorized on the ACH Letter (i) on each payment date of all Obligations then due and owing, (ii) at any time any payment due and owing with respect to Lenders’ Expenses, and (iii) upon an Event of Default, any other Obligations outstanding.

2.4Fees.  Borrower shall pay to Collateral Agent and/or Lenders (as applicable) the following fees, which shall be deemed fully earned and non-refundable upon payment:

(a)Fee Letter.  When due and payable under the terms of the Fee Letter, to Collateral Agent and each Lender, as applicable, the fees set forth in the Fee Letter;

(b)Prepayment Premium.  The Prepayment Premium, if any, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares;

(c)Lenders’ Expenses.  All Lenders’ Expenses (including reasonable and documented attorneys’ fees and expenses for documentation and negotiation of this Agreement), when due; provided that Collateral Agent acknowledges receipt of a due diligence deposit of One Hundred Thousand Dollars ($100,000) on or before the Effective Date, which shall be credited towards payment of such Lenders’ Expenses.

2.5Taxes; Increased Costs.

(a)Any and all payments received by Collateral Agent or the Lenders from Borrower hereunder will be made free and clear of and without deduction for any and all present or future income, excise, stamp, court or documentary, intangible, recording, filing or similar taxes, property or franchise taxes, and any other present or futuretaxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto) (“Taxes”).  “Indemnified Taxes” means Taxes excluding (i) Taxes imposed on or measured by any Lender’s net income (however denominated), franchise Taxes and branch profits Taxes or any similar Tax, in each case (A) imposed as a result of such Lender being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (B) that are Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Term Loan or Loan Document), (ii) in the case of any Lender, U.S. federal withholding Tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement or acquires an interest in a Term Loan or changes its lending office, except in each case to the extent that, pursuant to this Section 2.5, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) U.S. federal withholding Taxes imposed under FATCA, and (iv) Taxes attributable to a Lender’s failure to comply with Section 2.5(e).  If any applicable law requires Borrower or, if applicable, Collateral Agent to make any withholding or deduction in respect of Indemnified Taxes from any such payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction (and including any such withholdings and deductions applicable to additional sums payable under this Section), Collateral Agent or each Lender, as applicable, receives a net sum equal to the sum which it would have received had no withholding or deduction been required.  Borrower or, if applicable, Collateral Agent shall pay the full amount required to be withheld or deducted in respect of any Taxes to the relevant Governmental Authority.  Borrower will, as soon as practicable after any payment of Taxes pursuant to this Section 2.5, furnish Collateral Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence reasonably satisfactory to Collateral Agent indicating that Borrower has made such withholding payment.

(b)Borrower and each Guarantor shall jointly and severally indemnify Collateral Agent and each Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.5) payable or paid by Collateral Agent or such Lender or required to be withheld or deducted from a payment to Collateral Agent or such

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Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Borrower by a Lender (with a copy to Collateral Agent), or by Collateral Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(c)If any change in applicable law shall subject any Lender to any Taxes (other than Indemnified Taxes) on its loans, loan principal, letters of credit, commitments, or other Obligations, or its deposits, reserves, other liabilities or capital attributable thereto, and the result shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any loan, or to increase the cost to such Lender of participating in, issuing or maintaining any letter of credit (or maintaining its obligation to participate in or to issue any letter of credit), or to reduce the amount of any sum received or receivable by such Lender (whether principal, interest or any other amount), then, upon the request of such Lender, Borrower will promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(d)Each Lender shall severally indemnify Collateral Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that Borrower and each Guarantor has not already indemnified Collateral Agent for such Indemnified Taxes and without limiting the obligation of Borrower and each Guarantor to do so) and (ii) any Taxes set forth in Section 2.5(a)(i), (a)(ii), (a)(iii), and (a)(iv) attributable to such Lender, in each case, that are payable or paid by Collateral Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by Collateral Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes Collateral Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by Collateral Agent to the Lender from any other source against any amount due to Collateral Agent under this Section 2.5(d).

(e)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrower and Collateral Agent, at the time or times reasonably requested by Borrower or Collateral Agent, such properly completed and executed documentation reasonably requested by Borrower or Collateral Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by Borrower or Collateral Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower or Collateral Agent as will enable Borrower or Collateral Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than an IRS Form W-9 or applicable IRS Form W-8, as applicable) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(f)Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

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(g)The agreements and obligations contained in this Section 2.5 shall survive the resignation or replacement of Collateral Agent, any assignment of rights by, or the replacement of, a Lender and the termination of this Agreement.

2.6Secured Promissory Notes.  If requested by a Lender, the Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit G hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement.  Borrower irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment.  The outstanding amount of each Term Loan set forth on such Lender’s Secured Promissory Note Record shall be, absent manifest error, prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan Document to make payments of principal of or interest on any Secured Promissory Note when due.  Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.

3.CONDITIONS OF LOANS

3.1Conditions Precedent to Initial Term Loan.  Each Lender’s obligation to make a Term Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:

(a)original Loan Documents (including but not limited to a duly executed Fee Letter and Exit Fee Agreement), each duly executed by Borrower and each Subsidiary, as applicable;

(b)a completed Perfection Certificate for Borrower;

(c)duly executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any Guarantor;

(d)the Operating Documents and good standing certificates: (i) of Borrower and its domestic Subsidiaries certified by the Secretary of State (or equivalent agency) of Borrower’s and such domestic Subsidiaries’ state of organization or formation; (ii) of Borrower to qualify to conduct business in the State of Georgia certified by the Secretary of State of Georgia; and (iii) of Borrower and each domestic Subsidiary certified by the Secretary of State (or equivalent agency) of any other state where the failure to qualify to conduct business could reasonably be expected to have a Material Adverse Change, each as of a date no earlier than thirty (30) days prior to the Effective Date;

(e)a certificate of Borrower and each Guarantor in substantially the form of Exhibit E hereto executed by the Secretary of Borrower with appropriate insertions and attachments, including with respect to (i) the Operating Documents of Borrower and each Guarantor (which Certificate/Articles of Incorporation/Organization of Borrower and each Guarantor shall be certified by the Secretary of State (or equivalent agency) of the state of Borrower and such Guarantor’s respective state of incorporation or organization) and (ii) the resolutions adopted by Borrower’s and each Guarantor’s board of directors for the purpose of approving the transactions contemplated by the Loan Documents;

(f)certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the Term Loan, will be terminated or released;

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(g)a duly executed legal opinion of counsel to Borrower and each domestic Guarantor dated as of the Effective Date;

(h)evidence satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Secured Parties;

(i)a copy of any applicable Investors Rights Agreement and any amendments thereto/joinders, etc.;

(j)a subordination agreement, duly executed by each holder of Subordinated Debt;

(k)payoff letter for existing debt satisfactory to Collateral Agent; and

(l)payment of the fees payable under the terms of the Fee Letter and Lenders’ Expenses then due as specified in Section 2.4 hereof.

3.2Conditions Precedent to all Term Loans.  The obligation of each Lender to extend each Term Loan is subject to the following conditions precedent:

(a)receipt by Collateral Agent of an executed Loan Payment Request Form in the form of Exhibit C attached hereto;

(b)the representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the Funding Date of each Term Loan; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the funding of such Term Loan;

(c)in such Lender’s reasonable discretion, there has not been any Material Adverse Change;

(d)No Event of Default or an event that with the passage of time could result in an Event of Default, shall exist; and

(e)payment of the fees and Lenders’ Expenses then due as specified in Section 2.4 hereof.

3.3Conditions Precedent to Term Loans on Fifth Amendment Effective Date. The obligation of each Lender to extend the Term Loans on the Fifth Amendment Effective Date is subject to the following conditions precedent:

(a)a duly executed Fifth Amendment by Borrower, with original signature pages thereto to promptly follow;

(b)a duly executed Amended and Restated Fee Letter;

(c)an updated Perfection Certificate for Borrower and each of its Subsidiaries;

(d)a duly executed Fifth Amendment Exit Fee Agreement;

(e)[reserved];

(f)a duly executed Intellectual Property Security Agreement by Borrower;

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(g)[reserved];

(h)the Operating Documents and good standing certificates of Borrower certified by the Secretary of State (or equivalent agency) of Borrower’s jurisdiction of organization or formation and each jurisdiction in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Fifth Amendment Effective Date;

(i)a certificate of Borrower in form and substance reasonably satisfactory to the Collateral Agent executed by the Secretary (or similar officer) of Borrower with appropriate insertions and attachments, including with respect to (i) the Operating Documents of Borrower (which Certificate of Incorporation of Borrower shall be certified by the Secretary of State of the State of such entity’s jurisdiction of formation) and (ii) the resolutions adopted by Borrower’s board of directors or a committee thereof for the purpose of approving the transactions contemplated by the Fifth Amendment;

(j)certified copies, dated as of date no earlier than thirty (30) days prior to the Fifth Amendment Effective Date, of financing statement searches, as Collateral Agent shall request;

(k)a duly executed legal opinion of counsel to Borrower dated as of the Fifth Amendment Effective Date; and

(l)payment of the fees and Lenders’ Expenses then due as specified in Section 3 of the Fifth Amendment.

3.4Conditions Precedent to Term C Loans on Fifth Amendment Effective Date. The obligation of each Lender to extend the Term C Loan is subject to the following conditions precedent:

(a)Evidence, reasonably satisfactory to each Lender, of Borrower’s receipt of no less than Ten Million Dollars ($10,000,000) in Fifth Amendment Net Equity Proceeds.

3.5Conditions Precedent to Term D Loans on Sixth Amendment Effective Date. The obligation of each Lender to extend the Term D Loans on the Sixth Amendment Effective Date is subject to the following conditions precedent:

(a)a duly executed Sixth Amendment by Borrower, with original signature pages thereto to promptly follow;

(b)a duly executed Second Amended and Restated Fee Letter by Borrower and each Lender;

(c)evidence, reasonably satisfactory to each Lender, of Borrower’s receipt of no less than Sixty Nine Million Dollars ($69,000,000) in Sixth Amendment Net Equity Proceeds;

(d)a duly executed Omnibus Amendment to Exit Fee Agreements, by Borrower and each Lender;

(e)[reserved];

(f)an updated Perfection Certificate for Borrower and each of its Subsidiaries;

(g)the Operating Documents and good standing certificates of Borrower certified by the Secretary of State (or equivalent agency) of Borrower’s jurisdiction of organization or formation and each jurisdiction in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Sixth Amendment Effective Date;

(h)a certificate of Borrower in form and substance reasonably satisfactory to the Collateral Agent executed by the Secretary (or similar officer) of Borrower with appropriate insertions and attachments,

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including with respect to (i) the Operating Documents of Borrower (which Certificate of Incorporation of Borrower shall be certified by the Secretary of State of the State of such entity’s jurisdiction of formation) and (ii) the resolutions adopted by Borrower’s board of directors or a committee thereof for the purpose of approving the transactions contemplated by the Sixth Amendment;

(i)[reserved];

(j)payment of the fees and Lenders’ Expenses then due as specified in Section 3 of the Sixth Amendment.

3.6Post-Close Requirements.  Borrower agrees that within 30 days of the Effective Date, Borrower shall deliver to Collateral Agent:

(a)a bailee waiver for that certain location owned by Alliance Medical Products (dba Siegfried Irvine), commonly known as 9342 Jeronimo Road, Irvine, CA 92618, in form and substance reasonably satisfactory to Collateral Agent;

(b)a landlord consent for that certain location commonly known as 6120 Windward Pkwy, Ste. 290, Alpharetta, GA 30005, in form and substance reasonably satisfactory to Collateral Agent;

(c)evidence in form and substance reasonably satisfactory to Collateral Agent of full release of that certain tax lien imposed by Fulton County, Georgia with respect to property located at 6120 Windward Pkwy, Alpharetta, GA 30005;

(d)evidence in form and substance reasonably satisfactory to Collateral Agent of all filings or recordations with the United States Patent and Trademark Office evidencing full release of all filings or recordations of any intellectual property security agreement, as amended, made by Borrower in favor of Silicon Valley Bank; and

(e)evidence in form and substance reasonably satisfactory to Collateral Agent that the insurance endorsements in favor of Collateral Agent, for the ratable benefit of the Secured Parties, required by Section 6.5 hereof are in full force and effect.

3.7Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to Collateral Agent under this Agreement as a condition precedent to any Term Loan.  Borrower expressly agrees that a Term Loan made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such item, and any such Term Loan in the absence of a required item shall be made in each Lender’s sole discretion.

3.8Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan (other than the Term Loan funded on the Effective Date), Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon New York City time three (3) Business Days prior to the date any Term Loan is to be made.  Together with any such electronic, facsimile or telephonic notification, Borrower shall deliver to Collateral Agent by electronic mail or facsimile a completed Loan Payment Request Form executed by a Responsible Officer or his or her designee.  Collateral Agent may rely on any telephone notice given by a person whom Collateral Agent reasonably believes is a Responsible Officer or designee.  On the Funding Date related to any Term Loan, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account, an amount equal to its Term Loan Commitment in respect of such Term Loan.

4.CREATION OF SECURITY INTEREST

4.1Grant of Security Interest.  Borrower hereby grants Collateral Agent, for the ratable benefit of the Secured Parties, to secure the payment and performance in full of all of the Obligations, a continuing first priority security interest in, and pledges to Collateral Agent, for the ratable benefit of the Secured Parties, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products and supporting

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obligations (as defined in the Code) in respect thereof.  If Borrower shall acquire any commercial tort claim (as defined in the Code) it intends to pursue, Borrower shall grant to Collateral Agent, for the ratable benefit of the Secured Parties, a first priority security interest therein and in the proceeds and products and supporting obligations (as defined in the Code) thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to extend Term Loans has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.

4.2Authorization to File Financing Statements.  Borrower hereby authorizes Collateral Agent to file financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral (held for the ratable benefit of the Secured Parties), without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents.

5.REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Collateral Agent and the Lenders as follows:

5.1Due Organization, Authorization: Power and Authority.  Borrower and each of its Subsidiaries is duly existing and in good standing as a Registered Organization (or the equivalent under applicable law with respect to Foreign Subsidiaries) in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing  (or the analogous status under applicable foreign law) in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be so qualified except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.  In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate and any updates or supplements thereto on, before or after the Effective Date (each a “Perfection Certificate” and collectively, the “Perfection Certificates”).  Borrower represents and warrants that all the information set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries is accurate and complete.

The execution, delivery and performance by Borrower and each Guarantor of the Loan Documents to which it is, or they are, a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Guarantor’s organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable material order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Guarantor, or any of its property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower, any Guarantor or any of their respective properties, is bound, the termination or noncompliance with which could reasonably be expected to have a Material Adverse Change.  Neither Borrower nor any of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Change.

5.2Collateral.

(a)Borrower and each Guarantor has good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower nor any Guarantor has any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered to Collateral Agent in connection herewith in respect of which Borrower or such Guarantor has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security interest therein as required under this Agreement.  To the Knowledge of the Responsible Officers, the Accounts are bona fide, existing obligations of the Account Debtors.

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(b)The security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to involuntary Permitted Liens that, under applicable law, have priority over Collateral Agent’s Lien. 

(c)On the Fifth Amendment Effective Date, and except as disclosed on the Perfection Certificate (i) the Collateral is not in the possession of any third party bailee, and (ii) no such third party bailee possesses components of the Collateral in excess of Two Hundred Fifty Thousand Dollars ($250,000) individually and One Million Dollars ($1,000,000) for all such locations.

(d)All Inventory and Equipment is in all material respects of good and marketable quality, free from material defects.

(e)Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of all Liens other than Permitted Liens.  Except as noted on the Perfection Certificate (which, upon the consummation of a transaction not prohibited by this Agreement, may be updated to reflect such transaction), neither Borrower nor any of its Subsidiaries is a party to, nor is bound by, any Material Agreement. 

5.3Litigation.  Except as disclosed on the Perfection Certificate, there are no actions, suits, investigations, or proceedings pending or, to the Knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than Two Hundred Fifty Thousand Dollars ($250,000).

5.4No Material Adverse Change; Financial Statements.  All consolidated financial statements for Borrower and its consolidated Subsidiaries delivered to Collateral Agent fairly present, in conformity with GAAP and in all material respects, the consolidated financial condition of Borrower and its consolidated Subsidiaries, and the consolidated results of operations of Borrower and its consolidated Subsidiaries.  Since December 31, 2016, there has not been a Material Adverse Change.

5.5Solvency.  Borrower is Solvent.  Borrower and each of its Subsidiaries, when taken as a whole, is Solvent. 

5.6Regulatory Compliance.  Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act.  Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005.  Neither Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change.  Neither Borrower’s nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s Knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws, the violation of which could reasonably be expected to cause a Material Adverse Change.  Borrower and each of its Subsidiaries has obtained all material consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti‑Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti‑Terrorism Law, or (iii) is a Blocked Person.  None of Borrower, any of its Subsidiaries, or to the Knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise

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engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti‑Terrorism Law.

5.7Investments.  Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for Permitted Investments.

5.8Tax Returns and Payments; Pension Contributions.  Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower and each of its Subsidiaries has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions shown on such returns and reports as owed by Borrower and such Subsidiaries in an amount greater than Two Hundred Fifty Thousand Dollars ($250,000), in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the procedure set forth in Section 6.4.  Neither Borrower nor any of its Subsidiaries is aware of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’ prior tax years which could result in additional taxes becoming due and payable by Borrower or its Subsidiaries in an amount greater than Two Hundred Fifty Thousand Dollars ($250,000).  Borrower and each of its Subsidiaries has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with applicable law, and neither Borrower nor any of its Subsidiaries has withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower or its Subsidiaries greater than Two Hundred Fifty Thousand Dollars ($250,000), including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

5.9Use of Proceeds.  Borrower shall use the proceeds of the Term Loans: (i) to repay indebtedness to Solar and its Affiliates existing on the Effective Date immediately prior to the funding of the Term Loans under this Agreement, (ii) as working capital, (iii) to fund its general business requirements, (iv) to pay certain fees and expenses owing to Collateral Agent in connection with the consummation of the transactions contemplated pursuant to the Fifth Amendment and Sixth Amendment and (v) to fund a portion of the consideration payable by Borrower pursuant to that certain Product Rights Agreement, dated as of May 17, 2023, by and between EyePoint Pharmaceuticals, Inc. and Borrower, and not for personal, family, household or agricultural purposes.

5.10Full Disclosure.  No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate or written statement, when taken as a whole, given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not materially misleading in light of the circumstances in which they were made (it being recognized that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions at the time they were made are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

6.AFFIRMATIVE COVENANTS

Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:

6.1Government Compliance.

(a)Other than specifically permitted hereunder, maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change.  Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to have a Material Adverse Change.

(b)Obtain and keep in full force and effect, all of the material Governmental Approvals necessary for (a) the performance by Borrower and its Subsidiaries of their respective businesses and (b) the performance by Borrower and any Guarantor of their respective obligations under the Loan Documents and the grant of a security interest to Collateral Agent for the ratable benefit of the Secured Parties, in all of the Collateral. 

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6.2Financial Statements, Reports, Certificates; Notices.

(a)Deliver to Collateral Agent:

(i)as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and, if prepared by Borrower or if reasonably requested by the Lenders, consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its consolidated Subsidiaries for such month, certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent;

(ii)(A) as soon as available, but no later than ninety (90) days after the last day of Borrower’s fiscal year or within five (5) days of filing of the same with the SEC, audited consolidated financial statements covering the consolidated operations of Borrower and its consolidated Subsidiaries for such fiscal year, prepared under GAAP, consistently applied, together with an Unqualified Opinion on the financial statements, and (B) along with the delivery of the financial statements under clause (B) of this Section 6.2(a)(ii), an updated Perfection Certificate of Borrower to reflect any amendments, modifications and updates, if any, in the Perfection Certificate after the Effective Date;

(iii)as soon as available after approval thereof by Borrower’s board of directors, but no later than the earlier of (x) fifteen (15) days’ after such approval and (y) February 28 of such year, Borrower’s annual financial projections for the entire current fiscal year as approved by Borrower’s board of directors; provided that any revisions to such projections approved by Borrower’s board of directors shall be delivered to Collateral Agent and the Lenders no later than seven (7) days after such approval; provided further that, notwithstanding the foregoing, Borrower shall deliver the board-approved annual financial projections for fiscal year 2021 to Collateral Agent and the Lenders no later than April 1, 2021;

(iv)within five (5) days of delivery, copies of all non-ministerial statements, reports and notices made available to Borrower’s security holders or holders of Subordinated Debt (other than materials provided to members of Borrower’s board of directors solely in their capacities as security holder or holders of Subordinated Debt);

(v)within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K with the SEC;

(vi)together with the Compliance Certificate, notice of any amendments to the respective Operating Documents of Borrower or any of its Subsidiaries, in each case together with any copies reflecting such amendments or changes with respect thereto;

(vii)as soon as available, but no later than thirty (30) days after the last day of each month, copies of the month‑end account statements for each Collateral Account maintained by Borrower or its Subsidiaries, which statements may be provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s);

(viii)prompt delivery of (and in any event within five (5) days after the same are sent or received) copies of all material correspondence, reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals material to Borrower’s business or that otherwise could reasonably be expected to have a Material Adverse Change;

(ix)prompt notice of any event that, to the Knowledge of the Responsible Officers, (A) could reasonably be expected to materially and adversely affect the value of the Intellectual Property or (B) could reasonably be expected to result in a Material Adverse Change;

(x)written notice delivered at least ten (10) days’ prior to Borrower’s creation of a New Subsidiary in accordance with the terms of Section 6.10);

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(xi)written notice delivered at least fifteen (15) days’ prior to Borrower’s (A) adding any new offices or business locations, including warehouses (unless such new offices or business locations contain less than One Hundred Thousand Dollars ($100,000) in assets or property of Borrower or any of its Subsidiaries), (B) changing its respective jurisdiction of organization, (C) changing its organizational structure or type, (D) changing its respective legal name, or (E) changing any organizational number(s) (if any) assigned by its respective jurisdiction of organization;

(xii)upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, prompt (and in any event within three (3) Business Days) written notice of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, and Borrower’s proposal regarding how to cure such Event of Default or event;

(xiii)immediate notice if Borrower or such Subsidiary has Knowledge that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering;

(xiv)notice of any commercial tort claim (as defined in the Code) or letter of credit rights (as defined in the Code) held by Borrower or any Guarantor which it intends to pursue, in each case in an amount greater than One Hundred Fifty Thousand Dollars ($150,000) and of the general details thereof;

(xv)if Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes one, written notice of such occurrence and information regarding such Person’s organizational identification number within seven (7) Business Days of receiving such organizational identification number; and

(xvi)other information as reasonably requested by Collateral Agent or any Lender. 

Notwithstanding the foregoing, documents and notices required to be delivered pursuant to the terms hereof (to the extent any such documents and notices are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.

(b)Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the last day of each month, deliver to Collateral Agent:

(i)a duly completed Compliance Certificate signed by a duly authorized officer;

(ii)copies of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries;

(iii)written notice of the commencement of, and any material development in, the proceedings contemplated by Section 5.8 hereof; and

(iv)prompt written notice of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of Two Hundred Fifty Thousand Dollars ($250,000), and written notice of all returns (excluding expired product), disputes and claims regarding Inventory that involve more than One Hundred Thousand Dollars ($100,000) individually or in the aggregate in any month.

(c)Keep proper, complete and true books of record and account in accordance with GAAP in all material respects except, in the case of unaudited financial statements, for the absence of footnotes and subject to year‑end audit adjustments as to the interim financial statements.  Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business hours

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upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral.  Such audits shall be conducted no more often than twice every year unless (and more frequently if) an Event of Default has occurred and is continuing.

6.3Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material defects in accordance with past practices.  Returns and allowances between Borrower, or any of its Subsidiaries, as applicable, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary practices as they exist as of the Effective Date.

6.4Taxes; Pensions.  Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries and shown on such returns; provided that Borrower and each of its Subsidiaries may defer payment of any contested taxes if Borrower or such Subsidiary (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted; (b) notifies Collateral Agent of the commencement of, and any material development in, the proceeding; and (c) maintains adequate reserves or other appropriate provisions on the books of such Borrower or Subsidiary, as applicable, in accordance with GAAP and which do not involve, in the reasonable judgment of Collateral Agent, any reasonable risk of the sale, forfeiture or loss of any material portion of the Collateral.  Borrower and each Subsidiary, as applicable, shall deliver to Collateral Agent, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with the terms of applicable Governmental Requirements.

6.5Insurance.  Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location.  Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and the Lenders.  All property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and shall waive subrogation against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent (for the ratable benefit of the Secured Parties), as additional insured.  Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Collateral Agent, that it will give Collateral Agent thirty (30) days (or ten (10) days in the case of nonpayment of premium) prior written notice before any such policy or policies shall be canceled.  At Collateral Agent’s request, Borrower shall deliver to Collateral Agent certified copies of policies and evidence of all premium payments.  Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Secured Parties, on account of the then-outstanding Obligations.  Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy within ninety (90) days of receipt toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.  If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make (but has no obligation to do so), at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.

6.6Operating Accounts.

(a)Maintain Borrower’s and any Guarantor’s Collateral Accounts with depositary institutions that have agreed to execute Control Agreements in favor of Collateral Agent with respect to such Collateral Accounts.  The provisions of the previous sentence shall not apply, however, to Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any Guarantor’s, employees, and as identified to Collateral Agent by Borrower as such in the Perfection Certificate, provided that the

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amount deposited therein shall not exceed the amount reasonably expected to be due and payable for the next two succeeding pay periods.

(b)Borrower shall provide Collateral Agent ten (10) days’ prior written notice before Borrower or any Guarantor establishes any Collateral Account.  In addition, for each Collateral Account that Borrower or any Guarantor, at any time maintains, Borrower or such Guarantor shall, within fifteen (15) days’ of the establishment thereof, cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account (held for the ratable benefit of the Secured Parties) in accordance with the terms hereunder prior to the establishment of such Collateral Account.  The provisions of the previous sentence shall not apply to Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any Guarantor’s, employees.

(c)Neither Borrower nor any Guarantor shall maintain any Collateral Accounts except Collateral Accounts maintained in accordance with this Section 6.6.

6.7Protection of Intellectual Property Rights.  Borrower and each Guarantor shall: (a)  protect, defend and maintain the validity and enforceability of its respective Intellectual Property that is material to its business except as otherwise determined in its reasonable business judgment so long as no Event of Default exists; (b) promptly advise Collateral Agent in writing of material infringement by a third party of its respective material Intellectual Property of which it obtains Knowledge; and (c) not allow any of its respective Intellectual Property material to its respective business to be abandoned, forfeited or dedicated to the public without Collateral Agent’s prior written consent. 

6.8Litigation Cooperation.  Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third‑party suit or proceeding instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to Borrower.

6.9Landlord Waivers; Bailee Waivers.  If Borrower or any of its Subsidiaries, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then, in the event that the Collateral at any new location is valued (based on book value) in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, at Collateral Agent’s election, such bailee or landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition of any new offices or business locations, or any such storage with or delivery to any such bailee, as the case may be.

