Commitments and Contingencies

3 Months Ended

Dec. 31, 2024

Commitments and Contingencies.

Commitments and Contingencies

8.     Commitments and Contingencies

Litigation

On November 3, 2023, a securities class action lawsuit was filed against the Company and certain of its officers in the United States District Court for the District of New Jersey. The class action complaint alleges violations of the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with allegedly false and misleading statements made by the Company related to the Company’s BLA during the period from August 3, 2021 through August 29, 2023. The complaint alleges, among other things, that the Company violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by failing to disclose that there was an alleged lack of evidence supporting ONS-5010/LYTENAVA as a treatment for wet AMD and that the Company and/or their manufacturing partner had deficient CMC controls for ONS-5010/LYTENAVA, which remained unresolved at the time the Company’s BLA was re-submitted to the FDA and, as a result, the FDA was unlikely to approve the Company’s BLA, and that the Company’s stock price dropped when such information was disclosed. The plaintiffs in the class action complaint seek damages and interest, and an award of reasonable costs, including attorneys’ fees. On June 25, 2024, the defendants filed a motion to dismiss the amended class action complaint in its entirety. On February 6, 2025, the court entered an order granting the motion to dismiss and dismissing the complaint without prejudice and with leave to amend, and providing for the filing of a further amended complaint and briefing on the defendants’ anticipated motion to dismiss such further amended complaint in the spring of 2025.

On October 10, 2024, certain of the company’s officers and directors were named as defendants in a shareholder derivative action filed in the District Court of the District of Delaware.  The derivative complaint alleges that defendants breached their fiduciary duties by causing and/or allowing the Company to violate federal securities laws based on the same alleged misstatements as the securities class action.  The derivative complaint also alleges defendants violated Section 14(a) of the Exchange Act, as well as claims for contribution, unjust enrichment, and waste of corporate assets.  The derivative complaint seeks unspecified damages, corporate governance reforms, restitution, contribution, attorneys’ fees, and other costs. The derivative action is currently stayed, pending the final resolution of the November 3, 2023, securities class action pending in the United States District Court for the District of New Jersey.

The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and the Company may not prevail. In addition, the Company may incur substantial legal fees and costs in connection with such lawsuits. The Company currently is not able to estimate the possible cost to it from these matters, as the pending lawsuits are currently at an early stage, and the Company cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages that the Company may be required to pay. Such amounts could be material to the Company’s financial statements if it does not prevail in the defense of the pending lawsuits and any other related lawsuits, or even if it does prevail. The Company has not established any reserve for any potential liability relating to the pending lawsuits and any other related lawsuits. It is possible that the Company could, in the future, incur judgments or enter into settlements of claims for monetary damages.

Leases

Corporate office

In March 2021, the Company entered into a three-year term corporate office lease for its former corporate headquarters in Iselin, New Jersey that ended on April 30, 2024.

In March 2024, the Company entered into a five-year term corporate office lease for its new corporate headquarters in Iselin, New Jersey that commenced on May 1, 2024.

The components of lease cost for the three months ended December 31, 2024 and 2023 are as follows:

	Three months ended December 31,
	2024		2023
Lease cost:
Interest on lease liabilities	$	—	$	104
Total finance lease cost		—		104
Operating lease cost		19,080		11,217
Total lease cost	$	19,080	$	11,321

Amounts reported in the unaudited interim consolidated balance sheets for leases where the Company is the lessee are as follows:

	December 31, 2024		September 30, 2024
Operating leases:
Right-of-use asset	$	262,822	$	274,645
Operating lease liabilities		285,758		297,829
Weighted-average remaining lease term (years):
Operating leases		4.3		4.6
Weighted-average discount rate:
Operating leases		9.9%		9.9%

Other information related to leases for the three months ended  December 31, 2024 and 2023 are as follows:

	Three months ended December 31,
	2024		2023
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from finance leases	$	—	$	104
Operating cash flows from operating leases		19,329		—
Financing cash flows from finance leases		—		3,183

Future minimum lease payments under non-cancelable leases at December 31, 2024 are as follows for the years ending September 30:

	Operating leases
2025 (remaining nine months)	$	58,762
2026		79,954
2027		81,817
2028		83,680
2029		49,447
Total undiscounted lease payments		353,660
Less: Imputed interest		67,902
Total lease obligations	$	285,758