Equity

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Equity

Equity

COVAXIN Preferred Stock Purchase Agreement

On March 1, 2021, the Company entered into a preferred stock purchase agreement, pursuant to which the Company agreed to issue and sell 0.1 million shares of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Convertible Preferred Stock"), at a price per share equal to $109.60, to Bharat Biotech. On March 18, 2021, the Company issued the Series B Convertible Preferred Stock as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech pursuant to the Supply Agreement. Subsequent to December 31, 2021, the Company entered into supply commitments related to COVAXIN, which the advanced payment will be applied to.

Each share of Series B Convertible Preferred Stock is convertible, at the option of Bharat Biotech, into 10 shares of the Company’s common stock (the "Conversion Ratio") only after (i) the Company received stockholder approval to increase the number of authorized shares of common stock under its Sixth Amended and Restated Certificate of Incorporation and (ii) the Company’s receipt of shipments by Bharat Biotech of the first 10.0 million doses of COVAXIN manufactured by Bharat Biotech pursuant to the Supply Agreement, and further on the terms and subject to the conditions set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the "Certificate of Designation"). In April 2021, the Company's stockholders approved an increase in the number of the Company's authorized shares of common stock from 200.0 million to 295.0 million. As of December 31, 2021, the conversion condition relating to the delivery of the first 10.0 million doses of COVAXIN had not been met. The conversion rate of the Series B Convertible Preferred Stock is subject to adjustment in the event of a stock dividend, stock split, reclassification, or similar event with respect to the Company’s common stock.

Bharat Biotech is entitled to receive dividends on the Series B Convertible Preferred Stock equal (on an as-converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock, when and if such dividends are paid. Except as provided by law and certain protective provisions set forth in the Certificate of Designation, the Series B Convertible Preferred Stock has no voting rights. Upon a liquidation or dissolution of the Company, holders of Series B Convertible Preferred Stock would be entitled to receive the same amount that a holder of common stock would receive if the Series B Convertible Preferred Stock were fully converted to common stock.

The Company accounted for the issuance of the Series B Convertible Preferred Stock in accordance with ASC 718 and recorded its grant date fair value of $5.0 million within stockholders' equity during the year ended December 31, 2021, with a corresponding short-term asset for the advanced payment for the doses of COVAXIN. The Company utilized the traded common stock price, adjusted by the Conversion Ratio, to value the Series B Convertible Preferred Stock and the Finnerty model to estimate a 15% discount rate for the lack of marketability of the instrument. The valuation incorporates Level 3 inputs in the fair value hierarchy, including the estimated time until the instrument's liquidity and estimated volatility of the Company's common stock as of the grant date.

Registered Direct Offerings

On April 23, 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the "April 2021 Registered Direct Offering") an aggregate of 10.0 million shares of the Company's common stock at an offering price of $10.00 per share. The closing of the

April 2021 Registered Direct Offering occurred on April 27, 2021, and the Company received net proceeds of $93.4 million, after deducting equity issuance costs of $6.6 million.

On February 7, 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the "February 2021 Registered Direct Offering") an aggregate of 3.0 million shares of the Company's common stock at an offering price of $7.65 per share. The closing of the February 2021 Registered Direct Offering occurred on February 10, 2021, and the Company received net proceeds of $21.2 million, after, deducting equity issuance costs of $1.7 million.

At-the-Market Offerings

The Company commenced three separate at-the-market offerings ("ATMs") in May 2020, June 2020, and August 2020 (the "August 2020 ATM"). During the year ended December 31, 2021, the Company sold 1.0 million shares of common stock under the August 2020 ATM and received net proceeds of $4.8 million, after deducting equity issuance costs of $0.1 million. During the year ended December 31, 2020, the Company sold an aggregate of 108.1 million shares of common stock under the ATMs and received net proceeds of $36.3 million, after deducting equity issuance costs of $1.5 million.

Pre-Merger Financing

On September 27, 2019, the Company, which was formerly known as Histogenics Corporation ("Histogenics"), completed a reverse merger (the "Merger") with Ocugen OpCo, Inc. ("OpCo") in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of April 5, 2019, in which OpCo was deemed to be the accounting acquirer. In June 2019 prior to the Merger, OpCo and Histogenics entered into a Securities Purchase Agreement (as amended, the "Financing SPA") with certain accredited investors (the "Investors"). Pursuant to the Financing SPA, among other things, (i) immediately prior to the Merger, OpCo issued 2.2 million shares of common stock to the Investors, (ii) on October 4, 2019, the Company issued 2.2 million shares of the Company's common stock to the Investors and (iii) on October 4, 2019, the Company issued three series of warrants to purchase shares of the Company’s common stock (the “Series A Warrants,” the “Series B Warrants” and the “Series C Warrants” and collectively, the “SPA Warrants”) in exchange for an aggregate purchase price of $25.0 million (the "Pre-Merger Financing"). See Note 10 for additional information. In 2019, prior to the Pre-Merger Financing, the Company issued two senior secured convertible notes (the "Senior Secured Convertible Notes") in the aggregate principal amount of $5.3 million. The Investors offset $5.3 million from the amount to be received under the Pre-Merger Financing and the Senior Secured Convertible Notes were deemed to have been repaid and cancelled.