6.10Creation/Acquisition of Subsidiaries.  If Borrower or any Subsidiary creates or acquires any Subsidiary after the Effective Date, Borrower or such Subsidiary shall promptly notify Collateral Agent of such creation or acquisition, and Borrower or such Subsidiary shall take all actions reasonably requested by Collateral Agent or the Lenders to achieve any of the following with respect to such “New Subsidiary” (defined as a Subsidiary formed after the date hereof during the term of this Agreement):  (i) if such New Subsidiary is not a Foreign Subsidiary, to cause such New Subsidiary to become a guarantor with respect to the Obligations and to grant and pledge to Collateral Agent a perfected security interest in 100% of the stock, units or other evidence of ownership of any such New Subsidiary held by Borrower or its non-Foreign Subsidiaries or (ii) if such New Subsidiary is a Foreign Subsidiary of Borrower and/or of a Subsidiary that is not a Foreign Subsidiary, to grant and pledge to Collateral Agent a perfected security interest in the stock, units or other evidence of ownership of any such New Subsidiary held by Borrower or such non-Foreign Subsidiary, provided that, in the case of this clause (ii), unless no adverse tax consequences would occur under the Internal Revenue Code for a pledge of 100% of such stock, units or other evidence of ownership owned by Borrower or such non-Foreign Subsidiary, no more than 65% of the presently existing and hereafter arising issued and outstanding stock, units or other evidence of ownership, which entitle the holder thereof to vote for directors or any other matter, owned by Borrower or such non-Foreign Subsidiary shall be required to be pledged.

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6.11Further Assurances.  Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

7.NEGATIVE COVENANTS

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

7.1Dispositions.  Convey, sell, lease, transfer, assign, dispose of, license (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for (1) Transfers (a) of Inventory in the ordinary course of business; (b) of worn‑out or obsolete Equipment; (c) in connection with Permitted Liens, Permitted Investments and Permitted Licenses; (d) cash or Cash Equivalents pursuant to transactions not prohibited by this Agreement; (e) write offs of inventory in accordance with past practices; or (f) leased vehicles in the ordinary course of business; and (2) any Transfer by Borrower or any Subsidiary of any part of its business or property that is promptly replaced by other property of equivalent value in compliance with Section 4.1.

7.2Changes in Business, Management, Ownership or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower or such Subsidiary, as applicable, as of the Effective Date or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) permit any Key Person to cease being actively engaged in the management of Borrower (other than a result of non-permanent disability lasting no longer than thirty (30) consecutive days) unless written notice thereof is provided to Collateral Agent within ten (10) days of such cessation, or (ii) enter into any transaction or series of related transactions in which (A) the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than 35% of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions and (B) except as permitted by Section 7.3, Borrower ceases to own, directly or indirectly, 100% of the ownership interests in each Subsidiary of Borrower.  Borrower shall not, and shall not permit any of its Subsidiaries to, without at least twenty (20) days’ prior written notice to Collateral Agent: (A) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000) in assets or property of Borrower or any of its Subsidiaries, as applicable); (B) change its respective jurisdiction of organization, (C) except as permitted by Section 7.3, change its respective organizational structure or type, (D) change its respective legal name, or (E) change any organizational number(s) (if any) assigned by its respective jurisdiction of organization.

7.3Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another Person.  A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a Borrower or Guarantor hereunder in accordance with Section 6.10) or with (or into) Borrower, provided Borrower is the surviving legal entity and any Subsidiary that is not a Borrower or Guarantor may merge into any other Subsidiary. 

7.4Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any Subsidiary to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Secured Parties) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens.”

7.6Maintenance of Collateral Accounts.  With respect to Borrower or any Guarantor, maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

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7.7Restricted Payments.  (a) Declare or pay any dividends (other than dividends payable solely in capital stock) or make any other distribution or payment in respect of or redeem, retire or purchase any capital stock (other than (i) the declaration or payment of dividends to Borrower, (ii) so long as no Event of Default or event that with the passage of time would result in an Event of Default exists or would result therefrom, the declaration or payment of any dividends solely in the form of equity securities, (iii) repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements, stockholder rights plans, director or consultant stock option plans, or similar plans, provided such repurchases do not exceed One Hundred Thousand Dollars ($100,000) in the aggregate per fiscal year), and (iv) the repurchase of the entirety of Borrower’s Series A Preferred Stock and 200,000 shares of common stock pursuant to the terms of that certain Securities Purchase Agreement delivered to Collateral Agent on or prior to the Fifth Amendment Effective Date in the aggregate amount not to exceed an amount equal to the amount of Fifth Amendment Net Equity Proceeds minus Ten Million Dollars ($10,000,000), (b) other than the Obligations in accordance with the terms hereof, purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Subordinated Debt prior to its scheduled maturity unless being replaced with Indebtedness of at least the same principal amount and such new Indebtedness is Permitted Indebtedness, or (c) be a party to or bound by any agreement that restricts a Subsidiary from paying dividends or otherwise distributing property to Borrower.

7.8Investments.  Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so other than Permitted Investments.

7.9Transactions with Affiliates; ASCV Activities.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person, and (b) Subordinated Debt or equity investments by Borrower’s investors in Borrower or its Subsidiaries.  Borrower shall not permit ASCV (i) to have any operations or take part in any activities other than the continuance of such operations and activities that exist on the Effective Date, or (ii) to incur any liabilities other than liabilities arising from the continuance of operations and activities occurring on the Effective Date.  Transactions between or among any two or more of Borrower and its direct or indirect Subsidiaries, in the ordinary course of business consistent with current and past practices, shall be permitted; provided that, notwithstanding anything herein to the contrary, the foregoing shall only be permitted if (x) any Indebtedness in connection with same is solely Subordinated Debt and (y) it is otherwise not prohibited by this Agreement (i.e. no other provision of this Agreement prohibits such action, liabilities, or other activities, etc.).

7.10Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof (unless permitted in the applicable subordination agreement) or adversely affect the subordination thereof to Obligations owed to the Lenders.   

7.11Compliance.  (a) Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Term Loan for that purpose; (b) fail to meet the minimum funding requirements of ERISA; (c) permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; (d) fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; or (e) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority greater than Two Hundred Fifty Thousand Dollars ($250,000).

7.12Compliance with Anti‑Terrorism Laws.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists.  Neither Borrower nor

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any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, (a) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti‑Terrorism Law, or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti‑Terrorism Law.

7.13Financial Covenants.

(a)Minimum Revenue Amount.(i) Permit revenues (under GAAP) from the sale in the ordinary course of business to third party customers of ILUVIEN, or other such products that may be acquired or licensed, by Borrower, on a trailing six (6) month basis, tested on March 31, 2023, for the trailing six (6) month period then ended and subsequently tested at the end of each quarter thereafter prior to January 1, 2025, to be less than the applicable Minimum Revenue Amount set forth below for such testing date, and (ii) beginning on the fiscal quarter ending on March 31, 2025, and each fiscal quarter ending thereafter, permit revenues (under GAAP) from the sale in the ordinary course of business to third party customers of ILUVIEN, or other such products that may be acquired or licensed, by Borrower on a trailing six (6) month basis for such fiscal quarter to be less than the amount equal to 110% of the actual revenues on a trailing six (6) month basis as of the quarter ending twelve (12) months prior to such date of determination: 

Testing Date:	Minimum Revenue Amount:
March 31, 2023	$[***]
June 30, 2023	$[***]
September 30, 2023	$[***]
December 31, 2023	$[***]
March 31, 2024	$[***]
June 30, 2024	$[***]
September 30, 2024	$[***]
December 31, 2024	$[***]

(b)Reserved. 

8.EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

8.1Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Term Loan on its due date, or (b) pay any other Obligation within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof).

8.2Covenant Default.

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(a)Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 3.6 (Post-Close Requirements), 6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Landlord Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of Subsidiaries), or Borrower violates any provision in Section 7; or

(b)Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any other Loan Document to which such person is a party, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within fifteen (15) days after the earlier of Knowledge thereof by the Responsible Officers or notice of such failure from Collateral Agent; provided, however, that if the default cannot by its nature be cured within the fifteen (15) day period or cannot after diligent attempts by Borrower or such Subsidiary, as applicable, be cured within such fifteen (15) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Term Loans shall be made during such cure period). 

8.3Material Adverse Change.  A Material Adverse Change has occurred.

8.4Attachment; Levy; Restraint on Business.

(a)(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of any entity under control of Borrower or its Subsidiaries on deposit with any institution at which Borrower or any of its Subsidiaries maintains a Collateral Account valued individually or in the aggregate greater than Two Hundred Fifty Thousand Dollars ($250,000), or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of its Subsidiaries or their respective assets valued individually or in the aggregate greater than Two Hundred Fifty Thousand Dollars ($250,000) by any government agency, and the same under subclauses (i) and (ii) of this clause (a) are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); and

(b)(i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any material part of its business for a period greater than ten (10) days.

8.5Insolvency.  (a) Borrower or any of its Subsidiaries (other than (i) Alimera Opthamologie GmbH as long as such Subsidiary holds assets at such time of no greater than $200,000 and (ii) ASCV) is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty‑five (45) days (but no Term Loans shall be extended while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed).

8.6Other Agreements.  There is a default in (a) any agreement to which Borrower or any of its Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or that could reasonably be expected to have a Material Adverse Change or (b) there is any default under a Material Agreement, and in either such case the counterparty thereto accelerates the payments owed thereunder in an amount of more than Seven Hundred Fifty Thousand Dollars ($750,000).

8.7Judgments.  One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated or unstayed for a period of thirty (30) days after the entry thereof; provided that such judgment, order or decree is not covered by independent third‑party insurance as to which (a) Borrower reasonably believes such insurance carrier will accept liability, (b) Borrower or the applicable Subsidiary has submitted such claim to such insurance carrier and (c) liability has not been rejected by such insurance carrier.

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8.8Misrepresentations.  Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or the Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement, when taken as a whole, is incorrect in any material respect when made.

8.9Subordinated Debt.  A default or breach by a counterparty occurs under any subordination agreement agreements (including the Intercompany Subordination Agreement), or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches any terms of such agreement, in each case relating to Subordinated Debt.

8.10Guaranty.  (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; or (b) any Guarantor does not perform any obligation or covenant under any Guaranty.

8.11Governmental Approvals; FDA Action.  (a) Any Governmental Approval shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or non‑renewal has resulted in or could reasonably be expected to result in a Material Adverse Change; or (b) (i) the FDA, DOJ or other Governmental Authority initiates a Regulatory Action or any other enforcement action against Borrower or any of its Subsidiaries or any supplier of Borrower or any of its Subsidiaries that causes Borrower or any of its Subsidiaries to recall, withdraw, remove or discontinue manufacturing, distributing, and/or marketing any of its products, even if such action is based on previously disclosed conduct, which Regulatory Action or other enforcement action results in a decrease of 5% or more in total revenues (under GAAP) from the sale in the ordinary course of business to third party customers of ILUVIEN or any other products at the end of each month for the six months following the occurrence of such Regulatory Action or other enforcement action, measured on a trailing three (3) month basis, compared to the trailing three (3) month revenue as measured on the month end immediately prior to the occurrence of such Regulatory Action or other enforcement action and each month end during such six (6) month period (with each period being adjusted for customary seasonality, if applicable, solely in a manner consistent with documented seasonality for such revenues from the same period in the immediately prior fiscal year of Borrower); (ii) the FDA issues a warning letter to Borrower or any of its Subsidiaries with respect to any of its activities or products which could reasonably be expected to result in a Material Adverse Change; (iii) Borrower or any of its Subsidiaries conducts a mandatory or voluntary recall which could reasonably be expected to result in liability and expense to Borrower or any of its Subsidiaries of Five Hundred Thousand Dollars ($500,000) or more and such recall has resulted in a decrease of 5% or more in total revenues (under GAAP) from the sale in the ordinary course of business to third party customers of ILUVIEN or any other products at the end of each month for the six months following the occurrence of such recall, measured on a trailing three (3) month basis, compared to the trailing three (3) month revenue as measured on the month end immediately prior to the occurrence of such recall and each month end during such six (6) month period (with each period being adjusted for customary seasonality, if applicable, solely in a manner consistent with documented seasonality for such revenues from the same period in the immediately prior fiscal year of Borrower); (iv) Borrower or any of its Subsidiaries enters into a settlement agreement with the FDA, DOJ or other Governmental Authority that results in aggregate liability as to any single or related series of transactions, incidents or conditions, of Five Hundred Thousand Dollars ($500,000) or more or that could reasonably be expected to result in a Material Adverse Change, even if such settlement agreement is based on previously disclosed conduct; or (v) the FDA revokes any authorization or permission granted under any Registration, or Borrower or any of its Subsidiaries withdraws any Registration, that could reasonably be expected to result in a Material Adverse Change.

8.12Lien Priority.  Except as the result of the action or inaction of Collateral Agent or the Lenders, any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and perfected Lien on a material portion of the Collateral purported to be secured thereby, subject to no prior or equal Lien, other than Permitted Liens arising as a matter of applicable law.

9.RIGHTS AND REMEDIES

9.1Rights and Remedies.

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(a)Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may, and at the written direction of Required Lenders shall,without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.3 occurs all Obligations shall be immediately due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.3 occurs all obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral Agent or the Lenders).

(b)Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right and at the written direction of the Required Lenders shall,without notice or demand, to do any or all of the following:

(i)foreclose upon and/or sell or otherwise liquidate, the Collateral;

(ii)make a demand for payment upon any Guarantor pursuant to the Guaranty delivered by such Guarantor;

(iii)apply to the Obligations any (A) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, (B) any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower, or (C) amounts received from any Guarantors in accordance with the respective Guaranty delivered by such Guarantor; and/or

(iv)commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.

(c)Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right and at the written direction of the Required Lenders shall, without notice or demand, to do any or all of the following:

(i)settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount of such account;

(ii)make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its Liens in the Collateral (held for the ratable benefit of the Secured Parties).  Borrower shall assemble the Collateral if Collateral Agent requests and make it available at such location as Collateral Agent reasonably designates.  Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred.  Borrower grants Collateral Agent a license to enter and occupy any of its premises, without charge, to exercise any of Collateral Agent’s rights or remedies;

(iii)ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, any of the Collateral; Collateral Agent is hereby granted a non‑exclusive, royalty‑free license or other right to use, without charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the Lenders;

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(iv)place a “hold” on any Collateral Account maintained with Collateral Agent or any Lender or otherwise in respect of which a Control Agreement has been delivered in favor of Collateral Agent (for the ratable benefit of the Secured Parties) and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

(v)demand and receive possession of Borrower’s Books;

(vi)appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries; and

(vii)subject to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent Circumstance. 

9.2Power of Attorney.  Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney‑in‑fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts of Borrower directly with the applicable Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law permits.  Borrower hereby appoints Collateral Agent as its lawful attorney‑in‑fact to sign Borrower’s or any of its Subsidiaries’ name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make extend Term Loans hereunder.  Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to provide Term Loans terminates.

9.3Protective Payments.  If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral.  Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter.  No such payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default.

9.4Application of Payments and Proceeds.  Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’

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Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations outstanding; and fourth, to any other Obligations owing to Collateral Agent or any Lender under the Loan Documents.  Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.  In carrying out the foregoing, (x) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.  Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest or obligation “ratably,” “proportionally” or in similar terms shall refer to the Lenders’ Pro Rata Shares unless expressly provided otherwise.  Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each Lender’s Pro Rata Share of any Term Loan and the ratable distribution of interest, fees and reimbursements paid or made by Borrower.  Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not be responsible for determining whether the other Lenders also received their scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its Pro Rata Share of scheduled payments made on any date or dates, then such Lender shall remit to Collateral Agent or other the Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent.  If any payment or distribution of any kind or character, whether in cash, properties or securities, shall be received by a Lender in excess of its Pro Rata Share, then the portion of such payment or distribution in excess of such Lender’s Pro Rata Share shall be received and held by such Lender in trust for and shall be promptly paid over to the other Lenders (in accordance with their respective Pro Rata Shares) for application to the payments of amounts due on such other Lenders’ claims.  To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to ensure that such return of payment is on a pro rata basis.  If any Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for the Secured Parties for purposes of perfecting Collateral Agent’s security interest therein (held for the ratable benefit of the Secured Parties).

9.5Liability for Collateral.  So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

9.6No Waiver; Remedies Cumulative.  Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or by Borrower or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for which it is given.  The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative.  Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law, or in equity.  The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver.  Collateral Agent’s or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.

9.7Demand Waiver.  Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.

10.NOTICES

Other than as specifically provided herein, all notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid;

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(b) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (c) when delivered, if hand‑delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address indicated below.  Any of Collateral Agent, Lender or Borrower may change its mailing address by giving the other party written notice thereof in accordance with the terms of this Section 10. 

If to Borrower:	ALIMERA SCIENCES, INC. 6120 Windward Parkway Suite 290 Alpharetta, GA 30005 Attn:  Rick Eiswirth, President and CEO
with a copy (which shall not constitute notice) to:	GUNDERSON DETTMER STOUGH VILLENEUVE FRANKLIN & HACHIGIAN, LLP One Marina Park Drive, Suite 900 Boston, MA 02210 Attn:  Keith Scherer          Jay DelMonico
and with an additional copy (which shall not constitute notice) to:	ALIMERA SCIENCES, INC. 6120 Windward Parkway Suite 290 Alpharetta, GA 30005 Attn:  Chris Visick, VP and General Counsel
If to Collateral Agent:	SLR INVESTMENT CORP. 500 Park Avenue, 3rd Floor New York, NY 10022 Attention: Anthony Storino
with a copy (which shall not constitute notice) to:	Latham & Watkins LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111 Attention: Haim Zaltzman

11.CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

11.1Waiver of Jury Trial.  EACH OF BORROWER, COLLATERAL AGENT AND LENDERS UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.  THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING.  THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

11.2Governing Law and Jurisdiction.  THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN

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ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL, PROVIDED,  HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

11.3Submission to Jurisdiction.  Any legal action or proceeding with respect to the Loan Documents shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, Borrower hereby accepts for itself and in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts.  Notwithstanding the foregoing, Collateral Agent and Lenders shall have the right to bring any action or proceeding against Borrower (or any property of Borrower) in the court of any other jurisdiction Collateral Agent or Lenders deem necessary or appropriate in order to realize on the Collateral or other security for the Obligations.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.  Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

11.4Service of Process.  Borrower irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable requirements of law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified herein (and shall be effective when such mailing shall be effective, as provided therein). 

11.5Non-exclusive Jurisdiction.  Nothing contained in this Article 11 shall affect the right of Collateral Agent or Lenders to serve process in any other manner permitted by applicable requirements of law or commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.

12.GENERAL PROVISIONS

12.1Successors and Assigns.  This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s prior written consent (which may be granted or withheld in Collateral Agent’s discretion, subject to Section 12.5).  The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or grant of a participation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents;provided,  however, that any such Lender Transfer (other than (i) any Transfer at any time that an Event of Default has occurred and is continuing, or (ii) a transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and benefits under this Agreement and the other Loan Documents shall require the prior written consent of Collateral Agent (such approved assignee, an “Approved Lender”).  Borrower and Collateral Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral Agent shall have received and accepted an effective assignment agreement in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee or Approved Lender as Collateral Agent reasonably shall require.  Notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer in connection with (x) assignments by a Lender due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to (a) any Person which is an Affiliate or Subsidiary of Borrower, (b) a then-current direct competitor of Borrower or an operating company that solely operates in the pharmaceutical industry, (c) any current or past party (or any Affiliate thereof) to any litigation with

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Borrower or any Subsidiary as disclosed directly to Collateral Agent in writing prior to any assignment, or (d) [***] (or any Affiliate thereof), in each such case reasonably determined by Collateral Agent at the time of such assignment.

12.2Indemnification.  Borrower agrees to indemnify, defend and hold each Secured Party and their respective directors, officers, employees, consultants, agents, attorneys, or any other Person affiliated with or representing such Secured Party (each, an “Indemnified Person”) harmless against:  (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses and Lenders’ Expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses actually incurred and subject to the limitation provided in the definition of “Lenders’ Expenses”), except, in each case, for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.  Borrower hereby further agrees to indemnify, defend and hold each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or willful misconduct. 

12.3Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

12.4Correction of Loan Documents.  Collateral Agent may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.

12.5Amendments in Writing; Integration.(a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:

(i)no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent;

(ii)no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without Collateral Agent’s written consent or signature; and

(iii)no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its Guaranty obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 12.5 or the definitions of the terms used in this Section 12.5 insofar as the definitions affect the substance of this Section 12.5; (F) consent to the assignment,

39

delegation or other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.8.  It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the immediately preceding sentence.

(b)Other than as expressly provided for in Section 12.5(a)(i)‑(iii), Collateral Agent may, at its discretion, or if requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

(c)This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

12.6Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.

12.7Survival.  All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied.  The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the withholding provision in Section 2.5 hereof and the confidentiality provisions in Section 12.8 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

12.8Confidentiality.  In handling any confidential information of Borrower, each of the Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or in connection with a Lender’s own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; (b) to prospective permitted transferees (other than those identified in (a) above) or purchasers of any interest in the Term Loans (provided, however, the Lenders and Collateral Agent shall, except upon the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, rule, regulation, regulatory or self-regulatory authority, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement or have agreed to similar confidentiality terms with the Lenders and/or Collateral Agent, as applicable, with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent through no breach of this provision by the Lenders or Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information.  The agreements provided under this Section 12.8 supersede all prior agreements, understanding, representations, warranties and negotiations between the parties about the subject matter of this Section 12.8.

12.9Right of Set Off.  Borrower hereby grants to Collateral Agent and to each Lender, a Lien, security interest and right of set off as security for all Obligations to Secured Parties hereunder, whether now existing or

40

hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of any Secured Party or any entity under the control of such Secured Party (including a Collateral Agent Affiliate) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, any Secured Party may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY BORROWER.

12.10Cooperation of Borrower.  If necessary, Borrower agrees to (i) execute any documents reasonably required to effectuate and acknowledge each assignment of a Term Loan Commitment (or portion thereof) or Term Loan (or portion thereof) to an assignee in accordance with Section 12.1, (ii) make Borrower’s management personnel available to meet with Collateral Agent and prospective participants and permitted assignees of Term Loan Commitments, the Term Loans or portions thereof (which meetings shall be conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral Agent and the Lenders in the preparation of information relating to the financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment (or portions thereof) or Term Loan (or portions thereof) reasonably may request.  Subject to the provisions of Section 12.8, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan Commitment (or portions thereof), any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement.

12.11Public Announcement. Borrower hereby agrees that Collateral Agent and each Lender may make a public announcement of the transactions contemplated by this Agreement, subject to review and reasonable approval by, and coordination of timing with, Borrower and its counsel in light of Borrower’s status as a public company, and may publicize the same in marketing materials, newspapers and other publications, and otherwise, and in connection therewith may use Borrower’s name, tradenames and logos.  Collateral Agent and the Lenders may also make disclosures to the SEC or other governmental agency and any other public disclosure with investors, other governmental agencies or other related persons.

12.12Collateral Agent and Lender Agreement. Collateral Agent and the Lenders hereby agree to the terms and conditions set forth on Exhibit B attached hereto.  Borrower acknowledges and agrees to the terms and conditions set forth on Exhibit B attached hereto.

12.13Time of Essence.  Time is of the essence for the performance of Obligations under this Agreement.

12.14Termination Prior to Maturity Date; Survival.  All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied.  So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement and for which no claim has been made) in accordance with the terms of this Agreement, this Agreement may be terminated prior to the Maturity Date by Borrower, effective five (5) Business Days after written notice of termination is given to Collateral Agent and the Lenders.

[Balance of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

BORROWER:

ALIMERA SCIENCES, INC.

By

Name:

Title:

COLLATERAL AGENT AND LENDER:

SLR INVESTMENT CORP.

By

Name:

Title:  Authorized Signatory

[Signature Page to Loan and Security Agreement (Solar/Alimera)]

LENDER:

SUNS SPV LLC

By

Name:

Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND SPV, LLC

By

Name:

Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME BDC SPV LLC

By

Name:

Title:  Authorized Signatory

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

By

Name:

Title:  Authorized Signatory

SCP SF DEBT FUND L.P.

By

Name:

Title:  Authorized Signatory

[Signature Page to Loan and Security Agreement (Solar/Alimera)]

SCHEDULE 1.1

Lenders and Commitments

	Term A Loan
Lender	Term Loan Commitment	Commitment Percentage
SLR Investment Corp.	$12,958,564.54	30.491%
Suns SPV LLC	$8,913,690.49	20.973%
SCP Private Credit Income Fund SPV LLC	$4,973,760.72	11.703%
SCP Private Credit Income BDC SPV LLC	$3,710,402.73	8.730%
SCP Private Corporate Lending Fund SPV LLC	$6,738,774.26	15.856%
SCP Cayman Debt Master Fund SPV LLC	$2,882,960.16	6.783%
SCP SF Debt Fund LP	$964,802.21	2.270%
SLR CP SF Debt Fund SPV LLC	$1,357,044.89	3.193%
TOTAL	$42,500,000.00	100.00%

	Term B Loan
Lender	Term Loan Commitment	Commitment Percentage
SLR Investment Corp.	$1,115,209.68	44.61%
Suns SPV LLC	$171,393.56	6.86%
SCP Private Credit Income Fund SPV LLC	$292,574.16	11.70%
SCP Private Credit Income BDC SPV LLC	$218,258.98	8.73%
SCP Private Corporate Lending Fund SPV LLC	$396,398.49	15.86%
SCP Cayman Debt Master Fund SPV LLC	$169,585.89	6.78%
SCP SF Debt Fund LP	$136,579.24	5.46%
TOTAL	$2,500,000.00	100.00%

	Term C Loan
Lender	Term Loan Commitment	Commitment Percentage
SLR Investment Corp.	$1,286,603.24	51.464%
SCP Private Credit Income Fund L.P.	$292,574.16	11.703%
SCP Private Credit Income BDC LLC	$218,258.98	8.730%
SCP Private Corporate Lending Fund L.P.	$396,398.49	15.856%
SCP Cayman Debt Master Fund L.P.	$169,585.89	6.783%
SCP SF Debt Fund LP	$136,579.24	5.463%
TOTAL	$2,500,000.00	100.00%

	Term D Loan
Lender	Term Loan Commitment	Commitment Percentage
SLR Investment Corp.	$10,292,825.90	51.464%
SCP Private Credit Income Fund LP	$2,340,593.28	11.703%
SCP Private Credit Income BDC LLC	$1,746,071.87	8.730%
SCP Private Corporate Lending Fund SPV LLC	$3,171,187.89	15.856%
SCP Private Corporate Lending Fund LP	$1,356,687.13	6.783%
SCP SF Debt Fund LP	$1,092,633.93	5.463%
TOTAL	$20,000,000.00	100.00%
	Term Loans (Aggregate)
Lender	Term Loan Commitment	Commitment Percentage
SLR Investment Corp.	$25,653,203.36	38.005%
SCP Cayman Debt Master Fund L.P.	$169,585.89	0.251%
SCP Cayman Debt Master Fund SPV LLC	$3,052,546.05	4.522%
SCP Private Corporate Lending Fund LP	$1,753,085.62	2.597%
SCP Private Corporate Lending Fund SPV LLC	$10,306,360.64	15.269%
SCP Private Credit Income BDC LLC	$1,964,330.85	2.910%
SCP Private Credit Income BDC SPV LLC	$3,928,661.71	5.820%
SCP Private Credit Income Fund LP	$2,633,167.44	3.901%
SCP Private Credit Income Fund SPV LLC	$5,266,334.88	7.802%
SCP SF Debt Fund LP	$2,330,594.62	3.453%
SLR CP SF Debt Fund SPV LLC	$1,357,044.89	2.010%
Suns SPV LLC	$9,085,084.05	13.459%
TOTAL	$67,500,000.00	100.00%

EXHIBIT A

Description of Collateral

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

All goods, Accounts (including health‑care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include (a) unless no adverse tax consequences would occur under the Internal Revenue Code for a pledge of 100% of any outstanding shares of capital stock of any Foreign Subsidiary of Borrower, more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter, (b) any interest of Borrower as a lessee or sublessee under a real property lease; (c) rights held under a license that are not assignable by their terms without the consent of the licensor thereof (but only to the extent such restriction on assignment is effective under Section 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); (d) any interest of Borrower as a lessee under an Equipment lease if Borrower is prohibited by the terms of such lease from granting a security interest in such lease or under which such an assignment or Lien would cause a default to occur under such lease; or (e) any “intent to use” United States Trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement is filed) solely to the extent, if any, that, and only during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent to use Trademark applications under applicable federal law; provided, however, that upon termination of such prohibition, such interest shall immediately become Collateral without any action by Borrower, Collateral Agent or any Lender. 

EXHIBIT B

Collateral Agent and Lender Terms

1.Appointment of Collateral Agent.

(a)Each Lender hereby appoints Solar (together with any successor Collateral Agent pursuant to Section 1.7 of this Exhibit B) as Collateral Agent under the Loan Documents and authorizes Collateral Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from Borrower, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated to Collateral Agent under such Loan Documents and (iii) exercise such powers as are reasonably incidental thereto.

(b)Without limiting the generality of clause (a) above, Collateral Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lenders with respect to all payments and collections arising in connection with the Loan Documents (including in any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Loan Document to any Lender is hereby authorized to make such payment to Collateral Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of Collateral Agent and Lenders with respect to any Obligation in any bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Lender), (iii) act as collateral agent for the Secured Parties for purposes of the perfection of all Liens created by the Loan Documents and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral as permitted pursuant to the Loan Agreement, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to Collateral Agent and the other Lenders with respect to Borrower and/or the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii) execute any amendment, consent or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent or waiver; provided,  however, that Collateral Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for Collateral Agent and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any Deposit Account maintained by Borrower or any Guarantor with, and cash and Cash Equivalents held by, such Lender, and may further authorize and direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Collateral Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed.  Collateral Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Lender).  Any such Person shall benefit from this Exhibit B to the extent provided by Collateral Agent.

(c)Under the Loan Documents, Collateral Agent (i) is acting solely on behalf of the Lenders, with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Collateral Agent”, the terms “agent”, “Collateral Agent” and “collateral agent” and similar terms in any Loan Document to refer to Collateral Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Person and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender, by accepting the benefits of the Loan Documents, hereby waives and agrees not to assert any claim against Collateral Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.  Except as expressly set forth in the Loan Documents, Collateral Agent shall not have any duty to disclose, and shall not be liable for failure to disclose, any information relating to Borrower or any of its Subsidiaries that is communicated to or obtained by Solar or any of its Affiliates in any capacity.

2.Binding Effect; Use of Discretion; E-Systems.

(a)Each Lender, by accepting the benefits of the Loan Documents, agrees that (i) any action taken by Collateral Agent or the Required Lenders (or, if expressly required in any Loan Document, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by Collateral Agent in reliance upon the instructions of the Required Lenders (or, where so required, such greater proportion) and

(iii) the exercise by Collateral Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of Lenders.

(b)If Collateral Agent shall request instructions from the Required Lenders or all affected Lenders with respect to any act or action (including failure to act) in connection with any Loan Document, then Collateral Agent shall be entitled to refrain from such act or taking such action unless and until Collateral Agent shall have received instructions from the Required Lenders or all affected Lenders, as the case may be, and Collateral Agent shall not incur liability to any Person by reason of so refraining.  Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document (i) if such action would, in the opinion of Collateral Agent, be contrary to any Requirement of Law or any Loan Document, (ii) if such action would, in the opinion of Collateral Agent, expose Collateral Agent to any potential liability under any Requirement of Law or (iii) if Collateral Agent shall not first be indemnified to its satisfaction against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  Without limiting the foregoing, no Lender shall have any right of action whatsoever against Collateral Agent as a result of Collateral Agent acting or refraining from acting under any Loan Document in accordance with the instructions of the Required Lenders or all affected Lenders, as applicable.

(c)Collateral Agent is hereby authorized by Borrower and each Lender to establish procedures (and to amend such procedures from time to time) to facilitate administration and servicing of the Term Loans and other matters incidental thereto.  Without limiting the generality of the foregoing, Collateral Agent is hereby authorized to establish procedures to make available or deliver, or to accept, notices, documents (including, without limitation, borrowing base certificates) and similar items on, by posting to or submitting and/or completion, on E-Systems.  Borrower and each Lender acknowledges and agrees that the use of transmissions via an E-System or electronic mail is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse, and Borrower and each Lender assumes and accepts such risks by hereby authorizing the transmission via E-Systems or electronic mail.  Each “e‑signature” on any such posting shall be deemed sufficient to satisfy any requirement for a “signature”, and each such posting shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to any Loan Document, any applicable provision of any Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter.  All uses of an E-System shall be governed by and subject to, in addition to this Section, the separate terms, conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated from time to time, including on such E-System) and related contractual obligations executed by Collateral Agent, Borrower and/or Lenders in connection with the use of such E-System.  ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE.”  NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E‑SYSTEMS.

3.Collateral Agent’s Reliance, Etc.  Collateral Agent may, without incurring any liability hereunder, (a) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, Borrower) and (b) rely and act upon any document and information (including those transmitted by electronic transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.  None of Collateral Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan Document, and each Lender and Borrower hereby waives and shall not assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting from the gross negligence or willful misconduct of Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment of a court of competent jurisdiction) in connection with the duties of Collateral Agent expressly set forth herein.  Without limiting the foregoing, Collateral Agent: (i) shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Persons, except to the extent that a court of competent jurisdiction determines in a final non-appealable judgment that Collateral Agent acted with gross negligence or willful misconduct in the selection of such Related Person; (ii) shall not be responsible to any Lender or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of

any Lien created or purported to be created under or in connection with, any Loan Document; (iii) makes no warranty or representation, and shall not be responsible, to any Lender or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of Borrower or any Related Person of Borrower in connection with any Loan Document or any transaction contemplated therein or any other document or information with respect to Borrower, whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted to the Lenders) omitted to be transmitted by Collateral Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Collateral Agent in connection with the Loan Documents; and (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of Borrower or as to the existence or continuation or possible occurrence or continuation of any Event of Default, and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from Borrower or any Lender describing such Event of Default that is clearly labeled “notice of default” (in which case Collateral Agent shall promptly give notice of such receipt to all Lenders, provided that Collateral Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to Collateral Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction); and, for each of the items set forth in clauses (i) through (iv) above, each Lender and Borrower hereby waives and agrees not to assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any right, claim or cause of action it might have against Collateral Agent based thereon.

4.Collateral Agent Individually.  Collateral Agent and its Affiliates may make loans and other extensions of credit to, acquire stock and stock equivalents of, engage in any kind of business with, Borrower or any Affiliate of Borrower as though it were not acting as Collateral Agent and may receive separate fees and other payments therefor.  To the extent Collateral Agent or any of its Affiliates makes any Term Loans or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender”, “Required Lender” and any similar terms shall, except where otherwise expressly provided in any Loan Document, include, without limitation, Collateral Agent or such Affiliate, as the case may be, in its individual capacity as Lender, or as one of the Required Lenders.

5.Lender Credit Decision; Collateral Agent Report.  Each Lender acknowledges that it shall, independently and without reliance upon Collateral Agent, any Lender or any of their Related Persons or upon any document solely or in part because such document was transmitted by Collateral Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of Borrower and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate.  Except for documents expressly required by any Loan Document to be transmitted by Collateral Agent to the Lenders, Collateral Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, Property, financial and other condition or creditworthiness of Borrower or any Affiliate of Borrower that may come in to the possession of Collateral Agent or any of its Related Persons.  Each Lender agrees that is shall not rely on any field examination, audit or other report provided by Collateral Agent or its Related Persons (an “Collateral Agent Report”).  Each Lender further acknowledges that any Collateral Agent Report (a) is provided to the Lenders solely as a courtesy, without consideration, and based upon the understanding that such Lender will not rely on such Collateral Agent Report, (b) was prepared by Collateral Agent or its Related Persons based upon information provided by Borrower solely for Collateral Agent’s own internal use, and (c) may not be complete and may not reflect all information and findings obtained by Collateral Agent or its Related Persons regarding the operations and condition of Borrower.  Neither Collateral Agent nor any of its Related Persons makes any representations or warranties of any kind with respect to (i) any existing or proposed financing, (ii) the accuracy or completeness of the information contained in any Collateral Agent Report or in any related documentation, (iii) the scope or adequacy of Collateral Agent’s and its Related Persons’ due diligence, or the presence or absence of any errors or omissions contained in any Collateral Agent Report or in any related documentation, and (iv) any work performed by Collateral Agent or Collateral Agent’s Related Persons in connection with or using any Collateral Agent Report or any related documentation.  Neither Collateral Agent nor any of its Related Persons shall have any duties or obligations in connection with or as a result of any Lender receiving a copy of any Collateral Agent Report.  Without limiting the generality of the forgoing, neither Collateral Agent nor any of its Related Persons shall have any responsibility for the accuracy or completeness of any Collateral Agent Report, or the appropriateness of any Collateral Agent Report for

any Lender’s purposes, and shall have no duty or responsibility to correct or update any Collateral Agent Report or disclose to any Lender any other information not embodied in any Collateral Agent Report, including any supplemental information obtained after the date of any Collateral Agent Report.  Each Lender releases, and agrees that it will not assert, any claim against Collateral Agent or its Related Persons that in any way relates to any Collateral Agent Report or arises out of any Lender having access to any Collateral Agent Report or any discussion of its contents, and agrees to indemnify and hold harmless Collateral Agent and its Related Persons from all claims, liabilities and expenses relating to a breach by any Lender arising out of such Lender’s access to any Collateral Agent Report or any discussion of its contents.

6.Indemnification.  Each Lender agrees to reimburse Collateral Agent and each of its Related Persons (to the extent not reimbursed by Borrower as required under the Loan Documents (including pursuant to Section 12.2 of the Agreement)) promptly upon demand for its Pro Rata Share of any out-of-pocket costs and expenses (including, without limitation, fees, charges and disbursements of financial, legal and other advisors and any taxes or insurance paid in the name of, or on behalf of, Borrower) incurred by Collateral Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, amendment, consent, waiver or enforcement of, or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding (including, without limitation, preparation for and/or response to any subpoena or request for document production relating thereto) or otherwise) in respect of, or legal advice with respect to, its rights or responsibilities under, any Loan Document.  Each Lender further agrees to indemnify Collateral Agent and each of its Related Persons (to the extent not reimbursed by Borrower as required under the Loan Documents (including pursuant to Section 12.2 of the Agreement)), ratably according to its Pro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, to the extent not indemnified by the applicable Lender, taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to or for the account of any Lender) that may be imposed on, incurred by, or asserted against Collateral Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by Collateral Agent or any of its Related Persons under or with respect to the foregoing; provided that no Lender shall be liable to Collateral Agent or any of its Related Persons under this Section 6 of this Exhibit B to the extent such liability has resulted from the gross negligence or willful misconduct of Collateral Agent or, as the case may be, such Related Person, as determined by a final non-appealable judgment of a court of competent jurisdiction.  To the extent required by any applicable Requirement of Law, Collateral Agent may withhold from any payment to any Lender under a Loan Document an amount equal to any applicable withholding tax.  If the Internal Revenue Service or any other Governmental Authority asserts a claim that Collateral Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any reason, or if Collateral Agent reasonably determines that it was required to withhold taxes from a prior payment to or for the account of any Lender but failed to do so, such Lender shall promptly indemnify Collateral Agent fully for all amounts paid, directly or indirectly, by Collateral Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Collateral Agent.  Collateral Agent may offset against any payment to any Lender under a Loan Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender but which was not so withheld, as well as any other amounts for which Collateral Agent is entitled to indemnification from such Lender under the immediately preceding sentence of this Section 6 of this Exhibit B.

7.Successor Collateral Agent.  Collateral Agent may resign at any time by delivering notice of such resignation to the Lenders and Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective, in accordance with the terms of this Section 7 of this Exhibit B.  If Collateral Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Collateral Agent.  If, after thirty (30) days after the date of the retiring Collateral Agent’s notice of resignation, no successor Collateral Agent has been appointed by the Required Lenders and has accepted such appointment, then the retiring Collateral Agent may, on behalf of the Lenders, appoint a successor Collateral Agent from among the Lenders.  Effective immediately upon its resignation, (a) the retiring Collateral Agent shall be discharged from its duties and obligations under the Loan Documents, (b) the Lenders shall assume and perform all of the duties of Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (c) the retiring Collateral Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly acting as Collateral Agent under the Loan Documents, and (d) subject to its rights under Section

2(b) of this Exhibit B, the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its rights as Collateral Agent under the Loan Documents.  Effective immediately upon its acceptance of a valid appointment as Collateral Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the Loan Documents.

8.Release of Collateral.  Each Lender hereby consents to the release and hereby directs Collateral Agent to release (or in the case of clause (b)(ii) below, release or subordinate) the following:

(a)any Guarantor if all of the stock of such Subsidiary owned by Borrower is sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a valid waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations pursuant to any Loan Document; and

(b)any Lien held by Collateral Agent for the benefit of the Secured Parties against (i) any Collateral that is sold or otherwise disposed of by Borrower in a transaction permitted by the Loan Documents (including pursuant to a valid waiver or consent), (ii) any Collateral subject to a Lien that is expressly permitted under clause (c) of the definition of the term “Permitted Lien” and (iii) all of the Collateral and Borrower, upon (A) termination of all of the Term Loan Commitments, (B) the payment in full in cash of all of the Obligations (other than inchoate indemnity obligations for which no claim has been made), and (C) to the extent requested by Collateral Agent, receipt by Collateral Agent and Lenders of liability releases from Borrower in form and substance acceptable to Collateral Agent.

9.Setoff and Sharing of Payments.  In addition to any rights now or hereafter granted under any applicable Requirement of Law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default and subject to Section 10(d) of this Exhibit B, each Lender is hereby authorized at any time or from time to time upon the direction of Collateral Agent, without notice to Borrower or any other Person, any such notice being hereby expressly waived, to setoff and to appropriate and to apply any and all balances held by it at any of its offices for the account of Borrower (regardless of whether such balances are then due to Borrower) and any other properties or assets at any time held or owing by that Lender or that holder to or for the credit or for the account of Borrower against and on account of any of the Obligations that are not paid when due.  Any Lender exercising a right of setoff or otherwise receiving any payment on account of the Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share the amount so offset or otherwise received with each other Lender or holder in accordance with their respective Pro Rata Shares of the Obligations.  Borrower agrees, to the fullest extent permitted by law, that (a) any Lender may exercise its right to offset with respect to amounts in excess of its Pro Rata Share of the Obligations and may purchase participations in accordance with the preceding sentence and (b) any Lender so purchasing a participation in the Term Loans made or other Obligations held by other Lenders or holders may exercise all rights of offset, bankers’ liens, counterclaims or similar rights with respect to such participation as fully as if such Lender or holder were a direct holder of the Term Loans and the other Obligations in the amount of such participation.  Notwithstanding the foregoing, if all or any portion of the offset amount or payment otherwise received is thereafter recovered from the Lender that has exercised the right of offset, the purchase of participations by that Lender shall be rescinded and the purchase price restored without interest.

10.Advances; Payments; Non-Funding Lenders; Actions in Concert.

(a)Advances; Payments.  If Collateral Agent receives any payment with respect to a Term Loan for the account of the Lenders on or prior to 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on such Business Day.  If Collateral Agent receives any payment with respect to a Term Loan for the account of Lenders after 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on the next Business Day.

(b)Return of Payments.

(i)If Collateral Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Collateral Agent or on behalf of from Borrower and such related payment is not received by Collateral Agent, then Collateral Agent will be entitled to recover such amount (including interest accruing on such amount at the rate otherwise applicable to such Obligation) from such Lender on demand without setoff, counterclaim or deduction of any kind.

(ii)If Collateral Agent determines at any time that any amount received by Collateral Agent under any Loan Document must be returned to Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of any Loan Document, Collateral Agent will not be required to distribute any portion thereof to any Lender.  In addition, each Lender will repay to Collateral Agent on demand any portion of such amount that Collateral Agent has distributed to such Lender, together with interest at such rate, if any, as Collateral Agent is required to pay to Borrower or such other Person, without setoff, counterclaim or deduction of any kind and Collateral Agent will be entitled to set off against future distributions to such Lender any such amounts (with interest) that are not repaid on demand.

(c)Non-Funding Lenders.

(i)Unless Collateral Agent shall have received notice from a Lender prior to the date of any TermLoan that such Lender will not make available to Collateral Agent such Lender’s Pro Rata Share of such Term Loan, Collateral Agent may assume that such Lender will make such amount available to it on the date of such Term Loan in accordance with Section 2(b) of this Exhibit B, and Collateral Agent may (but shall not be obligated to), in reliance upon such assumption, make available a corresponding amount for the account of Borrower on such date.  If and to the extent that such Lender shall not have made such amount available to Collateral Agent, such Lender and Borrower severally agree to repay to Collateral Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the day such amount is made available to Borrower until the day such amount is repaid to Collateral Agent, at a rate per annum equal to the interest rate applicable to the Obligation that would have been created when Collateral Agent made available such amount to Borrower had such Lender made a corresponding payment available. If such Lender shall repay such corresponding amount to Collateral Agent, the amount so repaid shall constitute such Lender’s portion of such Term Loan for purposes of this Agreement.

(ii)To the extent that any Lender has failed to fund any Term Loan or any other payments required to be made by it under the Loan Documents after any such Term Loan is required to be made or such payment is due (a “Non-Funding Lender”), Collateral Agent shall be entitled to set off the funding short-fall against that Non-Funding Lender’s Pro Rata Share of all payments received from or on behalf of Borrower thereunder.  The failure of any Non‑Funding Lender to make any Term Loan or any payment required by it hereunder shall not relieve any other Lender (each such other Lender, an “Other Lender”) of its obligations to make such Term Loan, but neither any Other Lender nor Collateral Agent shall be responsible for the failure of any Non-Funding Lender to make such Term Loan or make any other payment required hereunder.  Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender” (or be included in the calculation of “Required Lenders” hereunder) for any voting or consent rights under or with respect to any Loan Document.  At Borrower’s request, Collateral Agent or a Person reasonably acceptable to Collateral Agent shall have the right with Collateral Agent’s consent and in Collateral Agent’s sole discretion (but Collateral Agent or any such Person shall have no obligation) to purchase from any Non-Funding Lender, and each Lender agrees that if it becomes a Non-Funding Lender it shall, at Collateral Agent’s request, sell and assign to Collateral Agent or such Person, all of the Term Loan Commitment (if any), and all of the outstanding Term Loan of that Non-Funding Lender for an amount equal to the aggregate outstanding principal balance of the Term Loan held by such Non-Funding Lender and all accrued interest with respect thereto through the date of sale, such purchase and sale to be consummated pursuant to an executed assignment agreement in form and substance reasonably satisfactory to, and acknowledged by, Collateral Agent.

(d)Actions in Concert.  Anything in this Agreement to the contrary notwithstanding, each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights arising out of any Loan Document (including exercising any rights of setoff) without first obtaining the prior written consent of Collateral Agent or Required Lenders, it being the intent of Lenders that any such action to protect or enforce rights under any Loan Document shall be taken in concert and at the direction or with the consent of Collateral Agent or Required Lenders.

EXHIBIT C

Loan Payment Request Form

Fax To:  (212) 993-1698Date: _____________________

Loan Payment:

ALIMERA SCIENCES, INC.

From Account #___________________________To Account #_____________________________________________

(Deposit Account #)(Loan Account #)

Principal $_______________________________and/or Interest $__________________________________________

Authorized Signature:Phone Number:

Print Name/Title:

Loan Advance:

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

From Account #_____________________________To Account #_________________________________________

(Loan Account #)(Deposit Account #)

Amount of Advance $___________________________

All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

Authorized Signature:Phone Number:

Print Name/Title:

Outgoing Wire Request:

Complete only if all or a portion of funds from the loan advance above is to be wired.

Beneficiary Name: _____________________________Amount of Wire: $

Beneficiary Bank: ______________________________Account Number:

City and State:

Beneficiary Bank Transit (ABA) #: Beneficiary Bank Code (Swift, Sort, Chip, etc.):

(For International Wire Only)

Intermediary Bank: Transit (ABA) #:

For Further Credit to:

Special Instruction:

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

Authorized Signature: ___________________________2nd Signature (if required): ______________________________

Print Name/Title: ______________________________Print Name/Title: ______________________________________

Telephone #: Telephone #:

EXHIBIT D

Compliance Certificate

TO:	SLR INVESTMENT CORP., as Collateral Agent and Lender
FROM:	ALIMERA SCIENCES, INC.

The undersigned authorized officer (“Officer”) of Alimera Sciences, Inc. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement dated as of December 31, 2019, by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

(a)Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;

(b)There are no defaults or Events of Default, except as noted below;

(c)Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.

(d)Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 6.4 of the Loan Agreement;

(e)No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

Attached are the required documents, if any, supporting our certification(s).  The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year‑end audit adjustments as to the interim financial statements.  To the extent any financial statements or SEC Reports required hereunder are included in materials filed with the SEC, they may be delivered electronically and if so delivered, shall be deemed to have been delivered or attached hereto on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.

Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.

	Reporting Covenant	Requirement	Actual	Complies
1)	Financial statements	Monthly within 30 days		Yes	No	N/A
2)	Annual (CPA Audited) statements	Within 90 days after FYE		Yes	No	N/A

3)	Annual Financial Projections/Budget (prepared on a monthly basis)	Annually (within earlier 30 days of approval or 60 days of FYE), and when revised		Yes	No	N/A
4)	A/R & A/P agings	If applicable		Yes	No	N/A
5)	8‑K, 10‑K and 10‑Q Filings	If applicable, within 5 days of filing		Yes	No	N/A
6)	Compliance Certificate	Monthly within 30 days		Yes	No	N/A
7)	Report detailing the IP	When required		Yes	No	N/A
8)	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period		$________	Yes	No	N/A
9)	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period		$________	Yes	No	N/A

Deposit and Securities Accounts

(Please list all accounts; attach separate sheet if additional space needed)

	Institution Name	Account Number	New Account?		Account Control Agreement in place?
1)			Yes	No	Yes	No
2)			Yes	No	Yes	No
3)			Yes	No	Yes	No
4)			Yes	No	Yes	No

Financial Covenants

Minimum Revenue (period ending _______)	Covenant Level	Actual	Complies
			Yes	No	N/A

Other Matters

1)	Have there been any changes in Key Persons since the last Compliance Certificate?	Yes	No
2)	Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?	Yes	No
3)	Have there been any new or pending claims or causes of action against Borrower that involve more than Two Hundred Fifty Thousand Dollars ($250,000)?	Yes	No
4)	Have there been any amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries?  If yes, provide copies of any such amendments or changes with this Compliance Certificate.	Yes	No

5)	Has Borrower or any Subsidiary entered into or amended any Material Agreement? If yes, please explain and provide a copy of the Material Agreement(s) and/or amendment(s).	Yes	No
6)	Has Borrower provided Collateral Agent with all notices required to be delivered under Sections 6.2(a) and 6.2(b) of the Loan Agreement?	Yes	No

Exceptions

Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.”  Attach separate sheet if additional space needed.)

ALIMERA SCIENCES, INC.

By:  

Name:  

Title:  

Date:

COLLATERAL AGENT USE ONLY
Received by:	Date:
Verified by:	Date:
Compliance Status:YesNo

Exhibit E

CORPORATE BORROWING CERTIFICATE

Borrower:	ALIMERA SCIENCES, INC.	Date:  [_____]
Lender:	SLR INVESTMENT CORP., as Collateral Agent and Lender

I hereby certify as follows, as of the date set forth above:

1.I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.

2.Borrower’s exact legal name is set forth above.  Borrower is a corporation existing under the laws of the State of Delaware.

3.Attached hereto as Appendix A and Appendix B, respectively, are true, correct and complete copies of (i) Borrower’s Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws.  Neither such Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof. 

4.The following resolutions were duly and validly adopted by Borrower’s board of directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.

[Balance of Page Intentionally Left Blank]

Resolved, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:

Name	Title	Signature	Authorized to Add or Remove Signatories
			□
			□
			□
			□

Resolved Further, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.

Resolved Further,  that such individuals may, on behalf of Borrower:

Borrow Money.  Borrow money from the Lenders.

Execute Loan Documents.  Execute any loan documents any Lender requires.

Grant Security.  Grant Collateral Agent a security interest in any of Borrower’s assets.

Negotiate Items.  Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.

Pay Fees.  Pay fees under the Loan Agreement or any other Loan Document.

Further Acts.  Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions.

Resolved Further, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.

[Balance of Page Intentionally Left Blank]

5.The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

By:

Name:

Title:

*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

I, the __________________________ of Borrower, hereby certify as to paragraphs 1 through 5 above, as

[print title]

of the date set forth above.

By:

Name:

Title:

[Signature Page to Corporate Borrowing Certificate]

Appendix A

Certificate of Incorporation (including amendments)

[see attached]

Appendix B

Bylaws

[see attached]

EXHIBIT F

ACH LETTER

SLR INVESTMENT CORP.

500 Park Avenue, 3rd Floor

New York, NY 10022

Attention: [____________]

Fax: (212) 993-1698

Email: [____________]

Re:  Loan and Security Agreement dated as of December 31, 2019 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time, the “Agreement”) by and among Alimera Sciences, Inc. (“Borrower”), SLR Investment Corp., a Maryland Corporation (formerly known as Solar Capital Ltd.) (“Solar”), as collateral agent (in such capacity, “Collateral Agent”) and the Lenders listed on Schedule 1.1 thereof or otherwise a party thereto from time to time, including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”).  Capitalized terms used but not otherwise defined herein shall have the meanings given them under the Agreement.

In connection with the above referenced Agreement, Borrower hereby authorizes Collateral Agent to, at its discretion and with prior notice of at least one (1) Business Day, initiate debit entries to Borrower’s account indicated below (i) on each payment date of all Obligations then due and owing, (ii) at any time any payment due and owing with respect to Lenders’ Expenses, and (iii) upon an Event of Default, any other Obligations outstanding, in each case pursuant to Section 2.3(e) of the Agreement.  The Borrower authorizes the depository institution named below to debit to such account.

Depository Name	Branch
City	State and Zip Code
Transit/ABA Number	Account Number

This authority will remain in full force and effect so long as any amounts are due under the Agreement.

[Signature page to follow]

ALIMERA SCIENCES, INC.

By: _________________________________________

Title: ________________________________________

Date: ________________________________________

EXHIBIT G

Form of Secured Promissory Note

SECURED PROMISSORY NOTE
(Term [A][B][C][d] Loan)

$____________________Dated:  [_____], 20[  ]

FOR VALUE RECEIVED, the undersigned, ALIMERA SCIENCES, INC., a Delaware corporation with offices located at 6120 Windward Parkway, Suite 290, Alpharetta, GA 30005 (“Borrower”) HEREBY PROMISES TO PAY to [___________] (“Lender”) or its registered assigns the principal amount of [___________] DOLLARS ($______________) or such lesser amount as shall equal the outstanding principal balance of the Term [A][B][C][d] Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term [A][B][C][d] Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated December 31, 2019 by and among Borrower, Lender, SLR Investment Corp., a Maryland corporation (formerly known as Solar Capital Ltd.), as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement.  Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

Principal, interest and all other amounts due with respect to the Term [A][B][C][d] Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”).  The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.

The Loan Agreement, among other things, (a) provides for the making of a secured Term [A][B][C][d] Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term [A][B][C][d] Loan, interest on the Term [A][B][C][d] Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

Borrower shall pay all fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, actually incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due subject to the terms of the Loan Agreement.

This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of New York.

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent.  Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation.  Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.

[Balance of Page Intentionally Left Blank]

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

BORROWER:

ALIMERA SCIENCES, INC.

By

Name:

Title:

LOAN AND PAYMENTS OF PRINCIPAL

Date Interest Rate [(include this column if floating interest based on time of drawing)] Principal Amount Scheduled PaymentAmount Notation By

Exhibit B

EX-10.4

Exhibit 10.4

OMNIBUS AMENDMENT TO EXIT FEE AGREEMENTS

THIS OMNIBUS AMENDMENT TO EXIT FEE AGREEMENTS (this “Amendment”), dated as of May 18,  2023 (the “SixthAmendment Effective Date”), is made by and among Alimera Sciences, Inc., a Delaware corporation (the “Borrower”), SLR Investment Corp. (formerly known as Solar Capital Ltd.) (“Solar”), in its capacity as collateral agent (together with its successors and assigns, in such capacity, “Collateral Agent”) and the Lenders listed on the signature pages hereto or otherwise a party to the Loan Agreement (as defined below) from time to time including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”).

The Borrower, the Lenders and Collateral Agent are parties to a Loan and Security Agreement dated as of December 31, 2019 (as amended by the First Amendment to Loan and Security Agreement, dated as of May 1, 2020, by that certain Second Amendment to Loan and Security Agreement dated as of March 30, 2021, by that certain Third Amendment to Loan and Security Agreement dated as of February 22, 2022, by that certain Fourth Amendment to Loan and Security Agreement dated as of December 7, 2022, by that certain Fifth Amendment to Loan and Security Agreement dated as of March 24, 2023, and as further amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Agreement”; and the Existing Agreement, as amended by the Sixth Amendment to Loan and Security Agreement dated as of the date hereof (the “Sixth Amendment”) and as further amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  In connection with the Existing Agreement, the Borrower and Collateral Agent entered into that certain Exit Fee Letter dated as of December 31, 2019  (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Existing EFA 2”, and as amended hereby, the “EFA 2”), and that certain Fifth Amendment Exit Fee Letter dated as of March 24, 2023 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time prior to the date hereof, “Existing EFA 3”and as amended hereby, the “EFA 3”).

The Borrower entered into that certain Exit Fee Agreement, by and among Solar, Borrower, and the Prior Lenders (as defined below), dated as of January 5, 2018 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time prior to the date hereof, the “Existing EFA 1”,and as amended hereby, the “EFA 1”, and the Existing EFA 1together with Existing EFA 2 and Existing EFA 3, collectively, the “Existing EFAs”, and EFA 1, EFA 2, and EFA 3, collectively, the “EFAs”), in connection with that certainLoan and Security Agreement, dated as of January 5, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to December 31, 2019, the “Prior Loan Agreement”) by and among Agent, the lenders party thereto from time to time prior to December 31, 2019, including Solar in its capacity as a lender (each a “Prior Lender” and collectively, the “Prior Lenders”), and the Borrower.  As a condition precedent to the Prior Lenders’ entry into the Prior Loan Agreement, the Prior Lenders required that the Borrower agree to pay to the Prior Lenders a fee upon the occurrence of certain events, as described in the Existing EFA 1.

Borrower has requested that the Lenders agree to certain amendments to each of the Existing EFAs.  The Lenders and the Prior Lenders have agreed to such request, subject to the terms and conditions hereof.

Accordingly, the parties hereto agree as follows:

SECTION 1 Definitions; Interpretation.

Terms Defined in Loan Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement or the Prior Loan Agreement, as applicable.

SECTION 2 Amendments to the Existing EFAs.

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(a) The Existing EFA 1 shall be amended as follows effective as of the Sixth Amendment Effective Date:

(i) Section 1.  Clauses (b) and (c) of Section 1 of the Existing EFA 1 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

(b) For purposes hereof, the “First Sales Milestone Event” shall mean the achievement of Borrower of the aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) fluocinolone acetonide intravitreal implants (marketed on the Effective Date as “Iluvien” and referred to herein as “Iluvien”), and (y) fluocinolone acetonide intravitreal implant (marketed as of the Sixth Amendment Effective Date as “YUTIQ®”), each measured on a trailing twelve (12) month basis during the term hereof, tested at the end of each month, equal to or greater than $80,000,000.

(c) For purposes hereof, the “Second Sales Milestone Event” shall mean the achievement of Borrower of the aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) Iluvien and (y) YUTIQ, each measured on a trailing twelve (12) month basis, tested at the end of each month, equal to or greater than $100,000,000 (inclusive of any revenues calculated for the First Sales Milestone Event). 

(i) Section 2.  Section 2 of the Existing EFA 1 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

2.Reporting.  Borrower. agrees to provide the Lenders (a) written notice of each Trigger Event as soon as practicable following the occurrence of such Trigger Event, but in any event not more than (i) three Business Days after any Exit Event and (ii) thirty (30) days after any Sales Milestone Event; (b) on and after the termination of the Loan Agreement, as soon as available, but no later than forty-five (45) days after the last day of each fiscal quarter, a company prepared consolidated and, if prepared by Borrower, consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its consolidated Subsidiaries for such quarter, certified by a Responsible Officer and in a form reasonably acceptable to Agent; and (c) if reasonably requested in writing by Agent in light of Borrower’s financial statements provided to the Lenders as required under clause (b), a statement reflecting Borrower’s revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) Iluvien and (y) YUTIQ, each measured on a trailing twelve (12) month basis during the term hereof, tested at the end of the preceding month, with such statement to be provided within thirty (30) days after such request. 

The Existing EFA 2 shall be amended as follows effective as of the Sixth Amendment Effective Date:

Section 1.  Clauses (b) and (c) of Section 1 of the ExistingEFA 2 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

(a) For purposes hereof, the “First Sales Milestone Event” shall mean the achievement of Borrower of the aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) fluocinolone acetonide intravitreal implants (marketed on the Effective Date as “ILUVIEN” and referred to herein as “ILUVIEN”), and (y) fluocinolone acetonide intravitreal implant (marketed as of the Sixth Amendment Effective Date as “YUTIQ®”) measured on a trailing twelve (12) month basis during the term hereof, tested at the end of each month, equal to or greater than $75,000,000.

For purposes hereof, the “Second Sales Milestone Event” shall mean the achievement of Borrower of the aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x)ILUVIEN, and (y) YUTIQ,

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each measured on a trailing twelve (12) month basis, tested at the end of each month, equal to or greater than $95,000,000 (inclusive of any revenues calculated for the First Sales Milestone Event).

Section 2.  Section 2 of the Existing EFA 2 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

2.Reporting.  Borrower agrees to provide the Lenders (a) written notice of each Trigger Event as soon as practicable following the occurrence of such Trigger Event, but in any event not more than (i) three Business Days after any Exit Event and (ii) thirty (30) days after any Sales Milestone Event; (b) on and after the termination of the Loan Agreement, as soon as available, but no later than forty-five (45) days after the last day of each fiscal quarter, a company prepared consolidated and, if prepared by Borrower, consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its consolidated Subsidiaries for such quarter, certified by a Responsible Officer and in a form reasonably acceptable to Agent; and (c) if reasonably requested in writing by Agent in light of Borrower’s financial statements provided to the Lenders as required under clause (b), a statement reflecting Borrower’s aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) ILUVIEN and (y) YUTIQ, each measured on a trailing twelve (12) month basis during the term hereof, tested at the end of the preceding month, with such statement to be provided within thirty (30) days after such request. 

(a) The Existing EFA 3 shall be amended as follows effective as of the Sixth Amendment Effective Date:

Section 1.  Clause (b) of Section 1 of the Existing EFA 3 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

(a) For purposes hereof, the “Sales Milestone Event” shall mean the achievement of Borrower of the aggregate revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) fluocinolone acetonide intravitreal implants (marketed on the Effective Date as “ILUVIEN” and referred to herein as “ILUVIEN”), and (y) fluocinolone acetonide intravitreal implant (marketed as of the Sixth Amendment Effective Date as “YUTIQ®”), each measured on a trailing twelve (12) month basis during the term hereof, tested at the end of each month, equal to or greater than $82,500,000.

(i) Section 2.  Section 2 of the Existing EFA 3 is hereby amended and restated as follows effective as of the Sixth Amendment Effective Date:

2.Reporting.  Borrower agrees to provide the Lenders (a) written notice of each Trigger Event as soon as practicable following the occurrence of such Trigger Event, but in any event not more than (i) three Business Days after any Exit Event and (ii) thirty (30) days after any Sales Milestone Event; (b) on and after the termination of the Loan Agreement, as soon as available, but no later than forty-five (45) days after the last day of each fiscal quarter, a company prepared consolidated and, if prepared by Borrower, consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its consolidated Subsidiaries for such quarter, certified by a Responsible Officer and in a form reasonably acceptable to Agent; and (c) if reasonably requested in writing by Agent in light of Borrower’s financial statements provided to the Lenders as required under clause (b), a statement reflecting Borrower’s revenues calculated in accordance with GAAP from the sale in the ordinary course of business to third party customers of (x) ILUVIEN and (y) YUTIQ, each measured on a trailing twelve (12) month basis during the term hereof, tested at the end of the preceding month, with such statement to be provided within thirty (30) days after such request.

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SECTION 3 Conditions of Effectiveness.  The effectiveness of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:

Fees and Expenses.  The Borrower shall have paid all fees, costs and expenses, if any, due and payable as of the Sixth Amendment Effective Date under the Loan Agreement.

This Amendment, Sixth Amendment to Loan Agreement.  Collateral Agent shall have received this Amendment, executed by Collateral Agent, the Lenders and the Borrower and a duly executed Sixth Amendment to the Loan Agreement in form and substance satisfactory to Collateral Agent.

Representations and Warranties; No Default.  On the SixthAmendment Effective Date, after giving effect to the amendmentsto the Existing EFAs contemplated hereby:

The representations and warranties contained in Section 4shall be true and correct in all material respects on and as of the Sixth Amendment Effective Date as though made on and as of such date; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

There exist no Events of Default or events that with the passage of time would reasonably be expected to result in an Event of Default.

SECTION 4 Representations and Warranties.  To induce the Lenders to enter into this Amendment, the Borrower hereby confirms, as of the date hereof, (a) that the representations and warranties made by it in Section 5 of the Loan Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (b) that there has not been and there does not exist a Material Adverse Change; and (c) that the information included in the Perfection Certificate delivered to Collateral Agent on the Effective Date (as supplemented on or prior to the Sixth Amendment Effective Date) remains true and correct. 

SECTION 5 Miscellaneous.

Loan Documents Otherwise Not Affected; Reaffirmation; No Novation.  Except as expressly amended pursuant hereto or referenced herein, the Loan Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.  The Lenders’ and Collateral Agent’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.  The Borrower hereby reaffirms the grant of security under Section 4.1 of the Loan Agreement and hereby reaffirms that such grant of security in the Collateral secures all Obligations under the Loan Agreement, including without limitation any Term Loans funded on or after the Sixth Amendment Effective Date, as of the date hereof.

Conditions.  For purposes of determining compliance with the conditions specified in Section 3, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Collateral Agent shall have received notice from such Lender prior to the SixthAmendment Effective Date specifying its objection thereto.

Release.  In consideration of the agreements of Collateral Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Collateral Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors,

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directors, officers, attorneys, employees, agents and other representatives (Collateral Agent, Lenders and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.  Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.  Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above. 

No Reliance.  The Borrower hereby acknowledges and confirms to Collateral Agent,  the Lenders, the Prior Agent, and the Prior Lenders, that the Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

[Reserved]. 

Binding Effect.  This Amendment binds and is for the benefit of the successors and permitted assigns of each party. 

Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES that would result in the application of any laws other than the laws OF the State of New York), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

Complete Agreement; Amendments; EFAs.  This Amendment, the Prior Loan Agreement, and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.  For the avoidance of doubt and notwithstanding anything to the contrary in this Amendment, Borrower (a) reaffirms its obligations under each of the Existing EFAs, including without limitation its obligation to pay the Exit Fee (as defined in each of the Existing EFAs and as amended hereby) if and when due thereunder, and (b) agrees that the defined term “Loan Agreement” as defined in the EFA 2 and EFA 3 shall on and after the SixthAmendment Effective Date mean the Loan Agreement as amended by this Amendment and as may be amended, restated or modified from time to time on or after the Sixth Amendment Effective Date.

Severability of Provisions.  Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.

Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.

Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.

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Electronic Execution of Certain Other Documents.  The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Amendment and the transactions contemplated hereby (including without limitation assignments, assumptions, amendments, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Collateral Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

[Balance of Page Intentionally Left Blank; Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.

BORROWER:

ALIMERA SCIENCES, INC.,
as Borrower

By:/s/ Rick Eiswirth

Name: Rick Eiswirth

Title: President and Chief Executive Officer___________________________________________________________________________________

[Signature Page to OmnibusAmendment to Exit Fee Agreement (Solar/Alimera)]

COLLATERAL AGENT:

SLR INVESTMENT CORP.,
as Collateral Agent and a Lender

By: /s/ Anthony Storino

Name:  Anthony Storino

Title:    Authorized Signatory

[Signature Page to Omnibus Amendment to Exit Fee Agreement (Solar/Alimera)]

LENDERS AND PRIOR LENDERS:

SUNS SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND BDC SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CREDIT INCOME BDC LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CORPORATE LENDING FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP PRIVATE CORPORATE LENDING FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

[Signature Page to OmnibusAmendment to Exit Fee Agreement (Solar/Alimera)]

SCP CAYMAN DEBT MASTER FUND SPV LLC

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP SF DEBT FUND LP

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SCP CAYMAN DEBT MASTER FUND L.P.

By: /s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

SLR CP SF DEBT FUND SPV LLC

By:/s/ Anthony Storino
Name:  Anthony Storino
Title:  Authorized Signatory

[Signature Page to Omnibus Amendment to Exit Fee Agreement (Solar/Alimera)]

EX-10.5

Exhibit 10.5

JOINDER AND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

This Joinder and Amendment to Registration Rights Agreement (this “Amendment”) dated as of May 17, 2023 (the “Amendment Effective Date”), between Alimera Sciences, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto, amends that certain Registration Rights Agreement (the “Registration Rights Agreement”) dated as of March 24, 2023, between the Company and the purchasers party thereto (the “Original Purchasers”).

WHEREAS, the Company and the Original Purchasers desire to amend the Registration Rights Agreement subject to and in accordance with the terms and conditions set forth in this Amendment, including to add the purchasers listed on Exhibit A hereto (each, including its successors and assigns, a “New Purchaser”, and collectively, the “New Purchasers”, and together with the Original Purchasers and their respective successors and assigns, each a “Purchaser” and collectively, the “Purchasers”) as parties to the Registration Rights Agreement, as amended as of the Amendment Effective Date.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Amendment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

1Definitions; Effectiveness.The Registration Rights Agreement shall be amended effective as of the Amendment Effective Date. The term “Agreement” as used in the Registration Rights Agreement shall at all times refer to the Registration Rights Agreement as modified by this Amendment.

2Amendments to Registration Rights Agreement.

2.1The New Purchasers shall be added as parties to the Registration Rights Agreement, effective as of the Amendment Effective Date, and all references to “Purchasers” in the Registration Rights Agreement shall include references to the New Purchasers.

2.2The first recital of the Registration Rights Agreement is hereby amended and restated in its entirety as follows:

“In connection with the Securities Purchase Agreement, by and among the Company and the Purchasers, dated as of March 24, 2023 (as may be amended and/or restated from time to time, the “Purchase Agreement”), the Company has agreed, upon the terms and conditions stated in the Purchase Agreement, to issue and sell to the Purchasers (i) shares of Series B Preferred Stock (the “Preferred Shares”), (ii) shares of Common Stock (the “Common Shares”) and (iii) warrants to purchase shares of Common Stock (subject to adjustment pursuant to the terms of the Warrants) (the “Warrant Shares”, together with the Preferred Shares and the Common Shares, the “Shares”).”

2.3The definition of “Filing Date” in the Registration Rights Agreement is hereby amended and restated in its entirety as follows:

““Filing Date” means July 1, 2023 or, in the case of any additional registration statements contemplated by Article II, the earliest practical date on which the Company is permitted by SEC Guidance to file such additional registration statements related to the Registrable Securities.”

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2.4The definition of “Registrable Securities” in the Registration Rights Agreement is hereby amended and restated in its entirety as follows:

““Registrable Securities” means (i) the Common Stock issued or issuable to the Purchasers uponconversion of the Preferred Shares (the “Conversion Shares”), (ii) the Warrant Shares issued or issuable to thePurchasers upon exercise of the Warrants, and (iii) any Common Stock of the Company issued or issuable withrespect to (A) the Tranche 2 Closing, or (B) the PreferredShares, the Conversion Shares and/or the Warrant Shares, as applicable, as a result of any stock split, stock dividend,recapitalization, exchange or similar event of otherwise, in each case, without regard to any limitations on theissuance of Common Stock pursuant to the Certificate of Designations or Warrants; provided,  however, that theapplicable Holder has completed and delivered to the Company a Selling Stockholder Questionnaire; and providedfurther that such securities shall no longer be deemed Registrable Securities if (a) such securities have been soldpursuant to a Registration Statement, (b) such securities have been sold in compliance with Rule 144, or (c) all suchsecurities may be sold without limitation or restriction pursuant to Rule 144.”

2.5Schedule 1 hereto hereby amends and restates in its entirety Schedule 1 attached to the Registration Rights Agreement.

3.Joinder.  The New Purchasers hereby agree to be subject to and bound by the terms and conditions of the Registration RightsAgreement and shall be deemed to be a party thereto as of the Amendment Effective Date.

4.Miscellaneous.

4.1Continued Validity of Registration Rights Agreement.  Except as amended hereby, the Registration Rights Agreement shall continue in full force and effect as originally constituted and is ratified and affirmed by the parties hereto.

4.2Headings. The headings herein are for convenience only, do not constitute a part of this Amendment and shall not be deemed to limit or affect any of the provisions hereof.

4.3Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

4.4Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be assignable by each Holder of all or a portion of the Registrable Securities if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the Registrable Securities with respect to which such registration rights are being transferred or assigned to such transferee or assignee, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with

2

the Company to be bound by all of the provisions of the Registration Rights Agreement, as amended, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns.

4.5Counterparts. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

4.6Governing Law; Jurisdiction. This Amendment and Proceeding or other matter relating hereto or thereto (or the negotiation hereof) shall be construed and enforced in accordance with the laws of the State of New York without giving effect to any conflicts of law rules or provisions that would compel the application of the substantive laws of another jurisdiction. All Proceedings arising out of or relating to this Amendment (or the negotiation hereof) shall be heard and determined exclusively in the courts of the State of New York located in the City and County of New York, Borough of Manhattan, and the appellate courts therefrom or, solely to the extent such courts lack jurisdiction, any federal court sitting in the State of New York and any appellate courts therefrom. Consistent with the preceding sentence, the parties hereto hereby (a) submit to the exclusive jurisdiction of such courts for the purpose of any such Proceeding brought by any party hereto and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Proceeding, any claim that it is not subject personally to the jurisdiction of the above named courts, that its property is exempt or immune from attachment or execution, that the Proceeding is brought in an inconvenient forum, that the venue of the Proceeding is improper, or that this Amendment or the transactions contemplated by this Amendment may not be enforced in or by any of the above named courts.

4.7Severability. If any provision hereof should be held invalid, illegal or unenforceable in any respect, then, to the fullest extent permitted by law, (a) all other provisions hereof shall remain in full force and effect and shall be liberally construed in order to carry out the intentions of the parties as nearly as may be possible and (b) the parties shall use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of such provision(s) in this Amendment.

4.8Construction. The headings herein are for convenience only, do not constitute a part of this Amendment and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Amendment will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

(Signature Pages Follow)

3

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

THE COMPANY:
Alimera Sciences, Inc.
By:/s/ Rick Eiswirth
Name:	Rick Eiswirth
Title:	Chief Executive Officer

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
VELAN CAPITAL MASTER FUND LP
By: Velan Capital Holdings LLC
Its: General Partner
By:/s/ Adam Morgan
Name:	Adam Morgan
Title:	Managing Member
VELAN CAPITAL SPV I LLC
By: Velan Capital Holdings LLC
Its: General Partner
By:/s/ Adam Morgan
Name:	Adam Morgan
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Account managed by Caligan Partners LP
By: Caligan Partners LP
Its: Investment Manager
By:/s/ David Johnson
Name:	David Johnson
Title:	Managing Member
Account managed by Caligan Partners LP
By: Caligan Partners LP
Its: Investment Manager
By:/s/ David Johnson
Name:	David Johnson
Title:	Managing Member
CALIGAN PARTNERS MASTER FUND LP
By: Caligan Partners LP
Its: Investment Manager
By:/s/ David Johnson
Name:	David Johnson
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
CALIGAN PARTNERS CV VI LP
By:/s/ David Johnson
Name:	David Johnson
Title:	Managing Member of General Partner
Account managed by Caligan Partners LP
By: Caligan Partners LP
Its: Investment Manager
By:/s/ David Johnson
Name:	David Johnson
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
WVP Emerging Manager Onshore Fund, LLC – Optimized Equity Series
By: AIGH Capital Management, LLC
Its: Sub-Advisor
By:	/s/ Orin Hirschman
Name:	Orin Hirschman
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
WVP Emerging Manager Onshore Fund, LLC – AIGH Series
By: AIGH Capital Management, LLC
Its: Sub-Advisor
By:	/s/ Orin Hirschman
Name:	Orin Hirschman
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
AIGH Investment Partners, L.P.
By: AIGH Capital Management, LLC
Its: Advisor
By:	/s/ Orin Hirschman
Name:	Orin Hirschman
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Altium Growth Fund, LP
By: Altium Capital Management, LP
Its: Investment Manager
By:	/s/ Mark Gottlieb
Name:	Mark Gottlieb
Title:	COO

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Clearline Capital Partners LP
By:	/s/ MarcMajzner
Name:	Marc Majzner
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Clearline Capital Partners Master Fund LP
By:	/s/ MarcMajzner
Name:	Marc Majzner
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Stonepine Capital, LP
By: Stonepine Capital Management, LLC
Its: General Partner
By:	/s/ Timothy P. Lynch
Name:	Timothy P. Lynch
Title:	Managing Member

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Alice Winzer Lytton Family LLC
By:	/s/ Laurence Lytton
Name:	Laurence Lytton
Title:	Managing Partner

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder and Amendment to Registration Rights Agreement to be duly executed by their respective authorized officers as of the date first above written.

PURCHASERS:
Lytton-Kambara Foundation
By:	/s/ Laurence Lytton
Name:	Laurence Lytton
Title:	President

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

Exhibit A

New Purchasers (Tranche 2)

Velan Capital SPV I LLC

Caligan Partners CV VI LP

Account managed by Caligan Partners LP

AIGH Investment Partners, LP

WVP Emerging Manager Onshore Fund, LLC – AIGH Series

WVP Emerging Manager Onshore Fund, LLC – Optimized Equity Series

Altium Growth Fund, LP

Clearline Capital Partners LP

Clearline Capital Partners Master Fund LP

Stonepine Capital, LP

Alice Winzer Lytton Family LLC

Lytton-Kambara Foundation

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

SCHEDULE 1
SCHEDULE OF PURCHASERS

Tranche 1

Name of Purchaser Entity	Shares of Series B Preferred Stock	Number of Warrants Purchased	Aggregate Purchase Price
Velan Capital Master Fund LP	6,000	2,857,143	$6,000,000
Account managed by Caligan Partners LP	2,100	1,000,000	$2,100,000
Account managed by Caligan Partners LP	1,400	666,667	$1,400,000
Caligan Partners LP, as investment manager for Caligan Partners Master Fund LP	2,500	1,190,476	$2,500,000
TOTAL:	12,000	5,714,286	$12,000,000

Tranche 2

Name of Purchaser Entity	Shares of Series B Preferred Stock	Shares of Common Stock	Aggregate Purchase Price
Velan Capital Master Fund LP	8,117	1,401,901	$10,500,000
Velan Capital SPV I LLC	7,000	-	$7,000,000
Account managed by Caligan Partners LP	2,625	-	$2,625,000
Account managed by Caligan Partners LP	1,750	-	$1,750,000
Caligan Partners Master Fund LP	1,550	-	$1,550,000
Caligan Partners CV VI LP	13,575	-	$13,575,000
Account managed by Caligan Partners LP	3,000	-	$3,000,000
AIGH Investment Partners, LP	3,000	-	$3,000,000
WVP Emerging Manager Onshore Fund, LLC – AIGH Series	786	-	$786,000
WVP Emerging Manager Onshore Fund, LLC – Optimized Equity Series	214	-	$214,000
Altium Growth Fund, LP	5,000	-	$5,000,000
Clearline Capital Partners LP	3,922	-	$3,922,130
Clearline Capital Partners Master Fund LP	1,078	-	$1,077,870
Stonepine Capital, LP	10,000	-	$10,000,000
Alice Winzer Lytton Family LLC	1,400	-	$1,400,000
Lytton-Kambara Foundation	3,600	-	$3,600,000
TOTAL:	66,617	1,401,901	$69,000,000

[SIGNATURE PAGE TO JOINDER AND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT]

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Richard S. Eiswirth, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Alimera Sciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2023	/s/ Richard S. Eiswirth, Jr.
	Richard S. Eiswirth, Jr.
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Russell L. Skibsted, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Alimera Sciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2023	/s/ Russell L. Skibsted
	Russell L. Skibsted
	Chief Financial Officer and Senior Vice President
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Alimera Sciences, Inc.(the Company), does hereby certify, to the best of such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended March31, 2023 (the Form 10-Q) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2023	/s/ Richard S. Eiswirth, Jr.
	Richard S. Eiswirth, Jr.
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: August 11, 2023	/s/ Russell L. Skibsted
	Russell L. Skibsted
	Chief Financial Officerand Senior Vice President
	(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 09, 2023
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Transition Report	false
Entity File Number	001-34703
Entity Registrant Name	Alimera Sciences, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0028718
Entity Address, Address Line One	6310 Town Square
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Alpharetta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30005
City Area Code	678
Local Phone Number	990-5740
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	ALIM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Smaller Reporting Company	true
Emerging Growth Company	false
Entity Shell Company	false
Entity common stock, shares outstanding (in shares)		8,801,727
Entity Central Index Key	0001267602
Amendment Flag	false
Document Fiscal Period Focus	Q2

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 18,775	$ 5,274
Restricted cash	32	30
Accounts receivable, net	22,589	19,612
Prepaid expenses and other current assets	3,571	2,892
Inventory	1,055	1,605
Total current assets	46,022	29,413
NON-CURRENT ASSETS:
Property and equipment, net	2,465	2,525
Right of use assets, net	1,277	1,395
Intangible assets, net	104,935	8,957
Deferred tax asset	131	129
Warrant asset	93	183
TOTAL ASSETS	154,923	42,602
CURRENT LIABILITIES:
Accounts payable	8,040	10,088
Accrued expenses	6,002	3,998
Notes payable		25,313
Finance lease obligations	203	333
Total current liabilities	14,245	39,732
NON-CURRENT LIABILITIES:
Notes payable, net of discount	63,954	18,683
Common stock warrants	3,471
Accrued licensor payments	21,079
Other non-current liabilities	5,944	4,995
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, $.01 par value — 150,000,000 shares authorized, 8,803,727 shares issued and outstanding at June 30, 2023 and 6,995,513 shares issued and outstanding at December 31, 2022	88	70
Additional paid-in capital	386,979	378,238
Accumulated deficit	(412,779)	(415,388)
Accumulated other comprehensive loss	(2,783)	(2,955)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	46,230	(20,808)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	154,923	42,602
Series A Preferred Stock [Member]
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock, $.01 par value — 10,000,000 shares authorized at June 30, 2023 and December 31, 2022:		$ 19,227
Series B Preferred Stock [Member]
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock, $.01 par value — 10,000,000 shares authorized at June 30, 2023 and December 31, 2022:	$ 74,725

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	8,803,727	6,995,513
Common stock, shares outstanding (in shares)	8,803,727	6,995,513
Series A Preferred Stock [Member]
Preferred stock, shares authorized (in shares)	0	1,300,000
Preferred stock, shares issued (in shares)	0	600,000
Preferred stock, shares outstanding (in shares)	0	600,000
Preferred stock, liquidation preference		$ 24,000
Series B Preferred Stock [Member]
Preferred stock, shares authorized (in shares)	78,617	0
Preferred stock, shares issued (in shares)	78,617	0
Preferred stock, shares outstanding (in shares)	78,617	0
Preferred stock, liquidation preference	$ 0

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Statements of Operations [Abstract]
REVENUE, NET	$ 17,538	$ 14,604	$ 31,084	$ 26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION	(2,425)	(2,166)	(4,453)	(3,846)
GROSS PROFIT	15,113	12,438	26,631	22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	3,648	3,932	7,812	7,515
GENERAL AND ADMINISTRATIVE EXPENSES	4,373	2,945	8,544	6,185
SALES AND MARKETING EXPENSES	6,434	6,865	12,238	13,718
DEPRECIATION AND AMORTIZATION	1,866	670	2,547	1,359
OPERATING EXPENSES	16,321	14,412	31,141	28,777
LOSS FROM OPERATIONS	(1,208)	(1,974)	(4,510)	(6,121)
INTEREST EXPENSE AND OTHER	(1,694)	(1,383)	(3,361)	(2,747)
UNREALIZED FOREIGN CURRENCY (LOSS) GAIN, NET	(7)	38	(20)	146
LOSS ON EXTINGUISHMENT OF DEBT	(1,079)		(1,079)
CHANGE IN FAIR VALUE OF WARRANT ASSET	(105)	221	(91)	(331)
CHANGE IN FAIR VALUE OF WARRANT LIABILITY	(5,911)		(5,911)
NET LOSS BEFORE TAXES	(10,004)	(3,098)	(14,972)	(9,053)
INCOME TAX PROVISION	(25)	(17)	(25)	(17)
NET LOSS	(10,029)	(3,115)	(14,997)	(9,070)
PREFERRED STOCK DIVIDENDS	(669)		(683)
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS	$ (10,698)	$ (3,115)	$ (15,680)	$ (9,070)
NET LOSS PER SHARE — Basic	$ (1.32)	$ (0.45)	$ (2.07)	$ (1.30)
NET LOSS PER SHARE — Diluted	$ (1.32)	$ (0.45)	$ (2.07)	$ (1.30)
WEIGHTED AVERAGE SHARES OUTSTANDING — Basic	8,093,640	6,999,707	7,565,868	6,995,247
WEIGHTED AVERAGE SHARES OUTSTANDING — Diluted	8,093,640	6,999,707	7,565,868	6,995,247

XML

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Statements of Comprehensive Loss [Abstract]
NET LOSS	$ (10,029)	$ (3,115)	$ (14,997)	$ (9,070)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustments		(923)	172	(1,279)
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME		(923)	172	(1,279)
COMPREHENSIVE LOSS	$ (10,029)	$ (4,038)	$ (14,825)	$ (10,349)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (14,997)	$ (9,070)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,547	1,359
Loss on extinguishment of debt	1,079
Unrealized foreign currency transaction gain, net	20	(146)
Amortization of debt discount and deferred financing costs	488	552
Stock-based compensation expense	442	581
Change in fair value of warrant asset	91	331
Change in fair value of warrant liability	5,911
Changes in assets and liabilities:
Accounts receivable	(2,859)	(1,725)
Prepaid expenses and other current assets	(539)	507
Inventory	559	942
Accounts payable	(2,066)	(880)
Accrued expenses and other current liabilities	202	(181)
Other long-term liabilities	917	(81)
Net cash used in operating activities	(8,205)	(7,811)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(171)	(41)
Purchase of intangible assets	(75,272)
Net cash used in investing activities	(75,443)	(41)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Series B Convertible Preferred Stock	78,339
Stock issuance costs	(509)
Proceeds from issuance of common stock	2,404	40
Issuance of debt	22,500
Payment of debt costs	(4,108)
Payment of finance lease obligations	(251)	(204)
Repurchase of Series A Preferred Stock	(938)
Repurchase of common stock	(314)
Net cash provided by (used in) financing activities	97,123	(164)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	28	(638)
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	13,503	(8,654)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period	5,304	16,544
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — End of period	18,807	7,890
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	3,136	2,145
Cash paid for income taxes	21	182
Supplemental schedule of noncash investing and financing activities:
Note payable end of term payment accrued but unpaid	3,375	$ 2,250
Intangible asset acquired but unpaid	$ 22,850

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock [Member] Common Class A [Member]	Common Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Additional Paid-In Capital [Member] Common Class A [Member]	Additional Paid-In Capital [Member] Series B Preferred Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member] Series A Preferred Stock [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Common Class A [Member]	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Total
Beginning balance (in shares) at Dec. 31, 2021		6,935,154	600,000
Beginning balance at Dec. 31, 2021		$ 69	$ 19,227				$ 377,229		$ (397,281)	$ (1,849)				$ (2,605)
Issuance of common stock, net of issuance costs (in shares)		57,500
Issuance of common stock, net of issuance costs		$ 1												1
Stock-based compensation expense							312							312
Net loss									(5,955)					(5,955)
Foreign currency translation adjustments										(356)				(356)
Ending balance (in shares) at Mar. 31, 2022		6,992,654	600,000
Ending balance at Mar. 31, 2022		$ 70	$ 19,227				377,541		(403,236)	(2,205)				(8,603)
Beginning balance (in shares) at Dec. 31, 2021		6,935,154	600,000
Beginning balance at Dec. 31, 2021		$ 69	$ 19,227				377,229		(397,281)	(1,849)				(2,605)
Net loss														(9,070)
Foreign currency translation adjustments														(1,279)
Ending balance (in shares) at Jun. 30, 2022		6,995,461	600,000
Ending balance at Jun. 30, 2022		$ 70	$ 19,227				377,847		(406,351)	(3,484)				(12,335)
Beginning balance (in shares) at Mar. 31, 2022		6,992,654	600,000
Beginning balance at Mar. 31, 2022		$ 70	$ 19,227				377,541		(403,236)	(2,205)				(8,603)
Issuance of common stock, net of issuance costs (in shares)		10,307
Issuance of common stock, net of issuance costs							39							39
Forfeitures of restricted stock (in shares)		(7,500)
Stock-based compensation expense							267							267
Net loss									(3,115)					(3,115)
Foreign currency translation adjustments										(923)				(923)
Ending balance (in shares) at Jun. 30, 2022		6,995,461	600,000
Ending balance at Jun. 30, 2022		$ 70	$ 19,227				377,847		(406,351)	(3,484)				(12,335)
Beginning balance (in shares) at Dec. 31, 2022		6,995,513	600,000
Beginning balance at Dec. 31, 2022		$ 70	$ 19,227				378,238		(415,388)	(2,955)				(20,808)
Issuance of common stock, net of issuance costs (in shares)		597,000
Issuance of common stock, net of issuance costs		$ 6					(6)
Repurchase of stock (in shares)	(200,919)		(600,000)
Repurchase of stock	$ (2)		$ (19,227)		$ (312)			$ 18,289			$ (314)	$ (938)
Issuance of Preferred stock - Series B (in shares)				12,000
Issuance of Preferred stock - Series B				$ 7,714									$ 7,714
Preferred stock dividends				$ 14					(14)
Stock-based compensation expense							226							226
Net loss									(4,968)					(4,968)
Foreign currency translation adjustments										172				172
Ending balance (in shares) at Mar. 31, 2023		7,391,594		12,000
Ending balance at Mar. 31, 2023		$ 74		$ 7,728			378,146		(402,081)	(2,783)				(18,916)
Beginning balance (in shares) at Dec. 31, 2022		6,995,513	600,000
Beginning balance at Dec. 31, 2022		$ 70	$ 19,227				378,238		(415,388)	(2,955)				(20,808)
Net loss														(14,997)
Foreign currency translation adjustments														172
Ending balance (in shares) at Jun. 30, 2023		8,803,727		78,617
Ending balance at Jun. 30, 2023		$ 88		$ 74,725			386,979		(412,779)	(2,783)				46,230
Beginning balance (in shares) at Mar. 31, 2023		7,391,594		12,000
Beginning balance at Mar. 31, 2023		$ 74		$ 7,728			378,146		(402,081)	(2,783)				(18,916)
Issuance of common stock, net of issuance costs (in shares)		1,415,133
Issuance of common stock, net of issuance costs		$ 14					34							$ 48
Issuance of Preferred stock - Series B (in shares)				66,617
Issuance of Preferred stock - Series B				$ 66,328		$ 2,355							$ 68,683
Forfeitures of restricted stock (in shares)		(3,000)
Stock option exercises (in shares)
Preferred stock dividends				$ 669					(669)
Stock-based compensation expense							217							$ 217
Forfeiture of common stock warrants							6,227							6,227
Net loss									(10,029)					(10,029)
Ending balance (in shares) at Jun. 30, 2023		8,803,727		78,617
Ending balance at Jun. 30, 2023		$ 88		$ 74,725			$ 386,979		$ (412,779)	$ (2,783)				$ 46,230

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Nature of Operations

6 Months Ended

Jun. 30, 2023

Nature of Operations [Abstract]

Nature of Operations

1. NATURE OF OPERATIONS

Alimera Sciences, Inc., together with its wholly owned subsidiaries (the Company), is a pharmaceutical company that specializes in the commercialization and development of ophthalmic pharmaceuticals. The Company was formed on June 4, 2003 under the laws of the State of Delaware.

The Company presently focuses on diseases affecting the retina, because the Company believes these diseases are not well treated with current therapies and affect millions of people globally. The Company’s products are ILUVIEN^® (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in 24 countries for the treatment of diabetic macular edema (DME), and YUTIQ^® (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the United States for the treatment and prevention of uveitis.

In the U.S. and certain other countries outside Europe, ILUVIEN is indicated for the treatment of DME in patients who have been previously treated with a course of corticosteroids and did not have a clinically significant rise in intraocular pressure. In 17 countries in Europe, ILUVIEN is indicated for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies. In addition, ILUVIEN has received marketing authorization in 17 European countries and reimbursement in ten countries for the prevention of relapse in recurrent non-infectious uveitis affecting the posterior segment (NIU-PS).

The Company markets ILUVIEN directly in the U.S., Germany, the U.K., Portugal and Ireland. In addition, the Company has entered into various agreements under which distributors are providing or will provide regulatory, reimbursement and sales and marketing support for ILUVIEN in Austria, Belgium, the Czech Republic, Denmark, Finland, France, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Australia, New Zealand and several countries in the Middle East. In addition, the Company has granted an exclusive license to Ocumension Therapeutics for the development and commercialization of the Company’s 0.19mg fluocinolone acetonide intravitreal injection in China, East Asia and the Western Pacific. As of June 30, 2023, the Company has recognized sales of ILUVIEN to its international distributors in the Middle East, China, Austria, Belgium, Czech Republic, France, Italy, Luxembourg, Spain, the Netherlands, and the Nordic Region.

In the U.S., YUTIQ is indicated for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. The Company has the rights to commercialize YUTIQ under a product rights agreement dated May 17, 2023 (the Product Rights Agreement) with EyePoint Pharmaceuticals, Inc. (EyePoint Parent) in the entire world, except Europe, the Middle East and Africa as the Company had previously licensed from EyePoint Pharmaceuticals US, Inc. (EyePoint) rights in those territories to certain products, which included YUTIQ (known as ILUVIEN® in Europe, the Middle East and Africa) for the prevention of relapse in recurrent non-infectious uveitis affecting the posterior segment. (See Note 17) The Product Rights Agreement also excludes any rights to YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint Parent and Ocumension Therapeutics.

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Basis of Presentation

6 Months Ended

Jun. 30, 2023

Basis of Presentation [Abstract]

Basis of Presentation

2. BASIS OF PRESENTATION

The Company has prepared the accompanying unaudited interim condensed consolidated financial statements and notes thereto (Interim Financial Statements) in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, these Interim Financial Statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying Interim Financial Statements reflect all adjustments, which include normal recurring adjustments, necessary to present fairly the Company’s interim financial information.

The accompanying Interim Financial Statements and related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022, and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 31, 2023 (the 2022 Form 10-K). The financial results for any interim period are not necessarily indicative of the expected financial results for the full year.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies followed for quarterly financial reporting are the same as those disclosed in the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2022. Certain of the Company’s more significant accounting policies adopted in the current year are as follows:

Acquisition of Intangible Assets

The Company accounts for the acquisition of pharmaceutical product licenses as an asset acquisition in accordance with FASB ASC 805 – Business Combinations (“ASC 805”). ASC 805 specifies that if substantially all of the fair value of the gross assets acquired in a transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business and is recorded as an asset acquisition. Under this model, the Company assigns the cost of the transaction to the acquired tangible assets, to the identified intangible assets and liabilities and any above or below-market contracts. The purchase price, including the direct amounts paid for the net assets in the transaction and any acquisition costs incurred that relate directly to the acquisition, is assigned based on the relative fair values of the assets acquired and liabilities assumed. The fair value of any identified intangible assets is determined at the acquisition date based on inputs and other factors based on market participants.

Adoption of New Accounting Standard

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. The standard became effective for the Company on January 1, 2023. The adoption of this ASU did not have a material impact on its financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this ASU require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

Accounting Standards Issued but Not Yet Effective

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard was available until December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company does not anticipate the adoption of this ASU will have a material impact on its financial statements.

 

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Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue Recognition [Abstract]

Revenue Recognition

4. REVENUE RECOGNITION

Overview

The Company recognizes revenue when a customer obtains control of the related good or service. The amount recognized reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606 Revenue from Contracts with Customers, the Company performs the following steps as outlined in the guidance: (1) identify the contract with the customer, (2) identify the performance obligations within the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the entity satisfies a performance obligation. At the inception of a contract, the contract is evaluated to determine if it falls within the scope of ASC 606, followed by the Company’s assessment of the goods or services promised within each contract, assessment of whether the promised good or service is distinct and determination of the performance obligations. The Company then recognizes revenue based on the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions related to the performance obligations.

Net Product Sales

The Company sells its products to major pharmaceutical distributors, pharmacies, hospitals and wholesalers (collectively, its Customers). In addition to distribution agreements with Customers, the Company enters into arrangements with healthcare providers and payors that provide for government-mandated and/or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s products. The Company recognizes revenues from product sales at a point in time when the Customer obtains control, typically upon delivery. The Company accrues for fulfillment costs when the related revenue is recognized. Taxes collected from Customers relating to product sales and remitted to governmental authorities are excluded from revenues.

Estimates of Variable Consideration

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for reserves related to statutory rebates to State Medicaid and other government agencies; commercial rebates and fees to Managed Care Organizations (MCOs), Group Purchasing Organizations (GPOs), distributors, and specialty pharmacies; product returns; sales discounts (including trade discounts); distributor costs; wholesaler chargebacks; and allowances for patient assistance programs relating to the Company’s sales of its products.

These reserves are based on estimates of the amounts earned or to be claimed on the related sales. Management’s estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and Customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in the net sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. If actual results vary, the Company may adjust these estimates, which could have an effect on earnings in the period of adjustment.

With respect to the Company’s international contracts with third-party distributors, certain contracts have elements of variable consideration, and management reviews those contracts on a regular basis and makes estimates of revenue based on historical ordering patterns and known market events and data. The amount of variable consideration included in net sales in each period could vary depending on the terms of these contracts and the probability of reversal in future periods.

Consideration Payable to Customers

Distribution service fees are payments issued to distributors for compliance with various contractually defined inventory management practices or services provided to support patient access to a product. Distribution service fees reserves are based on the terms of each individual contract and are classified within accrued expenses and are recorded as a reduction of revenue.

Product Returns

The Company’s policies provide for product returns in the following circumstances: (a) expiration of shelf life on certain products; (b) product damaged while in the Customer’s possession; and (c) following product recalls. Generally, returns for expired product are accepted three months before and up to one year after the expiration date of the related product, and the related product is destroyed after it is returned. The Company may, at its option, either refund the sales price paid by the Customer by issuing a credit or exchanging the returned product for replacement inventory. The Company typically does not provide cash refunds. The Company estimates the proportion of recorded revenue that will result in a return by considering relevant factors, including historical returns experience, the estimated level of inventory in the distribution channel, the shelf life of products and product recalls, if any.

The estimation process for product returns involves, in each case, several interrelating assumptions, which vary for each Customer. The Company estimates the amount of its product sales that may be returned by its Customers and records this estimate as a reduction of revenue from product sales in the period the related revenue is recognized, and because this returned product cannot be resold, there is no corresponding asset for product returns. Through the date of this report, product returns have been minimal.

License Revenue

The Company enters into agreements in which it licenses certain rights to its products to partner companies that act as distributors. The terms of these agreements may include payment to the Company of one or more of the following: non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions related to the performance obligations.

The Company will recognize sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606. For those milestone payments which are contingent on the occurrence of particular future events, the Company determines that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the expected value method. As such, the Company assesses each milestone to determine the probability of and substance behind achieving each milestone. Given the inherent uncertainty associated with these future events, the Company will not recognize revenue from such milestones until there is a high probability of occurrence, which typically occurs near or upon achievement of the event.

Customer Payment Obligations

The Company receives payments from its Customers based on billing schedules established in each contract, which vary across the Company’s locations, but generally range between 30 to 120 days. Occasionally, the Company offers extended payment terms or payment term discounts to certain Customers. Amounts are recorded as accounts receivable when the Company's right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation is that the Customer will pay for the product or services within one year or less of receiving those products or services.

 

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

5. LEASES

The Company evaluates all of its contracts to determine whether it is or contains a lease at inception. The Company reviews its contracts for options to extend, terminate or purchase any right of use assets and accounts for these, as applicable, at inception of the contract. Upon adoption of ASC 842, the Company elected the transition package of three practical expedients permitted within the standard. In accordance with the package of practical expedients, the Company did not reassess initial direct costs, lease classification or whether its contracts contain or are leases. The Company made an accounting policy election not to recognize right of use assets and liabilities for leases with a term of 12 months or less, or those that do not meet the Company’s capitalization threshold, unless the leases include options to renew or purchase the underlying asset that are reasonably certain to be exercised. Lease costs associated with those leases are recognized as incurred. The Company has also chosen the practical expedient that allows it to combine lease and non-lease components as a single lease component.

Lease renewal options are not recognized as part of the lease liability until the Company determines it is reasonably certain it will exercise any applicable renewal options. The Company has determined it is not reasonably certain it will exercise any applicable renewal options. The Company has not recorded any liability for renewal options in these Interim Financial Statements. The useful lives of leased assets as well as leasehold improvements, if any, are limited by the expected lease term.

Operating Leases

The Company’s operating lease activities primarily consist of leases for office space in the U.S., the U.K., Ireland, Portugal and Germany. Most of these leases include options to renew, with renewal terms generally ranging from one to eight years. The exercise of lease renewal options is at the Company’s sole discretion. Certain of the Company’s operating lease agreements include variable lease costs that are based on common area maintenance and property taxes. The Company expenses these payments as incurred. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information as of June 30, 2023 and December 31, 2022 for the Company’s operating leases is as follows:

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Right of use assets, net	$	1,277	$	1,395
Total lease assets	$	1,277	$	1,395
CURRENT LIABILITIES:
Accrued expenses	$	685	$	768
NON-CURRENT LIABILITIES:
Other non-current liabilities		2,029		2,267
Total lease liabilities	$	2,714	$	3,035

The Company’s operating lease cost for the three and six months ended June 30, 2023 was $256,000 and $405,000, respectively, and is included in general and administrative expenses in its condensed consolidated statement of operations. The Company’s operating lease cost for the three and six months ended June 30, 2022 was $134,000 and $272,000, respectively, and is included in general and administrative expenses in its condensed consolidated statement of operations.

As of June 30, 2023, a schedule of maturity of lease liabilities under all of the Company’s operating leases is as follows:

Years Ending December 31	(In thousands)
2023 (remaining)	$	354
2024		680
2025		474
2026		488
2027		503
Thereafter		1,052
Total		3,551
Less amount representing interest		(837)
Present value of minimum lease payments		2,714
Less current portion (as a portion of accrued expenses)		(685)
Non-current portion (as a portion of other non-current liabilities)	$	2,029

Cash paid for operating leases was $176,000 and $351,000 during the three and six months ended June 30, 2023, respectively. No right-of-use assets were obtained in connection with operating leases for the three and six months ended June 30, 2023. Cash paid for operating leases was $64,000 and $132,000 during the three and six months ended June 30, 2022, respectively. No right-of-use assets were obtained in connection with operating leases for the three and six months ended June 30, 2022.

As of June 30, 2023, the weighted average remaining lease terms of the Company’s operating leases was 6.0 years. The weighted average discount rate used to determine the lease liabilities was 9.5%.

Finance Leases

The Company’s finance lease activities primarily consist of leases for office equipment and automobiles. Property and equipment leases are capitalized at the lesser of fair market value or the present value of the minimum lease payments at the inception of the leases using the Company’s incremental borrowing rate. The Company’s finance lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information as of June 30, 2023 and December 31, 2022 for the Company’s finance leases is as follows:

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Property and equipment, net	$	384	$	366
Total lease assets	$	384	$	366
CURRENT LIABILITIES:
Finance lease obligations	$	203	$	333
NON-CURRENT LIABILITIES:
Other non-current liabilities		180		131
Total lease liabilities	$	383	$	464

Depreciation expense associated with property and equipment under finance leases was approximately $71,000 and $65,000 for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense associated with property and equipment under finance leases was approximately $123,000 and $155,000 for the six months ended June 30, 2023 and 2022, respectively. Interest expense associated with finance leases was $11,000 and $10,000 for the three months ended June 30, 2023 and 2022, respectively. Interest expense associated with finance leases was $22,000 and $21,000 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, a schedule of maturity of lease liabilities under finance leases, together with the present value of minimum lease payments, is as follows:

Years Ending December 31	(In thousands)
2023 (remaining)	$	178
2024		177
2025		114
2026		15
Total		484
Less amount representing interest		(101)
Present value of minimum lease payments		383
Less current portion		(203)
Non-current portion	$	180

Cash paid for finance leases was $132,000 and $251,000 during the three and six months ended June 30, 2023, respectively. The Company acquired $80,000 and $170,000 of property and equipment in exchange for finance leases during the three and six months ended June 30, 2023, respectively. Cash paid for finance leases was $167,000 and $175,000 during the three and six months ended June 30, 2022, respectively. No property or equipment was obtained in exchange for finance leases during the three and six months ended June 30, 2022.

As of June 30, 2023, the weighted average remaining lease terms of the Company’s finance leases was 0.8 years. The weighted average discount rate used to determine the finance lease liabilities was 9.9%.

 

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Going Concern

6 Months Ended

Jun. 30, 2023

Going Concern [Abstract]

Going Concern

6. GOING CONCERN

The accompanying Interim Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Interim Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has incurred recurring losses, negative cash flow from operations and has accumulated a deficit of $412,779,000 from the Company’s inception through June 30, 2023. As of June 30, 2023, the Company had approximately $18,807,000 in cash and cash equivalents. The Company’s ability to achieve profitability and positive cash flow depends on its ability to increase revenue and contain its expenses.

Further, the Company must maintain compliance with the debt covenants of its Loan and Security Agreement dated December 31, 2019 with SLR Investment Corp (SLR) and certain other lenders (as amended, the 2019 Loan Agreement). (See Note 10) If the Company were unable to comply with the Revenue Covenant (as defined in Note 10) at any time over the course of the next year, the lenders have the right to accelerate the maturity of the loan which would raise substantial doubt about the Company’s ability to continue as a going concern without access to alternative debt and/or equity financing, over the course of the next twelve months.

To meet the Company’s anticipated future working capital needs, in March and May 2023, the Company consummated equity financings and amended the 2019 Loan Agreement (See Note 10). The Company may in the future need to raise additional debt and/or equity financing. The source, timing, and availability of any future financing will depend upon market conditions and other factors that may be outside of the Company’s control. Funding may not be available when needed, at all, or on terms acceptable to the Company. Because of these factors and the requirement to satisfy the Revenue Covenant and the Company’s history of recurring losses and negative cash flow from operations, there may be doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued. However, the Company believes the current cash reserves and expected revenue from operations are sufficient to fund its operation for at least the next 12 months.

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Inventory

6 Months Ended

Jun. 30, 2023

Inventory [Abstract]

Inventory

7. INVENTORY

Inventory consisted of the following:

	June 30,		December 31,
	2023		2022
	(In thousands)
Component parts (1)	$	505	$	152
Work-in-process (2)		73		560
Finished goods		477		893
Total Inventory	$	1,055	$	1,605

(1)    Component parts inventory consists of manufactured components of the ILUVIEN applicator.

(2)    Work-in-process consists of completed units of ILUVIEN that are undergoing, but have not completed, quality assurance testing as required by U.S. or EEA regulatory authorities.

 

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Intangible Assets

6 Months Ended

Jun. 30, 2023

Intangible Assets [Abstract]

Intangible Assets

8. INTANGIBLE ASSETS

ILUVIEN Intangible Asset

As a result of the U.S. Food and Drug Administration’s (FDA) approval of ILUVIEN in September 2014, the Company was required to pay in October 2014 a milestone payment of $25,000,000 (the EyePoint Milestone Payment) to EyePoint, formerly known as pSivida US, Inc. (see Note 9).

The gross carrying amount of the intangible asset is $25,000,000, which is being amortized over approximately 13 years from the payment date. The amortization expense related to the intangible asset was approximately $484,000 for the three months ended June 30, 2023 and 2022, respectively. The amortization expense related to the intangible asset was approximately $962,000 for both the six months ended June 30, 2023 and 2022. The net book value of the intangible asset was $7,995,000 and $8,957,000 as of June 30, 2023 and December 31, 2022, respectively.

The estimated remaining amortization as of June 30, 2023 is as follows (in thousands):

Years Ending December 31	(In thousands)
2023 (remaining)	$	978
2024		1,946
2025		1,940
2026		1,940
2027		1,191
Total	$	7,995

YUTIQ Intangible Asset

On May 17, 2023 the Company was granted an exclusive and sublicensable right and license, pursuant to the Product Rights Agreement to commercialize YUTIQ for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, excluding any rights for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint and Ocumension Therapeutics. As a result, the Company paid EyePoint Parent an upfront payment of $75,000,000 and will make four quarterly additional guaranteed payments to EyePoint Parent totaling $7,500,000 in 2024 as well as royalties in 2025 through 2028 (see Note 17).

The gross carrying amount of the intangible asset is $98,122,000, which is being amortized over approximately 10 years from the initial payment date. The amortization expense related to the intangible asset was approximately $1,182,000 for the three and six months ended June 30, 2023. The net book value of the intangible asset was $96,940,000 as of June 30, 2023.

The estimated remaining amortization as of June 30, 2023 is as follows (in thousands):

Years Ending December 31	(In thousands)
2023 (remaining)	$	4,942
2024		9,831
2025		9,804
2026		9,804
2027		9,804
Thereafter		52,755
Total	$	96,940

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License Agreements

6 Months Ended

Jun. 30, 2023

License Agreements [Abstract]

License Agreements

9. LICENSE AGREEMENTS

EyePoint License Agreement

In February 2005, the Company entered into an agreement with EyePoint (formerly known as pSivida US, Inc.) for the use of fluocinolone acetonide (FAc) in EyePoint’s proprietary insert technology. This agreement was subsequently amended a number of times (as amended, the EyePoint Agreement). The EyePoint Agreement provides the Company with a worldwide exclusive license to utilize certain underlying technology used in the development and commercialization of ILUVIEN.

In July 2017, the Company amended and restated its EyePoint license agreement, which was made effective July 1, 2017 (the New Collaboration Agreement). Under the New Collaboration Agreement, the Company has the right to the technology underlying ILUVIEN for the treatment of (a) human eye diseases, including uveitis, in Europe, the Middle East, and Africa, and (b) human eye diseases other than uveitis worldwide. The New Collaboration Agreement converted the Company’s previous profit share obligation to a royalty payable on global net revenues of ILUVIEN.

Following the signing of the New Collaboration Agreement, the Company retained a right to recover up to $15,000,000 of commercialization costs that were incurred prior to profitability of ILUVIEN and to offset a portion of future payments owed to EyePoint with these accumulated commercialization costs, referred to as the Future Offset. Due to the uncertainty of future net profits, the Company has fully reserved the Future Offset in the accompanying Interim Financial Statements. In March 2019, pursuant to the New Collaboration Agreement, the Company forgave $5,000,000 of the Future Offset in connection with the approval of ILUVIEN for NIU-PS in the U.K. As of June 30, 2023, the balance of the Future Offset was approximately $6,762,000, which is fully reserved.

During the three and six months ended June 30, 2023 and 2022, the Company’s net royalty expense payable to EyePoint was 5.2%, which was reduced from 6% due to the recoverable balance of the Future Offset. The Company will be required to pay an additional 2% royalty on future global net revenues and other related consideration in excess of $75,000,000 in any year. During the three and six months ended June 30, 2023, the Company recognized approximately $463,000 and $857,000, respectively, of royalty expense, which is included in cost of goods sold, excluding depreciation and amortization. As of June 30, 2023, approximately $857,000 of this royalty expense was included in the Company’s accounts payable. During the three and six months ended June 30, 2022, the Company recognized approximately $758,000 and $1,375,000, respectively, of royalty expense which is included in cost of goods sold, excluding depreciation and amortization.

Ocumension License Agreement

On April 14, 2021, the Company entered into an exclusive license agreement (the License Agreement) with Ocumension (Hong Kong) Limited (Ocumension HK), a wholly owned subsidiary of Ocumension Therapeutics, for the development and commercialization under Ocumension HK’s own brand name(s), either directly or through its affiliates or approved third-party sublicensees, of the Company’s 0.19 mg fluocinolone acetonide intravitreal implant in applicator (the Product; currently marketed in the United States, Europe, and the Middle East as ILUVIEN®) for the treatment and prevention of eye diseases in humans, other than uveitis, in a specified territory. The Territory is defined as the People’s Republic of China, including Hong Kong SAR and Macau SAR, region of Taiwan, South Korea, Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The Company received a nonrefundable upfront payment of $10,000,000 from Ocumension HK and may in the future receive additional sales-based milestone payments totaling up to $89,000,000 upon the achievement by Ocumension HK of certain specified sales milestones during the term of the License Agreement. The Company’s receipt of future milestone payments depends upon whether Ocumension HK is able to successfully complete product development and commercialization in the Territory, which requires, among other things, obtaining necessary regulatory approvals and appropriate reimbursement pricing in the various countries and jurisdictions in the Territory, a process that may take several years. In 2021 the Company recognized $11,048,000 in license revenue from the Ocumension transaction (including the value of a warrant subscription agreement, which Alimera received as consideration, for Alimera to purchase 1,000,000 shares of Ocumension Therapeutics during a period of four years), in accordance with ASC 606, Revenue from Contracts with Customers, with the remaining approximate $300,000 in consideration classified as deferred revenue that will be recognized over the remaining term of the license agreement once Ocumension begins to sell products.

The term of the License will continue (a) until the 10th anniversary of the latest first commercial sale of the Product in any country or jurisdiction in the Territory or (b) for as long as Ocumension HK is commercializing the Product in any part of the Territory, whichever is later. The term is subject to the Company’s right to partially terminate the Agreement beginning on the 10th anniversary of the effective date with respect to any country or jurisdiction in the Territory in which Ocumension has not achieved at the time of termination first commercial sale and is not continuing to commercialize the Product. Ocumension will purchase Product from the Company at a fixed transfer price without royalty obligation on future sale (other than milestone payments as described above). Ocumension HK is responsible for all costs of development and commercialization in the Territory.

When the Company entered into the license agreement, it also entered into a share purchase agreement and a warrant subscription agreement, which are discussed in Note 16.

 

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Loan Agreements

6 Months Ended

Jun. 30, 2023

Loan Agreements [Abstract]

Loan Agreements

10. LOAN AGREEMENTS

Loan Agreements with SLR Investment Corp.

On January 5, 2018, the Company entered into a $40,000,000 loan and security agreement with Solar Capital Ltd., as Collateral Agent, and the parties signatory thereto from time to time as Lenders, including Solar Capital Ltd. in its capacity as a Lender (the 2018 Loan Agreement). On December 31, 2019, the Company refinanced the 2018 Loan Agreement by entering into a $45,000,000 loan and security agreement (the 2019 Loan Agreement) with SLR Investment Corp. (SLR, f/k/a Solar Capital Ltd.), as Agent, and the parties signing the Loan Agreement from time to time as Lenders, including SLR in its capacity as a Lender (collectively, the Lenders). The Company amended the 2019 Loan Agreement on March 24, 2023 (the Fifth Amendment) and entered into a related exit fee agreement with the Lenders. (See Note 21) Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) an additional tranche of $2,500,000 to increase the Company’s existing term loan facility to $47,500,000, subject to certain closing conditions, and (ii) extend a $15,000,000 additional term loan available to be funded at the Lender’s sole discretion.

Interest on the 2019 Loan Agreement prior to the Fifth Amendment was payable at an annual rate the greater of (i) one-month LIBOR or (ii) 1.78%, plus 7.65% per annum. Interest on the 2019 Loan Agreement following the Fifth Amendment is payable at an annual rate equal to 5.15% plus the greater of (i) 4.60% and (ii) one-month SOFR, which will reset monthly. As of March 31, 2023, the interest rate on the 2019 Loan Agreement was approximately 9.75%. The 2019 Loan Agreement provides for interest only payments until April 30, 2025, which may be extended an additional 12 months if the Company meets certain financial targets by March 31, 2025, followed by monthly payments of principal and interest through the loan maturity date of April 30, 2028.

2018 Exit Fee Agreement

Notwithstanding the repayment of the outstanding loan under the 2018 Loan Agreement, the Company remains obligated to pay additional fees under the Exit Fee Agreement (2018 Exit Fee Agreement) dated as of January 5, 2018 by and among the Company, SLR, as Agent, and the Lenders. The 2018 Exit Fee Agreement survived the termination of the 2018 Loan Agreement upon the repayment of the outstanding loan under the 2018 Loan Agreement and has a term of 10 years. The Company is obligated to pay up to, but no more than, $2,000,000 in fees under the 2018 Exit Fee Agreement.

Specifically, the Company is obligated to pay an exit fee of $2,000,000 on a “change in control” (as defined in the 2018 Exit Fee Agreement). To the extent that the Company has not already paid the $2,000,000 fee, the Company is also obligated to pay a fee of $1,000,000 on achieving each of the following milestones:

first, if the Company achieves revenues of $80,000,000 or more from the sale of its ILUVIEN product in the ordinary course of business to third party customers, measured on a trailing 12-month basis during the term of the agreement, tested at the end of each month; and

second, if the Company achieves revenues of $100,000,000 or more from the sale of its ILUVIEN product in the ordinary course of business to third party customers, measured in the same manner.

2019 Exit Fee Agreement

The Company is also obligated to pay additional fees under the Exit Fee Agreement dated as of December 31, 2019 by and among the Company, SLR as Agent, and the Lenders (2019 Exit Fee Agreement). The 2019 Exit Fee Agreement will survive the termination of the 2019 Loan Agreement and has a term of 10 years. The Company will be obligated to pay a $675,000 exit fee upon the occurrence of an exit event, which generally means a change in control, as defined in the 2019 Exit Fee Agreement.

2023 Exit Fee Agreement

On March 24, 2023, the Company entered into the Fifth Amendment Exit Fee Agreement (the New Exit Fee Agreement), which will survive the termination of the Amended Loan Agreement and has a term of 10 years. The Company will be obligated to pay an exit fee of 1.5% of the original principal amount funded under the Amended Loan Agreement upon the occurrence of an exit event, which generally means a change in control, as defined in the New Exit Fee Agreement. If the Company has not already paid the exit fee under the New Exit Fee Agreement, the Company is also obligated to pay an equivalent fee upon achieving revenues of $82,500,000 or more from the sale of ILUVIEN in the ordinary course of business to third party customers, measured on a trailing 12-month basis during the term of the New Exit Fee Agreement, tested at the end of each month. The Company’s existing 2015 and 2019 Exit Fee Agreements remain in effect. The fees payable pursuant to the Company’s existing exit fee agreements and the New Exit Fee Agreement, as amended by the Omnibus Amendment to Exit Fee Agreements dated as of May 17, 2023, will not exceed $3,387,500 in total.

Third Amendment to 2019 Loan Agreement

On February 22, 2022, the Company entered into a Third Amendment to the 2019 Loan Agreement (the Third Amendment), which, among other things:

(a)specified the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2022, that the Company must achieve for each such period (the Third Amendment Revenue Covenant);

(b)consented to the Company maintaining a lower minimum revenue amount under the Third Amendment Revenue Covenant for the trailing six-month period ended December 31, 2021 than previously required under the Loan Agreement (and waived any event of default that may have occurred or may be deemed to have occurred as a result of the Company’s lower revenue amount for that period); and 

(c)required that the Third Amendment Revenue Covenant be tested at March 31, 2023 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of the Company’s projected revenues in accordance with an annual plan submitted by the Company to the Collateral Agent by January 15 of such year, such plan to be thereafter approved by the Company’s board of directors and the Collateral Agent in its sole discretion no later than February 28 of such year.

Fourth Amendment to 2019 Loan Agreement

On December 7, 2022, the Company entered into a Fourth Amendment to the 2019 Loan Agreement (the Fourth Amendment), which, among other things:

(a)extends the amortization date from January 1, 2023 to April 1, 2023, provided that such date may be further extended to July 1, 2023 upon the Company’s request and in consultation with the Lenders, in each of the Lenders’ sole discretion;

(b)specifies the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023, that the Company must achieve for each such period (the Fourth Amendment Revenue Covenant); and

(c)requires that the Fourth Amendment Revenue Covenant be tested at March 31, 2023 and at the last day of each quarter thereafter, with the minimum revenue amount equal to a percentage of Alimera’s projected revenues in accordance with an annual plan submitted by the Company to the Collateral Agent by January 15th of such year, such plan to be thereafter approved by Alimera’s board of directors and the Collateral Agent in its sole discretion no later than February 28 of such year.

Fifth Amendment to 2019 Loan Agreement

On March 24, 2023, the Company entered into a Fifth Amendment to the 2019 Loan Agreement (the Fifth Amendment), under which the Lenders agreed to, among other things:

(a)an additional tranche of $2,500,000 to increase the Company’s existing term loan facility to $47,500,000, subject to certain closing conditions (the New Term Loan);

(b)extend a $15,000,000 additional term loan available to be funded at the Lender’s sole discretion;

(c)annual interest rate equal to 5.15% plus the greater of (i) 4.60%, and (ii) one-month SOFR, which will reset monthly, on the New Term Loan;

(d)extend the maturity date to April 30, 2028 and the interest-only period to April 30, 2025, which may be extended an additional 12 months if the Company meets certain financial targets by March 31, 2025; and

(e)specify the minimum revenue amount, calculated on a trailing six month basis beginning with the six month period ended March 31, 2023, and tested at the end of each calendar quarter, that the Company must achieve for each such period.

Sixth Amendment to 2019 Loan Agreement

On May 17, 2023, the Company entered into a Sixth Amendment to the 2019 Loan Agreement (the Sixth Amendment and the 2019 Loan Agreement as so amended, the Amended Loan Agreement), under which the Lenders agreed to, among other things:

(a)increase the amount available for an additional term loan under the facility from $15,000,000 to $20,000,000;

(b)fund the full amount of the additional term loan on May 17, 2023; and

(c)specify the minimum revenue amount, calculated on a trailing six-month basis and tested at the end of each calendar quarter in 2023 and 2024, that the Company must achieve for each such period (the Revenue Covenant).

The Company complied with the Revenue Covenant on June 30, 2023, expects to comply with the Revenue Covenant at the next reportable date, which is September 30, 2023, and the remainder of the Revenue Covenants through one year after these financial statements are issued.

Modification of Debt

In accordance with the guidance in ASC 470-50, Debt, the Company entered into and accounted for the Third Amendment, Fourth Amendment, and Fifth Amendment as modifications and expensed, as they were incurred, legal costs associated with third parties as costs of the modifications. The Company capitalized $113,000 of costs in connection with the Fourth Amendment. The Company did not capitalize any costs associated with the Third Amendment. The Company capitalized $2,625,000 of costs in connection with the Fifth Amendment.

Extinguishment of Debt

In accordance with the guidance in ASC 470-50, Debt, the Company entered into and accounted for the Sixth Amendment as an extinguishment of debt. The Company recognized a loss on extinguishment of $1,079,000 in connection with the Sixth Amendment.

Fair Value of Debt

The weighted average interest rates of the Company’s notes payable approximate the rate at which the Company could obtain alternative financing. Therefore, the carrying amount of the notes approximated their fair value at June 30, 2023 and December 31, 2022.

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Loss Per Share (EPS)

6 Months Ended

Jun. 30, 2023

Loss Per Share (EPS) [Abstract]

Loss Per Share (EPS)

11. LOSS PER SHARE (EPS)

The Company follows ASC 260, Earnings Per Share (ASC 260), which requires the reporting of both basic and diluted earnings per share. Because the Company’s preferred stockholders participate in dividends equally with common stockholders (if the Company were to declare and pay dividends), the Company uses the two-class method to calculate EPS. However, the Company’s preferred stockholders are not contractually obligated to share in losses. On August 1, 2023, the Company’s stockholders approved the issuance of shares of common stock upon conversion of the Series B Preferred and the issuance of shares of common stock upon exercise of certain warrants. The Company set August 15, 2023 as the date for the Mandatory Conversion (as defined in Note 19).

Basic EPS is computed by dividing net income or loss available to stockholders by the weighted average number of shares outstanding for the period. Diluted EPS is calculated in accordance with ASC 260 by adjusting weighted average shares outstanding for the dilutive effect of common stock options and warrants the Company has issued. In periods where a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be anti-dilutive.

Common stock equivalent securities that would potentially dilute basic EPS in the future, but were not included in the computation of diluted EPS because they were either not classified as participating or would have been anti-dilutive, were as follows:

	June 30,
	2023		2022
Series A convertible preferred stock		—		601,504
Series B convertible preferred stock		45,272,874		—
Common stock warrants		1,600,000		—
Stock options		1,217,045		1,310,465
Total		48,089,919		1,911,969

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Preferred Stock

6 Months Ended

Jun. 30, 2023

Preferred Stock [Abstract]

Preferred Stock

12. PREFERRED STOCK

Securities Purchase Agreement

On March 24, 2023, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with certain investors (the Original Investors) for the sale of up to 27,000 shares of the Company’s newly designated Series B Convertible Preferred Stock, par value $0.01 per share (the Series B Preferred Stock) and warrants (the Warrants) to purchase up to 5,714,286 shares of the Company’s common stock, for an aggregate purchase price of $12,000,000. On March 24, 2023 (the Tranche 1 Closing Date), the Company issued and sold an aggregate of 12,000 shares of Series B Preferred Stock at a per-share purchase price of $1,000 (the Stated Value) and the Warrants for aggregate gross proceeds of $12,000,000 (the Tranche 1 Closing). The proceeds from the Tranche 1 Closing were used to fund development and commercialization of the Company’s existing and potential future pipeline drugs, maintenance of the Company’s credit facility and corporate purposes substantially related to the commercialization of the Company’s existing and pipeline drugs, as well as the Repurchase (as defined below).

The initial conversion price of the shares of Series B Preferred Stock issued at the Tranche 1 Closing is $2.10 (the Tranche 1 Conversion Price). The conversion price of the Series B Preferred Stock is subject to certain customary adjustments, including a weighted average anti-dilution adjustment.

Unless and until stockholder approval to issue the common stock underlying the Series B Preferred Stock is obtained (Stockholder Approval), the Series B Preferred Stock will not be convertible into common stock to the extent that such conversion would cause (i) the aggregate number of shares of common stock that would be issued pursuant to the Purchase Agreement and the transactions contemplated thereby to exceed 1,401,901 (19.99% of the voting power or number of shares of common stock, issued and outstanding immediately prior to the execution of the Purchase Agreement), which number will be reduced, on a share-for-share basis, by the number of shares of common stock issued or issuable pursuant to any transactions that may be aggregated with the transactions contemplated by the Purchase Agreement under applicable Nasdaq rules (the Exchange Cap); or (ii) the aggregate number of shares of common stock that would be issued pursuant to such conversion, when aggregated with any shares of common stock then beneficially owned by the holder (or group of holders required to be aggregated) of such shares, would result in (a) a “change of control” under applicable Nasdaq listing rules (the Change of Control Cap) or (b) such holder or a “person” or “group” to beneficially own in excess of 9.99% of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion (the Ownership Limitation).

The Series B Preferred Stock will be entitled to receive dividends and other distributions pro rata with the common stock. In addition, prior to conversion, dividends will accrue on the Series B Preferred Stock at an annual rate of 6% of the Stated Value, accruing daily. The Series B Preferred Stock is not redeemable.

The Warrants have an exercise price equal to the Tranche 1 Conversion Price (as adjusted pursuant to the Certificate of Designation of the Series B Preferred Stock through the date of Stockholder Approval) and expire seven years from the date of the Tranche 1 Closing. The Warrants are exercisable upon the earlier of (a) a change of control and (b) March 24, 2024; provided that prior to Stockholder Approval, exercise of the Warrants is subject to the Ownership Limitation, the Change of Control Cap and the Exchange Cap.

Joinder and Amendment to Securities Purchase Agreement

On May 17, 2023, Alimera entered into a joinder and amendment (the Purchase Agreement Amendment) to the Purchase Agreement. The Purchase Agreement Amendment added certain investors as parties to the Purchase Agreement with respect to the Tranche 2 Closing (as defined below) and amended certain provisions of the Purchase Agreement. Pursuant to the amended Purchase Agreement, on May 17, 2023, the Company issued 66,617 shares of Series B Preferred at the Stated Value and 1,401,901 shares of common stock, for aggregate gross proceeds of $69.0 million (the Tranche 2 Closing). The initial conversion price of the shares of Series B Preferred issued at the Tranche 2 Closing was $1.70. Further, pursuant to the terms of the Purchase Agreement Amendment, the Company and the Original Investors agreed to reduce the number of shares of common stock issuable upon exercise of the Warrants to 1,600,000. The proceeds from the Tranche 2 Closing were utilized by Alimera to fund a portion of the upfront cash payment due upon execution of the Product Rights Agreement.

At June 30, 2023, the Series B Preferred Stock had $683,000 of cumulative dividends in arrears ($5.00 per share). On August 1, 2023, the Company received Stockholder Approval (see Note 19).

Series A Convertible Preferred Stock

In October 2012, the Company closed its preferred stock financing in which it sold units consisting of 1,000,000 shares of Series A Convertible Preferred Stock (Series A Preferred Stock) and warrants (which expired on October 1, 2017) to purchase 300,000 shares of Series A Preferred Stock for gross proceeds of $40,000,000, prior to the payment of approximately $560,000 of related issuance costs. The powers, preferences and rights of the Series A Preferred Stock are set forth in the certificate of designation for the Series A Preferred Stock filed by the Company with the Delaware Secretary of State as part of the Company’s certificate of incorporation. As of December 31, 2022, there were 600,000 shares of Series A Convertible Preferred Stock issued and outstanding.

As a condition to entering into the Purchase Agreement, the Company repurchased 200,919 shares of common stock and 600,000 shares of its Series A Preferred Stock held by the holders thereof (the Repurchase), for an aggregate purchase price of approximately $1,252,000. The holders of the Series A Preferred Stock were entitled to a liquidation preference before the holders of common stock would be entitled to receive any consideration in the event of the Company’s liquidation. As of December 31, 2022, the Series A Preferred Stock aggregate liquidation preference was $24,000,000. As a result of the Repurchase, no shares of the Series A Preferred Stock remain outstanding and the liquidation preference is no longer in effect. Following the Repurchase, the Company filed a certificate of elimination of the Series A Preferred Stock with the Secretary of State of the State of Delaware.

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Equity Incentive Plans

6 Months Ended

Jun. 30, 2023

Equity Incentive Plans [Abstract]

Equity Incentive Plans

13. EQUITY INCENTIVE PLANS

Under the Company’s 2019 Omnibus Incentive Plan (the 2019 Plan), the Compensation Committee of the Board is authorized to grant equity-based incentive awards that include stock options, restricted stock units and shares of restricted stock to officers, directors, employees and contractors. Equity-based awards are also outstanding under the Company’s 2010 Equity Incentive Plan, although no new awards can be granted under that plan. The Company also has an employee stock purchase plan.

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Stock Options

During the three months ended June 30, 2023 and 2022, the Company recorded compensation expense related to stock options of approximately $148,000 and $218,000, respectively. During the six months ended June 30, 2023 and 2022, the Company recorded compensation expense related to stock options of approximately $315,000 and $476,000, respectively. As of June 30, 2023, the total unrecognized compensation cost related to non-vested stock options granted was $895,000 and is expected to be recognized over a weighted average period of 2.3 years. The following table presents a summary of stock option activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,216,953	18.03		1,315,161	19.39
Grants		17,321	2.55		1,700	4.34
Forfeitures and expirations		(17,229)	45.18		(6,396)	15.58
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.77		$	2.94

The following table presents a summary of stock option activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,175,339	19.03		1,075,795	23.35
Grants		117,723	2.70		285,250	4.96
Forfeitures and expirations		(76,017)	19.41		(50,580)	21.51
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.86		$	3.32

The following table provides additional information related to outstanding stock options as of June 30, 2023:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,217,045		17.43		5.57 years		24
Exercisable		893,401		22.07		4.50 years		7
Outstanding, vested and expected to vest		1,182,115		17.81		5.48 years		22

The following table provides additional information related to outstanding stock options as of December 31, 2022:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,175,339		19.03		5.68 years		—
Exercisable		878,115		23.62		4.72 years		—
Outstanding, vested and expected to vest		1,139,482		19.46		5.58 years		—

As of June 30, 2023, 52,283 shares remain available for grant under the 2019 Plan. On August 1, 2023, the Company’s stockholders approved the Alimera Sciences, Inc. 2023 Equity Incentive Plan (Note 19).

Restricted Stock and Restricted Stock Units (RSUs)

The following table presents a summary of restricted stock and RSU activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		685,176		1.67		94,063		5.29
Grants		—		—		—		—
Vested restricted stock and RSUs		—		—		(7,500)		8.93
Forfeitures		(3,000)		1.35		—		—
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

The following table presents a summary of restricted stock and RSU activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		73,594		4.98		46,250		5.65
Grants		632,050		1.39		57,500		4.96
Vested restricted stock and RSUs		(20,468)		4.98		(9,687)		5.01
Forfeitures		(3,000)		1.35		(7,500)		8.93
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

Employee stock-based compensation expense related to restricted stock and RSUs recognized in accordance with ASC 718, Compensation - Stock Compensation (ASC 718) was $62,000 and $43,000 for the three months ended June 30, 2023 and 2022, respectively. Employee stock-based compensation expense related to restricted stock and RSUs recognized in accordance with ASC 718, Compensation - Stock Compensation (ASC 718) was $109,000 and $89,000 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the total unrecognized compensation cost related to restricted stock and RSUs was $1,120,000 and is expected to be recognized over a weighted average period of 3.62 years.

Employee Stock Purchase Plan

During each of the three months ended June 30, 2023 and 2022, the Company recorded compensation expense related to its employee stock purchase plan of approximately $7,000. During the six months ended June 30, 2023 and 2022, the Company recorded compensation expense related to its employee stock purchase plan of approximately $18,000, and $15,000, respectively. 

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Taxes [Abstract]

Income Taxes

14. INCOME TAXES

In accordance with ASC 740, Income Taxes, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities at the enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a valuation allowance against its net deferred tax asset to reduce the net carrying value to an amount that is more likely than not to be realized. At the end of each interim period, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year. This estimate reflects, among other items, the Company’s best estimate of operating results and foreign currency exchange rates.

The Company also applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions. The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world.

For the six months ended June 30, 2023, the Company has not recorded income tax expense or benefit. No tax benefit is expected to be realized for the losses in the United States and the United Kingdom due to the ongoing losses and valuation allowances in these jurisdictions. Tax expense or benefit for income and losses in other jurisdictions (Ireland, Germany, and Portugal) are immaterial for the period.

At December 31, 2022, the Company had U.S. federal NOL carry-forwards of approximately $147,200,000 and state NOL carry-forwards of approximately $107,700,000 available to reduce future taxable income, subject to limitation based upon the results of the Company’s analyses under Internal Revenue Code Sections 382 and 383. The Company’s U.S. federal NOL carry-forwards remain fully reserved as of June 30, 2023. If not utilized, the federal NOL carry-forwards will expire at various dates between 2029 and 2037, the Company’s federal NOL created in 2018 and onward will carry forward indefinitely and the state NOL carry-forwards will expire at various dates between 2023 and 2042.

NOL carry-forwards may be subject to annual limitations under Internal Revenue Code Sections 382 and 383 in the event that certain changes in ownership of the Company were to occur. The Company has not yet completed a formal evaluation of the impact of the issuance of the Company’s Series B Preferred Stock in March and May of 2023 on the Company’s NOL carry-forwards and whether certain changes in ownership have occurred that would limit the Company’s ability to utilize a portion of its NOL carry-forwards.

As of December 31, 2022, the Company’s U.K. subsidiary is in a net deferred tax asset position primarily due to the step up in tax basis for intangible assets created by the transfer of intellectual property from the Netherlands to the U.K. Based upon the expected pattern of reversal of deferred taxes, it is not more likely than not that these deferred tax assets will be realized. As such, a full valuation allowance is placed against the net deferred tax assets of the U.K. subsidiary. The Company’s Irish subsidiary has a deferred tax asset for net operating loss carryforwards. The Company expects this net operating loss carryforward to be fully realizable in the future based upon the Company’s control of the transfer pricing arrangements. A valuation allowance is not recorded on the deferred tax assets of the Ireland subsidiary. Deferred tax considerations for all other foreign entities are immaterial to the financial statements.

Effective January 1, 2022, for U.S. tax purposes research and development costs, including software development costs, are required to be capitalized and will be deductible over five years for costs incurred domestically and over fifteen years for costs incurred in a foreign country. Additionally, the first year of amortization requires that amortization begin with the midpoint of the taxable year. As of December 31, 2022, the Company recorded a deferred tax asset of approximately $969,000 related to capitalized research and development costs. This deferred tax asset is fully reserved with a valuation allowance.

On August 16, 2022, the President of the United States signed the Inflation Reduction Act (IRA) into law. The IRA enacted a 15% corporate minimum tax effective in 2024, a 1% tax on share repurchases after December 31, 2022, and created and extended certain tax-related energy incentives. The Company does not currently expect the tax-related provisions of the IRA to have a material effect on its financial results.

The Company anticipates that its foreign subsidiaries will be profitable and have earnings in the future. Once the foreign subsidiaries have earnings, the Company intends to indefinitely reinvest in its foreign subsidiaries all undistributed earnings and original investments in such subsidiaries. As a result, the Company does not expect to record deferred tax liabilities in the future related to excesses of book over tax basis in the stock of its foreign subsidiaries in accordance with ASC 740-30-25.

Tax years from 2018 to 2020 remain subject to examination in California, Georgia, Kentucky, Tennessee, Texas and on the federal level, with the exception of the assessment of NOL carry-forwards available for utilization, which can be examined for all years since 2009. The statute of limitations on these years will close when the NOLs expire or when the statute closes on the years in which the NOLs are utilized.

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Segment Information

6 Months Ended

Jun. 30, 2023

Segment Information [Abstract]

Segment Information

15. SEGMENT INFORMATION

During the three months ended June 30, 2023 and 2022, two customers within the U.S. segment that are large pharmaceutical distributors accounted for 68% and 61% of the Company’s consolidated product revenues, respectively. During the six months ended June 30, 2023 and 2022, two customers within the U.S. segment that are large pharmaceutical distributors accounted for 63% and 60% of the Company’s consolidated product revenues, respectively. These same two customers within the U.S. segment accounted for approximately 71% of the Company’s consolidated accounts receivable at June 30, 2023 and at December 31, 2022

The Chief Executive Officer (CEO), who is the Company’s chief operating decision maker, has determined that the Company’s operations are managed as three operating segments: U.S., International and Operating Cost. The Company determined that each of these operating segments represented a reportable segment. In monitoring performance, aligning strategies and allocating resources, the chief operating decision maker manages and evaluates the Company’s U.S., International and Operating Cost segments based on segment income or loss from operations adjusted for certain non-cash items, such as stock-based compensation expense and depreciation and amortization. Therefore, the Company classifies within Other (a) the non-cash expenses included in research, development and medical affairs expenses; general and administrative expenses; and sales and marketing expenses; and (b) depreciation and amortization.

The Company’s U.S. and International segments represent the sales and marketing, general and administrative and research and development activities dedicated to the respective geographies. The Operating Cost segment primarily represents the general and administrative and research and development activities not specifically associated with the U.S. or International segments and includes expenses such as executive management; information technology administration and support; legal; compliance; clinical studies; and business development.

Each of the Company’s U.S., International and Operating Cost segments is separately managed and is evaluated primarily upon segment income or loss from operations. Other is presented to reconcile to the Company’s consolidated totals. The Company does not report balance sheet information by segment because the chief operating decision maker does not review that information. The Company allocates certain operating expenses among its reporting segments based on activity-based costing methods. These activity-based costing methods require the Company to make estimates that affect the amount of each expense category that is attributed to each segment. Changes in these estimates will directly affect the amount of expense allocated to each segment and therefore the operating profit of each reporting segment.

The following tables present a summary of the Company’s reporting segments for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	11,876	$	5,662	$	—	$	—	$	17,538
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,290)		(1,135)		—		—		(2,425)
GROSS PROFIT		10,586		4,527		—		—		15,113
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,748		842		1,033		25		3,648
GENERAL AND ADMINISTRATIVE EXPENSES		1,101		510		2,619		143		4,373
SALES AND MARKETING EXPENSES		4,781		1,379		225		49		6,434
DEPRECIATION AND AMORTIZATION		—		—		—		1,866		1,866
OPERATING EXPENSES		7,630		2,731		3,877		2,083		16,321
SEGMENT INCOME (LOSS) FROM OPERATIONS		2,956		1,796		(3,877)		(2,083)		(1,208)
OTHER INCOME AND EXPENSES, NET		—		—		—		(8,796)		(8,796)
NET LOSS BEFORE TAXES									$	(10,004)

	Three Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	8,943	$	5,661	$	—	$	—	$	14,604
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,060)		(1,106)		—		—		(2,166)
GROSS PROFIT		7,883		4,555		—		—		12,438
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,281		807		1,799		45		3,932
GENERAL AND ADMINISTRATIVE EXPENSES		195		468		2,112		170		2,945
SALES AND MARKETING EXPENSES		4,568		2,112		133		52		6,865
DEPRECIATION AND AMORTIZATION		—		—		—		670		670
OPERATING EXPENSES		6,044		3,387		4,044		937		14,412
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,839		1,168		(4,044)		(937)		(1,974)
OTHER INCOME AND EXPENSES, NET		—		—		—		(1,124)		(1,124)
NET LOSS BEFORE TAXES									$	(3,098)

The following tables present a summary of the Company’s reporting segments for the six months ended June 30, 2023 and 2022:

	Six Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	19,456	$	11,628	$	—	$	—	$	31,084
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(2,195)		(2,258)		—		—		(4,453)
GROSS PROFIT		17,261		9,370		—		—		26,631
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,910		1,589		3,266		47		7,812
GENERAL AND ADMINISTRATIVE EXPENSES		2,205		1,227		4,814		298		8,544
SALES AND MARKETING EXPENSES		9,056		2,794		291		97		12,238
DEPRECIATION AND AMORTIZATION		—		—		—		2,547		2,547
OPERATING EXPENSES		14,171		5,610		8,371		2,989		31,141
SEGMENT INCOME (LOSS) FROM OPERATIONS		3,090		3,760		(8,371)		(2,989)		(4,510)
OTHER INCOME AND EXPENSES, NET		—		—		—		(10,462)		(10,462)
NET LOSS BEFORE TAXES									$	(14,972)

	Six Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	15,863	$	10,639	$	—	$	—	$	26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,875)		(1,971)		—		—		(3,846)
GROSS PROFIT		13,988		8,668		—		—		22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,451		1,723		3,259		82		7,515
GENERAL AND ADMINISTRATIVE EXPENSES		511		892		4,393		389		6,185
SALES AND MARKETING EXPENSES		9,242		4,116		250		110		13,718
DEPRECIATION AND AMORTIZATION		—		—		—		1,359		1,359
OPERATING EXPENSES		12,204		6,731		7,902		1,940		28,777
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,784		1,937		(7,902)		(1,940)		(6,121)
OTHER INCOME AND EXPENSES, NET		—		—		—		(2,932)		(2,932)
NET INCOME BEFORE TAXES									$	(9,053)

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Other Agreements with Ocumension

6 Months Ended

Jun. 30, 2023

Other Agreements with Ocumension [Abstract]

Other Agreements with Ocumension

16. OTHER AGREEMENTS WITH OCUMENSION

Share Purchase Agreement

On April 14, 2021, the Company entered into a Share Purchase Agreement with Ocumension Therapeutics, pursuant to which the Company offered and sold to Ocumension 1,144,945 shares of common stock (the Shares), at a purchase price of $8.734044 per Share. The number of Shares sold was equal to 19.9% of the number of shares of common stock outstanding immediately before the closing.

The aggregate gross proceeds from the sale of the Shares were $10,000,000. The Company has used the net proceeds from the sale of the Shares to continue to commercialize ILUVIEN® and for general corporate purposes, which may include working capital, capital expenditures, other clinical trial expenditures, acquisitions of new technologies, products or businesses in ophthalmology, and investments.

Ocumension is entitled to certain purchase rights if the Company elects to offer or sell new securities in either a private or public offering.

Warrant Subscription Agreement

On April 14, 2021, the Company entered into a warrant agreement with Ocumension Therapeutics pursuant to which Ocumension agreed to issue to the Company 1,000,000 non-transferable warrants granting the Company the right for a period of four years to subscribe to up to an aggregate of 1,000,000 shares of Ocumension stock at the subscription price of HK$23.88 per warrant share (or US$3.07 per warrant share as converted to U.S. Dollars at the exchange rate on April 9, 2021 of 0.12853 U.S. Dollars per HK$), subject to adjustment. (The converted rate is for illustrative purposes only; if the Company exercises the warrants, it will pay the subscription price of HK$23.88 per warrant share in HK$.) The warrants were issued on August 13, 2021, pursuant to the terms of the warrant agreement. The warrants are not and will not be listed on any stock exchange.

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Other Agreements with Eyepoint Parent and Eyepoint

6 Months Ended

Jun. 30, 2023

Other Agreements with Eyepoint Parent and Eyepoint [Abstract]

Other Agreements with Eyepoint Parent and Eyepoint

17. OTHER AGREEMENTS WITH EYEPOINT PARENT AND EYEPOINT

Product Rights Agreement

On May 17, 2023 the Company entered into the Product Rights Agreement with EyePoint Parent whereby the Company was granted an exclusive and sublicensable (in accordance with the terms of the Product Rights Agreement) right and license (the License) certain of EyePoint Parent’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa. The License also excludes any rights to YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye in China and certain other countries and regions in Asia, which rights are subject to a pre-existing exclusive license between EyePoint and Ocumension Therapeutics.

Additionally, pursuant to the Product Rights Agreement, EyePoint Parent will transfer and assign to the Company certain assets and certain contracts with third parties related to YUTIQ, including the new drug application #210331 for YUTIQ.

As a result, the Company paid EyePoint Parent an upfront payment of $75,000,000 and will make four quarterly guaranteed payments to EyePoint Parent totaling $7,500,000 in 2024. The Company will also pay royalties to EyePoint Parent from 2025 to 2028 at a percentage of mid-to-low double digits of the Company’s annual U.S. net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $70,000,000 in 2025, increasing annually thereafter. Upon the Company’s payment of the upfront payment and the guaranteed payments, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.

The Company also entered into a transition services agreement with EyePoint Parent under which EyePoint Parent has agreed to temporarily provide certain transition services to the Company on a cost-plus pricing arrangement following the closing date.

The total purchase consideration was $98,122,000, which has been recorded as an intangible asset, and includes the upfront payment of $75,000,000 as well as the guaranteed payments and estimated future royalties discounted to their fair value as of the transaction date of $7,085,000 and $15,765,000 respectively. The discounted fair values of the guaranteed payments and estimated future royalties were recorded as liabilities within the consolidated balance sheet on the transaction date as represented below.

	June 30, 2023
	(In thousands)
Assets:
Product rights intangible asset	$	98,122
Liabilities:
Accrued expenses		1,771
Accrued licensor payments		21,079

The Company concluded, based on the acquisition of a single asset due to substantially all of the value being concentrated in the Product Rights Agreement, lack of acquired employees and manufacturing, as well as absence of certain other inputs and acquired processes, that the transaction did not qualify as a business and therefore, recorded the acquisition of the License as an asset acquisition in accordance with ASC 805. Under ASC 805, the fair value cost of the net assets purchased is allocated, based on their relative fair value, to the acquired tangible assets and identified intangible assets and liabilities in accordance with U.S. GAAP.

The gross carrying amount of the intangible asset is $98,122,000, which is being amortized over approximately 10 years from the initial payment date (See Note 8). Acquisition costs associated with the acquisition of $272,000 were capitalized into the total purchase price of the transaction.

Commercial Supply Agreement

In connection with the Product Rights Agreement, the Company entered into a commercial supply agreement (the Supply Agreement) with EyePoint Parent pursuant to which, during the term of the Product Rights Agreement, EyePoint Parent will be responsible for manufacturing and exclusively supplying (subject to certain exceptions) to the Company agreed-upon quantities of YUTIQ necessary for Alimera to commercialize YUTIQ in the United States at certain cost plus amounts, subject to adjustments set forth in the Supply Agreement.

EyePoint Parent’s manufacture and supply to Alimera of YUTIQ under the Supply Agreement will be exclusive (subject to certain exceptions set forth in the Supply Agreement) until Alimera has the right and ability to manufacture and supply YUTIQ for commercialization in the United States.

The Company may elect to manufacture YUTIQ after an initial 18-month term following the closing date upon the satisfaction of certain conditions.

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Fair Value

6 Months Ended

Jun. 30, 2023

Fair Value [Abstract]

Fair Value

18. FAIR VALUE

The Company applies ASC 820, Fair Value Measurements, in determining the fair value of certain assets and liabilities. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. The hierarchy of those valuation approaches is broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The following fair value table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

	June 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	93	$	—	$	93
Assets measured at fair value	$	—	$	93	$	—	$	93
Liabilities:
Common stock warrant liability (1)	$	—	$	3,471	$	—	$	3,471
Liabilities measured at fair value	$	—	$	3,471	$	—	$	3,471

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	183	$	—	$	183
Assets measured at fair value	$	—	$	183	$	—	$	183
Liabilities:
Common stock warrant liability (1)	$	—	$	—	$	—	$	—
Liabilities measured at fair value	$	—	$	—	$	—	$	—

(1) The Company uses the Black-Scholes pricing model and assumptions that consider, among other variables, the fair value of the underlying stock, risk-free interest rate, volatility, expected life and dividend rates in estimating fair value for the warrants considered to be derivative instruments. Changes in this value each reporting period are reported in the condensed consolidated statement of operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

19. SUBSEQUENT EVENTS

Pre-Funded Warrants

On August 1, 2023, the Company amended the Certificate of Designation of Series B Convertible Preferred Stock. Prior to such amendment, the Certificate of Designation provided that the Series B Preferred would automatically convert at the then-applicable conversion price (Mandatory Conversion) in full into common stock following Stockholder Approval. As amended, the Certificate of Designation provides that the Company may issue pre-funded common stock warrants (Pre-Funded Warrants) to certain holders of Series B Preferred that elected to receive Pre-Funded Warrants prior to Stockholder Approval in lieu of a portion of common stock that would otherwise be issued in the Mandatory Conversion to such holders. The Pre-Funded Warrants have an exercise price of $0.01 per share. The Pre-Funded Warrants were offered to holders of Series B Preferred whose Mandatory Conversion of Series B Preferred would otherwise result in such holders, together with their affiliates and certain related parties, beneficially owning more than 9.99% of the outstanding common stock immediately following Mandatory Conversion the opportunity to purchase, if such holders so chose prior to Stockholder Approval, Pre-Funded Warrants, in lieu of shares of common stock that would otherwise result in such holder’s beneficial ownership exceeding 9.99% of the outstanding common stock.

Stockholder Approvals

On August 1, 2023, the Company’s stockholders provided Stockholder Approval, and the Company set August 15, 2023 as the date for the Mandatory Conversion. On August 1, 2023, the Company’s stockholders also approved the 2023 Equity Incentive Plan (the date of such approval, the Effective Date), which replaces the 2019 Plan. No new awards will be granted under the 2019 Plan. The 2023 Equity Incentive Plan has a share reserve equal to the sum of (a) 3,231,755 shares of common stock, (b) shares that are subject to awards granted under the 2019 Plan that are outstanding on or after the Effective Date and that are subsequently forfeited, cancelled, expire or lapse unexercised or unsettled or are reacquired by the Company, (c) the number of shares reserved under the 2019 Plan that are not issued or subject to outstanding awards under the 2019 Plan on the Effective Date, and (d) the increase in shares described in the next sentence. On the first anniversary of the Effective Date, the number of shares of common stock that may be issued under the 2023 Equity Incentive Plan will increase by a number of shares equal to 6% of the number of outstanding shares of common stock (assuming full conversion of the Series B Preferred into common stock).

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Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Acquisition of Intangible Assets

Acquisition of Intangible Assets

The Company accounts for the acquisition of pharmaceutical product licenses as an asset acquisition in accordance with FASB ASC 805 – Business Combinations (“ASC 805”). ASC 805 specifies that if substantially all of the fair value of the gross assets acquired in a transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business and is recorded as an asset acquisition. Under this model, the Company assigns the cost of the transaction to the acquired tangible assets, to the identified intangible assets and liabilities and any above or below-market contracts. The purchase price, including the direct amounts paid for the net assets in the transaction and any acquisition costs incurred that relate directly to the acquisition, is assigned based on the relative fair values of the assets acquired and liabilities assumed. The fair value of any identified intangible assets is determined at the acquisition date based on inputs and other factors based on market participants.

Adoption of New Accounting Standard and Accounting Standards Issued but Not Yet Effective

Adoption of New Accounting Standard

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. The standard became effective for the Company on January 1, 2023. The adoption of this ASU did not have a material impact on its financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this ASU require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

Accounting Standards Issued but Not Yet Effective

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard was available until December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company does not anticipate the adoption of this ASU will have a material impact on its financial statements.

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Summary of Operating Leases Supplemental Balance Sheet Information

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Right of use assets, net	$	1,277	$	1,395
Total lease assets	$	1,277	$	1,395
CURRENT LIABILITIES:
Accrued expenses	$	685	$	768
NON-CURRENT LIABILITIES:
Other non-current liabilities		2,029		2,267
Total lease liabilities	$	2,714	$	3,035

Schedule of Future Minimum Operating Lease Payments

Years Ending December 31	(In thousands)
2023 (remaining)	$	354
2024		680
2025		474
2026		488
2027		503
Thereafter		1,052
Total		3,551
Less amount representing interest		(837)
Present value of minimum lease payments		2,714
Less current portion (as a portion of accrued expenses)		(685)
Non-current portion (as a portion of other non-current liabilities)	$	2,029

Summary of Finance Leases Supplemental Balance Sheet Information

	June 30,		December 31,
	2023		2022
	(In thousands)
NON-CURRENT ASSETS:
Property and equipment, net	$	384	$	366
Total lease assets	$	384	$	366
CURRENT LIABILITIES:
Finance lease obligations	$	203	$	333
NON-CURRENT LIABILITIES:
Other non-current liabilities		180		131
Total lease liabilities	$	383	$	464

Schedule of Future Minimum Finance Lease Payments

Years Ending December 31	(In thousands)
2023 (remaining)	$	178
2024		177
2025		114
2026		15
Total		484
Less amount representing interest		(101)
Present value of minimum lease payments		383
Less current portion		(203)
Non-current portion	$	180

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Inventory (Tables)

6 Months Ended

Jun. 30, 2023

Inventory [Abstract]

Schedule of Inventory

	June 30,		December 31,
	2023		2022
	(In thousands)
Component parts (1)	$	505	$	152
Work-in-process (2)		73		560
Finished goods		477		893
Total Inventory	$	1,055	$	1,605

(1)    Component parts inventory consists of manufactured components of the ILUVIEN applicator.

(2)    Work-in-process consists of completed units of ILUVIEN that are undergoing, but have not completed, quality assurance testing as required by U.S. or EEA regulatory authorities.

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

License Agreement [Member]

Finite-Lived Intangible Assets [Line Items]

Future Amortization

Years Ending December 31	(In thousands)
2023 (remaining)	$	978
2024		1,946
2025		1,940
2026		1,940
2027		1,191
Total	$	7,995

YUTIQ Intangible Asset [Member]

Finite-Lived Intangible Assets [Line Items]

Future Amortization

Years Ending December 31	(In thousands)
2023 (remaining)	$	4,942
2024		9,831
2025		9,804
2026		9,804
2027		9,804
Thereafter		52,755
Total	$	96,940

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Loss Per Share (EPS) (Tables)

6 Months Ended

Jun. 30, 2023

Loss Per Share (EPS) [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	June 30,
	2023		2022
Series A convertible preferred stock		—		601,504
Series B convertible preferred stock		45,272,874		—
Common stock warrants		1,600,000		—
Stock options		1,217,045		1,310,465
Total		48,089,919		1,911,969

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Equity Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2023

Equity Incentive Plans [Abstract]

Summary of Stock Option Transactions

The following table presents a summary of stock option activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,216,953	18.03		1,315,161	19.39
Grants		17,321	2.55		1,700	4.34
Forfeitures and expirations		(17,229)	45.18		(6,396)	15.58
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.77		$	2.94

Summary of Additional Stock Option Transactions

The following table presents a summary of stock option activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
			Weighted			Weighted
			Average			Average
			Exercise			Exercise
	Options		Price ($)	Options		Price ($)
Options outstanding at beginning of period		1,175,339	19.03		1,075,795	23.35
Grants		117,723	2.70		285,250	4.96
Forfeitures and expirations		(76,017)	19.41		(50,580)	21.51
Exercises		—	—		—	—
Options outstanding at period end		1,217,045	17.43		1,310,465	19.39
Options exercisable at period end		893,401	22.07		887,543	25.91
Weighted average per share fair value of options granted during the period	$	1.86		$	3.32

The following table provides additional information related to outstanding stock options as of June 30, 2023:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,217,045		17.43		5.57 years		24
Exercisable		893,401		22.07		4.50 years		7
Outstanding, vested and expected to vest		1,182,115		17.81		5.48 years		22

The following table provides additional information related to outstanding stock options as of December 31, 2022:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price ($)		Term		Value ($)
							(In thousands)
Outstanding		1,175,339		19.03		5.68 years		—
Exercisable		878,115		23.62		4.72 years		—
Outstanding, vested and expected to vest		1,139,482		19.46		5.58 years		—

Summary of Restricted Stock Transactions

The following table presents a summary of restricted stock and RSU activity for the three months ended June 30, 2023 and 2022:

	Three Months Ended
	June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		685,176		1.67		94,063		5.29
Grants		—		—		—		—
Vested restricted stock and RSUs		—		—		(7,500)		8.93
Forfeitures		(3,000)		1.35		—		—
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

The following table presents a summary of restricted stock and RSU activity for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023				2022
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value ($)		Shares		Fair Value ($)
Restricted stock and RSUs outstanding at beginning of period		73,594		4.98		46,250		5.65
Grants		632,050		1.39		57,500		4.96
Vested restricted stock and RSUs		(20,468)		4.98		(9,687)		5.01
Forfeitures		(3,000)		1.35		(7,500)		8.93
Restricted stock and RSUs outstanding at period end		682,176		1.67		86,563		4.98

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2023

Segment Information [Abstract]

Summary of Operations by Segment

	Three Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	11,876	$	5,662	$	—	$	—	$	17,538
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,290)		(1,135)		—		—		(2,425)
GROSS PROFIT		10,586		4,527		—		—		15,113
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,748		842		1,033		25		3,648
GENERAL AND ADMINISTRATIVE EXPENSES		1,101		510		2,619		143		4,373
SALES AND MARKETING EXPENSES		4,781		1,379		225		49		6,434
DEPRECIATION AND AMORTIZATION		—		—		—		1,866		1,866
OPERATING EXPENSES		7,630		2,731		3,877		2,083		16,321
SEGMENT INCOME (LOSS) FROM OPERATIONS		2,956		1,796		(3,877)		(2,083)		(1,208)
OTHER INCOME AND EXPENSES, NET		—		—		—		(8,796)		(8,796)
NET LOSS BEFORE TAXES									$	(10,004)

	Three Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	8,943	$	5,661	$	—	$	—	$	14,604
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,060)		(1,106)		—		—		(2,166)
GROSS PROFIT		7,883		4,555		—		—		12,438
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		1,281		807		1,799		45		3,932
GENERAL AND ADMINISTRATIVE EXPENSES		195		468		2,112		170		2,945
SALES AND MARKETING EXPENSES		4,568		2,112		133		52		6,865
DEPRECIATION AND AMORTIZATION		—		—		—		670		670
OPERATING EXPENSES		6,044		3,387		4,044		937		14,412
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,839		1,168		(4,044)		(937)		(1,974)
OTHER INCOME AND EXPENSES, NET		—		—		—		(1,124)		(1,124)
NET LOSS BEFORE TAXES									$	(3,098)

The following tables present a summary of the Company’s reporting segments for the six months ended June 30, 2023 and 2022:

	Six Months Ended
	June 30, 2023
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	19,456	$	11,628	$	—	$	—	$	31,084
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(2,195)		(2,258)		—		—		(4,453)
GROSS PROFIT		17,261		9,370		—		—		26,631
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,910		1,589		3,266		47		7,812
GENERAL AND ADMINISTRATIVE EXPENSES		2,205		1,227		4,814		298		8,544
SALES AND MARKETING EXPENSES		9,056		2,794		291		97		12,238
DEPRECIATION AND AMORTIZATION		—		—		—		2,547		2,547
OPERATING EXPENSES		14,171		5,610		8,371		2,989		31,141
SEGMENT INCOME (LOSS) FROM OPERATIONS		3,090		3,760		(8,371)		(2,989)		(4,510)
OTHER INCOME AND EXPENSES, NET		—		—		—		(10,462)		(10,462)
NET LOSS BEFORE TAXES									$	(14,972)

	Six Months Ended
	June 30, 2022
	U.S.		International		Operating Cost		Other		Consolidated
	(In thousands)
REVENUE:
PRODUCT REVENUE, NET	$	15,863	$	10,639	$	—	$	—	$	26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION		(1,875)		(1,971)		—		—		(3,846)
GROSS PROFIT		13,988		8,668		—		—		22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES		2,451		1,723		3,259		82		7,515
GENERAL AND ADMINISTRATIVE EXPENSES		511		892		4,393		389		6,185
SALES AND MARKETING EXPENSES		9,242		4,116		250		110		13,718
DEPRECIATION AND AMORTIZATION		—		—		—		1,359		1,359
OPERATING EXPENSES		12,204		6,731		7,902		1,940		28,777
SEGMENT INCOME (LOSS) FROM OPERATIONS		1,784		1,937		(7,902)		(1,940)		(6,121)
OTHER INCOME AND EXPENSES, NET		—		—		—		(2,932)		(2,932)
NET INCOME BEFORE TAXES									$	(9,053)

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Other Agreements with Eyepoint Parent and Eyepoint (Tables)

6 Months Ended

Jun. 30, 2023

Other Agreements with Eyepoint Parent and Eyepoint [Abstract]

Schedule of Other Agreements Included in Consolidated Balance Sheet

	June 30, 2023
	(In thousands)
Assets:
Product rights intangible asset	$	98,122
Liabilities:
Accrued expenses		1,771
Accrued licensor payments		21,079

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value [Abstract]

Fair Value of Assets and Liabilities

	June 30, 2023
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	93	$	—	$	93
Assets measured at fair value	$	—	$	93	$	—	$	93
Liabilities:
Common stock warrant liability (1)	$	—	$	3,471	$	—	$	3,471
Liabilities measured at fair value	$	—	$	3,471	$	—	$	3,471

	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Warrant asset (1)	$	—	$	183	$	—	$	183
Assets measured at fair value	$	—	$	183	$	—	$	183
Liabilities:
Common stock warrant liability (1)	$	—	$	—	$	—	$	—
Liabilities measured at fair value	$	—	$	—	$	—	$	—

(1) The Company uses the Black-Scholes pricing model and assumptions that consider, among other variables, the fair value of the underlying stock, risk-free interest rate, volatility, expected life and dividend rates in estimating fair value for the warrants considered to be derivative instruments. Changes in this value each reporting period are reported in the condensed consolidated statement of operations

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Nature of Operations (Narrative) (Details) - ILUVIEN [Member]	Jun. 30, 2023 country
Nature Of Operations [Line Items]
Number of countries in which product has received marketing authorization and reimbursement for the treatment of diabetic macular edema	24
Number of countries in which product is indicated for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies	17
Number of countries authorized for marketing	17
Number of countries with reimbursement approval	10

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Revenue Recognition (Narrative) (Details)	6 Months Ended
	Jun. 30, 2023
Period before expiration date returns are accepted	3 months
Period after expiration date returns are accepted	1 year
Minimum [Member]
Customer payment obligation, period	30 years
Maximum [Member]
Customer payment obligation, period	120 years

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Leases (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Lessee, Lease, Description [Line Items]
Operating lease cost	$ 256,000	$ 134,000	$ 405,000	$ 272,000
Cash paid for leases	176,000	64,000	351,000	132,000
Property and equipment acquired under operating leases	$ 0	0	$ 0	0
Weighted average remaining lease term	6 years		6 years
Weighted average discount rate, leases	9.50%		9.50%
Depreciation expense property and equipment under finance leases	$ 71,000	65,000	$ 123,000	155,000
Finance lease interest expense	11,000	10,000	22,000	21,000
Cash paid for finance leases	132,000	167,000	251,000	175,000
Property and equipment acquired under finance leases	$ 80,000	$ 0	$ 170,000	$ 0
Finance lease, weighted average remaining term	9 months 18 days		9 months 18 days
Finance lease, weighted average discount rate	9.90%		9.90%
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lease renewal term	1 year		1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lease renewal term	8 years		8 years

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Leases (Summary of Operating Leases Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
NON-CURRENT ASSETS:
Total lease assets	$ 1,277	$ 1,395
CURRENT LIABILITIES:
Accrued expenses	685	$ 768
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]		Accrued Liabilities, Current
NON-CURRENT LIABILITIES:
Other non-current liabilities	2,029	$ 2,267
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]		Other Liabilities, Noncurrent
Total lease liabilities	$ 2,714	$ 3,035

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Leases (Schedule of Future Minimum Operating Lease Payments) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023 (remaining)	$ 354
2024	680
2025	474
2026	488
2027	503
Thereafter	1,052
Total	3,551
Less amount representing interest	(837)
Total lease liabilities	2,714	$ 3,035
Less current portion (as a portion of accrued expenses)	(685)	$ (768)
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]		Accrued Liabilities, Current
Non-current portion (as a portion of other non-current liabilities)	$ 2,029	$ 2,267
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]		Other Liabilities, Noncurrent

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Leases (Summary of Finance Leases Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
NON-CURRENT ASSETS:
Total lease assets	$ 384	$ 366
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net
CURRENT LIABILITIES:
Finance lease obligations	$ 203	333
NON-CURRENT LIABILITIES:
Other non-current liabilities	$ 180	131
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent
Total lease liabilities	$ 383	$ 464

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Leases (Schedule of Future Minimum Finance Lease Payments) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Total lease liabilities	$ 383	$ 464
Less current portion	(203)	(333)
Non-current portion	$ 180	$ 131
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent
Property, Plant and Equipment [Member]
2023 (remaining)	$ 178
2024	177
2025	114
2026	15
Total	484
Less amount representing interest	(101)
Total lease liabilities	383
Less current portion	(203)
Non-current portion	$ 180

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Going Concern (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Accumulated deficit	$ 412,779	$ 415,388
Cash and cash equivalents	$ 18,807	$ 5,304	$ 7,890	$ 16,544

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Inventory (Schedule of Inventory) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory
Component parts	$ 505	$ 152
Work-in-process	73	560
Finished goods	477	893
Total inventory	$ 1,055	$ 1,605

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Intangible Assets (Narrative) (Details) - USD ($)			3 Months Ended		6 Months Ended		12 Months Ended
	May 17, 2023	Oct. 31, 2014	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2024	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets			$ 25,000,000		$ 25,000,000
Useful life (in years)					13 years
Amortization of intangible assets			484,000	$ 484,000	$ 962,000	$ 962,000
Net intangible assets			104,935,000		104,935,000			$ 8,957,000
License Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Net intangible assets			7,995,000		7,995,000			$ 8,957,000
YUTIQ Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets			98,122,000		$ 98,122,000
Useful life (in years)					10 years
Amortization of intangible assets			1,182,000		$ 1,182,000
Net intangible assets			$ 96,940,000		$ 96,940,000
Eyepoint License Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Milestone payment after the first product approved by the FDA		$ 25,000,000
Eyepoint License Agreement [Member] | Product Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 98,122,000
Upfront payment	$ 75,000,000
Eyepoint License Agreement [Member] | Forecast [Member]
Finite-Lived Intangible Assets [Line Items]
Milestone payment after the first product approved by the FDA							$ 7,500,000
Eyepoint License Agreement [Member] | Forecast [Member] | Product Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Milestone payment after the first product approved by the FDA							$ 7,500,000

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Intangible Assets (Future Amortization) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Total	$ 104,935	$ 8,957
License Agreement [Member]
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2023 (remaining)	978
2024	1,946
2025	1,940
2026	1,940
2027	1,191
Total	7,995	$ 8,957
YUTIQ Intangible Asset [Member]
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2023 (remaining)	4,942
2024	9,831
2025	9,804
2026	9,804
2027	9,804
Thereafter	52,755
Total	$ 96,940

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License Agreements (Narrative) (Details) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Aug. 01, 2017
Collaborative Arrangement, Co-promotion [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, royalty payable on net revenue, percentage		5.20%	5.20%	5.20%	5.20%
Collaborative arrangement, increase in royalty payable on net revenue (as a percentage)		6.00%	6.00%	6.00%	6.00%
Collaborative arrangement, royalty payable on net revenue over threshold, percentage				2.00%
Collaborative arrangement, royalty payable on net revenue, revenue threshold				$ 75,000,000
Royalty expense		$ 463,000	$ 758,000	857,000	$ 1,375,000
Accrued royalty expense		857,000		857,000
Eyepoint License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, forgiveness of future offset, additional amount	$ 5,000,000
Eyepoint License Agreement [Member] | Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Recoverable amount to offset future royalty payments		6,762,000		6,762,000		$ 15,000,000
Ocumension [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment from related party				10,000,000
Revenue from related party				$ 11,048,000
License agreement, shares purchased				1,000,000
License agreement, share purchase duration				4 years
Deferred revenue related party		$ 300,000		$ 300,000
Ocumension [Member] | Milestone One [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment from related party				$ 89,000,000

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Loan Agreements (SLR Investment Corp.) (Narrative) (Details) - USD ($)			3 Months Ended	6 Months Ended	12 Months Ended
	May 17, 2023	Mar. 24, 2023	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2019	Jan. 05, 2018
Debt Instrument [Line Items]
Loss on extinguishment of debt	$ 1,079,000		$ 1,079,000	$ 1,079,000
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2018 [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity						$ 40,000,000
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member]
Debt Instrument [Line Items]
Increase in borrowing capacity		$ 2,500,000
Line of credit facility, maximum borrowing capacity		$ 47,500,000			$ 45,000,000
Debt instrument, interest rate, stated percentage			5.15%	5.15%
Interest rate effective percentage			9.75%	9.75%
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member] | Amendment 3 [Member]
Debt Instrument [Line Items]
Loan amendment, minimum revenue amount trailing period				6 months
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member] | Amendment 4 [Member]
Debt Instrument [Line Items]
Loan amendment, minimum revenue amount trailing period				6 months
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member] | Amendment 5 [Member]
Debt Instrument [Line Items]
Option to extend term		12 months
Loan amendment, minimum revenue amount trailing period		6 months
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member] | Amendment 6 [Member]
Debt Instrument [Line Items]
Loan amendment, minimum revenue amount trailing period	6 months
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate				4.60%
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | SLR Loan [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage					7.65%
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | SLR Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					1.78%
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 15,000,000
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Term Loan [Member] | Amendment 5 [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 15,000,000
Debt instrument, interest rate, stated percentage		5.15%
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Term Loan [Member] | Amendment 6 [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 20,000,000
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Term Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Amendment 5 [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		4.60%
2018 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member]
Debt Instrument [Line Items]
Debt instrument, exit fee agreement, term				10 years
Debt instrument, exit fee				$ 2,000,000
2018 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Achievement of Milestone [Member]
Debt Instrument [Line Items]
Debt instrument, exit fee				1,000,000
2018 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Milestone 1 [Member]
Debt Instrument [Line Items]
Milestone revenue requirement				$ 80,000,000
Milestone period requirement				12 months
2018 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Milestone 2 [Member]
Debt Instrument [Line Items]
Milestone revenue requirement				$ 100,000,000
2019 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member]
Debt Instrument [Line Items]
Debt instrument, exit fee agreement, term				10 years
Debt instrument, exit fee				$ 2,000,000
2019 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Milestone 2 [Member]
Debt Instrument [Line Items]
Debt instrument, exit fee				$ 675,000
2019 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Amendment 5 [Member]
Debt Instrument [Line Items]
Increase in borrowing capacity		$ 2,500,000
Line of credit facility, maximum borrowing capacity		$ 47,500,000
2023 Exit Fee Agreement [Member] | SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member]
Debt Instrument [Line Items]
Debt instrument, exit fee agreement, term		10 years
Exit fee, percentage of original principal amount funded		1.50%
Milestone revenue requirement		$ 82,500,000

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Loan Agreements (Modification of Debt) (Narrative) (Details) - Loan Agreement 2019 [Member] - SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member]	Jun. 30, 2023 USD ($)
Amendment 4 [Member]
Debt Instrument [Line Items]
Deferred financing costs	$ 113,000
Amendment 5 [Member]
Debt Instrument [Line Items]
Deferred financing costs	$ 2,625,000

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Loss Per Share (EPS) (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	48,089,919	1,911,969
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		601,504
Series B Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	45,272,874
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,600,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,217,045	1,310,465

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Preferred Stock (Narrative) (Details) - USD ($)			1 Months Ended	3 Months Ended	6 Months Ended
	May 17, 2023	Mar. 24, 2023	Oct. 31, 2012	Mar. 31, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2019
Conversion of Stock [Line Items]
Preferred stock, par value (usd per share)					$ 0.01		$ 0.01
Common stock, par value (usd per share)					$ 0.01		$ 0.01
Class of warrant or right, number of securities called by warrants or rights (in shares)			300,000
Stock issuance costs incurred			$ 560,000		$ 509,000
Proceeds from issuance of preferred stock					78,339,000
Proceeds from issuance of common stock					$ 2,404,000	$ 40,000
Shares repurchased		$ 1,252,000
Preferred stock, shares authorized (in shares)					10,000,000		10,000,000
Securities Purchase Agreement [Member]
Conversion of Stock [Line Items]
Proceeds from issuance of preferred stock		12,000,000
Tranche One [Member]
Conversion of Stock [Line Items]
Proceeds from issuance of preferred stock		$ 12,000,000
Series A Preferred Stock [Member]
Conversion of Stock [Line Items]
Issuance of stock (in shares)			1,000,000
Preferred stock, shares outstanding (in shares)					0		600,000
Preferred stock, shares issued (in shares)					0		600,000
Proceeds from issuance of preferred stock			$ 40,000,000
Shares repurchased (in shares)		600,000
Shares repurchased				$ 938,000
Preferred stock, liquidation preference							$ 24,000,000
Preferred stock, shares authorized (in shares)					0		1,300,000
Series B Preferred Stock [Member]
Conversion of Stock [Line Items]
Preferred stock, shares outstanding (in shares)					78,617		0
Preferred stock, shares issued (in shares)					78,617		0
Preferred stock dividend rate percentage		6.00%
Preferred stock dividends in arrears					$ 683,000
Preferred stock dividends in arrears, per share					$ 5.00
Preferred stock, liquidation preference					$ 0
Preferred stock, shares authorized (in shares)					78,617		0
Series B Preferred Stock [Member] | Securities Purchase Agreement [Member]
Conversion of Stock [Line Items]
Preferred stock, par value (usd per share)		$ 0.01
Series B Preferred Stock [Member] | Tranche One [Member]
Conversion of Stock [Line Items]
Issuance of stock (in shares)		12,000
Share Price		$ 1,000
Preferred stock conversion price (usd per share)		$ 2.10
Class of Warrant or Right, Expiration Period		7 years
Series B Preferred Stock [Member] | Tranche Two [Member]
Conversion of Stock [Line Items]
Preferred stock conversion price (usd per share)	$ 1.70
Series B Preferred Stock [Member] | Purchase Agreement Amendment [Member]
Conversion of Stock [Line Items]
Issuance of stock (in shares)	66,617
Common Stock [Member]
Conversion of Stock [Line Items]
Shares repurchased (in shares)		200,919
Common Stock [Member] | Tranche Two [Member]
Conversion of Stock [Line Items]
Issuance of stock (in shares)	1,401,901
Proceeds from issuance of common stock	$ 69,000,000.0
Common Stock [Member] | Purchase Agreement Amendment [Member]
Conversion of Stock [Line Items]
Class of warrant or right, number of securities called by warrants or rights (in shares)	1,600,000
Minimum [Member] | Common Stock [Member] | Before Conversion [Member]
Conversion of Stock [Line Items]
Ownership interest of holders after conversion of preferred stock (percent)		19.99%
Minimum [Member] | Common Stock [Member] | After Conversion [Member]
Conversion of Stock [Line Items]
Ownership interest of holders after conversion of preferred stock (percent)		9.99%
Maximum [Member] | Series B Preferred Stock [Member] | Securities Purchase Agreement [Member]
Conversion of Stock [Line Items]
Issuance of stock (in shares)		27,000
Maximum [Member] | Common Stock [Member] | Securities Purchase Agreement [Member]
Conversion of Stock [Line Items]
Class of warrant or right, number of securities called by warrants or rights (in shares)		5,714,286
Shares issued in conversion of preferred stock (in shares)		1,401,901
SLR Investment Corp. (formerly named Solar Capital Ltd.) [Member] | Loan Agreement 2019 [Member]
Conversion of Stock [Line Items]
Line of credit facility, maximum borrowing capacity		$ 47,500,000						$ 45,000,000

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Equity Incentive Plans (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			$ 442	$ 581
Weighted average contractual term			4 years 6 months		4 years 8 months 19 days
2019 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)	52,283		52,283
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 148	$ 218	$ 315	476
Share-based compensation not yet recognized	$ 895		$ 895
Weighted average contractual term			2 years 3 months 18 days
New Awards [Member] | Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)	0		0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 62	43	$ 109	89
Weighted average contractual term			3 years 7 months 13 days
Unrecognized share based compensation expense	1,120		$ 1,120
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 7	$ 7	$ 18	$ 15

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Equity Incentive Plans (Summary of Stock Option Transactions) (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Options
Options outstanding at beginning of period	1,216,953	1,315,161	1,175,339	1,075,795
Grants	17,321	1,700	117,723	285,250
Forfeitures and expirations	(17,229)	(6,396)	(76,017)	(50,580)
Exercises
Options outstanding at period end	1,217,045	1,310,465	1,217,045	1,310,465
Options exercisable at period end	893,401	887,543	893,401	887,543	878,115
Weighted average per share fair value of options granted during the period	$ 1.77	$ 2.94	$ 1.86	$ 3.32
Weighted Average Exercise Price ($)
Options outstanding at beginning of period	18.03	19.39	19.03	23.35
Grants	2.55	4.34	2.70	4.96
Forfeitures and expirations	45.18	15.58	19.41	21.51
Exercises
Options outstanding at period end	17.43	19.39	17.43	19.39
Options exercisable at period end	$ 22.07	$ 25.91	$ 22.07	$ 25.91	$ 23.62

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Equity Incentive Plans (Summary of Additional Stock Option Transactions) (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Outstanding Stock Options
Outstanding, shares (in shares)	1,217,045	1,175,339	1,216,953	1,310,465	1,315,161	1,075,795
Outstanding, weighted average exercise price (usd per share)	$ 17.43	$ 19.03	$ 18.03	$ 19.39	$ 19.39	$ 23.35
Outstanding, weighted average remaining contractual term	5 years 6 months 25 days	5 years 8 months 4 days
Outstanding, aggregate intrinsic value	$ 24
Exercisable Stock Options
Exercisable, shares (in shares)	893,401	878,115		887,543
Exercisable, weighted average exercise price (usd per share)	$ 22.07	$ 23.62		$ 25.91
Exercisable, weighted average remaining contractual term	4 years 6 months	4 years 8 months 19 days
Exercisable, aggregate intrinsic value	$ 7
Exercisable and expected to vest
Outstanding, vested and expected to vest, shares (in shares)	1,182,115	1,139,482
Outstanding, vested and expected to vest, weighted average exercise price (usd per share)	$ 17.81	$ 19.46
Outstanding, vested and expected to vest, weighted average remaining contractual term	5 years 5 months 23 days	5 years 6 months 29 days
Outstanding, vested and expected to vest, aggregate intrinsic value	$ 22

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Equity Incentive Plans (Summary of Restricted Stock Transactions) (Details) - Restricted Stock and Restricted Stock Units [Member] - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restricted Stock & RSUs
Beginning of period (in shares)	685,176	94,063	73,594	46,250
Grants (in shares)			632,050	57,500
Vested restricted stock and RSUs (in shares)		(7,500)	(20,468)	(9,687)
Forfeitures (in shares)	(3,000)		(3,000)	(7,500)
End of period (in shares)	682,176	86,563	682,176	86,563
Weighted Average Grant Date Fair Value ($)
Beginning of period (usd per share)	$ 1.67	$ 5.29	$ 4.98	$ 5.65
Grants (usd per share)			1.39	4.96
Vested restricted stock and RSUs (usd per share)		8.93	4.98	5.01
Forfeitures (usd per share)	1.35		1.35	8.93
End of period (usd per share)	$ 1.67	$ 4.98	$ 1.67	$ 4.98

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Income Taxes (Narrative) (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Operating Loss Carryforwards [Line Items]
Deferred tax asset, research and development costs	$ 969
Federal [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carry-forwards	147,200
State [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carry-forwards	$ 107,700

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Segment Information (Narrative) (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 customer	Jun. 30, 2022 customer	Jun. 30, 2023 segment customer	Jun. 30, 2022 customer	Dec. 31, 2022 segment
Segment Reporting Information [Line Items]
Number of operating segments			3
Customer Concentration Risk [Member] | Revenues [Member]
Segment Reporting Information [Line Items]
Number of customers | customer	2	2	2	2
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Segment Reporting Information [Line Items]
Number of customers			2		2
Large Pharmaceutical Distributors [Member] | Customer Concentration Risk [Member] | Revenues [Member]
Segment Reporting Information [Line Items]
Concentration risk percentage	68.00%	61.00%	63.00%	60.00%
Large Pharmaceutical Distributors [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Segment Reporting Information [Line Items]
Concentration risk percentage			71.00%		71.00%

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Segment Information (Summary of Operations by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
REVENUE, NET	$ 17,538	$ 14,604	$ 31,084	$ 26,502
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION	(2,425)	(2,166)	(4,453)	(3,846)
GROSS PROFIT	15,113	12,438	26,631	22,656
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	3,648	3,932	7,812	7,515
GENERAL AND ADMINISTRATIVE EXPENSES	4,373	2,945	8,544	6,185
SALES AND MARKETING EXPENSES	6,434	6,865	12,238	13,718
DEPRECIATION AND AMORTIZATION	1,866	670	2,547	1,359
OPERATING EXPENSES	16,321	14,412	31,141	28,777
LOSS FROM OPERATIONS	(1,208)	(1,974)	(4,510)	(6,121)
OTHER INCOME AND EXPENSES, NET	(8,796)	(1,124)	(10,462)	(2,932)
NET LOSS BEFORE TAXES	(10,004)	(3,098)	(14,972)	(9,053)
U.S. [Member]
Segment Reporting Information [Line Items]
REVENUE, NET	11,876	8,943	19,456
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION	(1,290)	(1,060)	(2,195)	(1,875)
GROSS PROFIT	10,586	7,883	17,261	13,988
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	1,748	1,281	2,910	2,451
GENERAL AND ADMINISTRATIVE EXPENSES	1,101	195	2,205	511
SALES AND MARKETING EXPENSES	4,781	4,568	9,056	9,242
OPERATING EXPENSES	7,630	6,044	14,171	12,204
LOSS FROM OPERATIONS	2,956	1,839	3,090	1,784
International [Member]
Segment Reporting Information [Line Items]
REVENUE, NET	5,662	5,661	11,628
COST OF GOODS SOLD, EXCLUDING DEPRECIATION AND AMORTIZATION	(1,135)	(1,106)	(2,258)	(1,971)
GROSS PROFIT	4,527	4,555	9,370	8,668
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	842	807	1,589	1,723
GENERAL AND ADMINISTRATIVE EXPENSES	510	468	1,227	892
SALES AND MARKETING EXPENSES	1,379	2,112	2,794	4,116
OPERATING EXPENSES	2,731	3,387	5,610	6,731
LOSS FROM OPERATIONS	1,796	1,168	3,760	1,937
Operating Cost [Member]
Segment Reporting Information [Line Items]
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	1,033	1,799	3,266	3,259
GENERAL AND ADMINISTRATIVE EXPENSES	2,619	2,112	4,814	4,393
SALES AND MARKETING EXPENSES	225	133	291	250
OPERATING EXPENSES	3,877	4,044	8,371	7,902
LOSS FROM OPERATIONS	(3,877)	(4,044)	(8,371)	(7,902)
Other Segments [Member]
Segment Reporting Information [Line Items]
RESEARCH, DEVELOPMENT AND MEDICAL AFFAIRS EXPENSES	25	45	47	82
GENERAL AND ADMINISTRATIVE EXPENSES	143	170	298	389
SALES AND MARKETING EXPENSES	49	52	97	110
DEPRECIATION AND AMORTIZATION	1,866	670	2,547	1,359
OPERATING EXPENSES	2,083	937	2,989	1,940
LOSS FROM OPERATIONS	(2,083)	(937)	(2,989)	(1,940)
OTHER INCOME AND EXPENSES, NET	$ (8,796)	$ (1,124)	$ (10,462)	(2,932)
Product [Member]
Segment Reporting Information [Line Items]
REVENUE, NET				26,502
Product [Member] | U.S. [Member]
Segment Reporting Information [Line Items]
REVENUE, NET				15,863
Product [Member] | International [Member]
Segment Reporting Information [Line Items]
REVENUE, NET				$ 10,639

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Other Agreements with Ocumension (Narrative) (Details) $ / shares in Units, $ in Thousands	Apr. 14, 2021 USD ($) $ / shares shares	Apr. 14, 2021 $ / shares shares	Apr. 09, 2021	Oct. 31, 2012 shares
Related Party Transaction [Line Items]
Class of warrant or right, number of securities called by warrants or rights (in shares)				300,000
Ocumension [Member]
Related Party Transaction [Line Items]
Partnership agreement, shares sold	1,144,945
Partnership agreement, price per share | $ / shares	$ 8.734044
Partnership agreement, percentage of shares outstanding before closing	19.90%
Partnership agreement, consideration received | $	$ 10,000
Partnership agreement, warrant or rights period	4 years
Shares called by warrants	1,000,000	1,000,000
Exchange rate			0.12853
Class of warrant or right, exercise price of warrants or rights (per share) | (per share)	$ 3.07	$ 23.88

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Other Agreements with Eyepoint Parent and Eyepoint (Narrative) (Details) - USD ($)			6 Months Ended	12 Months Ended
	May 17, 2023	Oct. 31, 2014	Jun. 30, 2023	Dec. 31, 2025	Dec. 31, 2024
Related Party Transaction [Line Items]
Gross intangible assets			$ 25,000,000
Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Additional guaranty payments		$ 25,000,000
Forecast [Member] | Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Additional guaranty payments					$ 7,500,000
Product Rights [Member] | Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Upfront payment	$ 75,000,000
Intangible asset acquired	98,122,000		98,122,000
Guaranteed payments	7,085,000
Estimated future royalties discounted to fair value	15,765,000
Gross intangible assets	$ 98,122,000
Amortization period	10 years
Acquisition costs	$ 272,000
Product Rights [Member] | Forecast [Member] | Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Additional guaranty payments					$ 7,500,000
Collaborative arrangement, royalty payable on net revenue, revenue threshold				$ 70,000,000,000,000
YUTIQ Intangible Asset [Member]
Related Party Transaction [Line Items]
Gross intangible assets			$ 98,122,000
YUTIQ Intangible Asset [Member] | Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Manufacture election, following satisfaction of certain condition, initial term			18 months

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Other Agreements with Eyepoint Parent and Eyepoint (Schedule of Other Agreements Included in Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands		6 Months Ended
	May 17, 2023	Jun. 30, 2023
Related Party Transaction [Line Items]
Accrued licensor payments		$ 21,079
Product Rights [Member] | Eyepoint License Agreement [Member]
Related Party Transaction [Line Items]
Product rights intangible asset	$ 98,122	98,122
Accrued expenses		1,771
Accrued licensor payments		$ 21,079

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Fair Value (Fair Value of Assets and Liabilities) (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant asset	$ 93	$ 183
Assets measured at fair value	93	183
Common stock warrant liability	3,471
Liabilities measured at fair value	3,471
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant asset	93	183
Assets measured at fair value	93	$ 183
Common stock warrant liability	3,471
Liabilities measured at fair value	$ 3,471

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Subsequent Events (Narrative) (Details)	Jun. 30, 2023 shares
2019 Plan [Member]
Subsequent Event [Line Items]
Shares available for grant (in shares)	52,283