0001410578-23-001760.txt : 20230811 0001410578-23-001760.hdr.sgml : 20230811 20230811122218 ACCESSION NUMBER: 0001410578-23-001760 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 60 CONFORMED PERIOD OF REPORT: 20230630 FILED AS OF DATE: 20230811 DATE AS OF CHANGE: 20230811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EYENOVIA, INC. CENTRAL INDEX KEY: 0001682639 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 471178401 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38365 FILM NUMBER: 231162515 BUSINESS ADDRESS: STREET 1: 295 MADISON AVENUE, STREET 2: SUITE 2400 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 813-766-9539 MAIL ADDRESS: STREET 1: 295 MADISON AVENUE, STREET 2: SUITE 2400 CITY: NEW YORK STATE: NY ZIP: 10017 10-Q 1 eyen-20230630x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

    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

    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: 001-38365

EYENOVIA, INC.

(Exact name of Registrant as Specified in Its Charter)

DELAWARE

    

47-1178401

(State or Other Jurisdiction of
Incorporation or Organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

295 Madison Avenue, Suite 2400
NEW YORK, NY

 

10017

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (833) 393-6684

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, par value $0.0001 per share

 

EYEN

 

Nasdaq Capital 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   No 

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   No 

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 news or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

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

The number of outstanding shares of the registrant’s common stock was 38,211,808 as of August 8, 2023.

EYENOVIA, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

2

Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022

2

Unaudited Condensed Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022

3

Unaudited Condensed Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022 

4

Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

5

Notes to Unaudited Condensed Financial Statements

6

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

14

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

20

Item 4. Controls and Procedures.

21

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

22

Item 1A. Risk Factors.

22

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

22

Item 3. Defaults Upon Senior Securities.

22

Item 4. Mine Safety Disclosures.

22

Item 5. Other Information.

22

Item 6. Exhibits.

23

SIGNATURES

24

1

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

EYENOVIA, INC.

Condensed Balance Sheets

    

June 30, 

    

December 31, 

 

2023

 

2022

 

(unaudited)

Assets

 

  

 

  

 

  

 

  

Current Assets

 

  

 

  

Cash and cash equivalents

$

17,468,088

$

22,863,520

Deferred clinical supply costs

3,578,326

2,284,931

License fee and expense reimbursements receivable

429,006

1,183,786

Security deposits, current

119,550

Prepaid expenses and other current assets

 

1,801,373

 

1,190,719

Total Current Assets

 

23,276,793

 

27,642,506

Property and equipment, net

 

3,698,421

 

1,295,115

Security deposits, non-current

 

198,674

 

80,874

Operating lease right-of-use asset

1,915,061

1,291,592

Equipment deposits

 

257,950

 

726,326

Total Assets

$

29,346,899

$

31,036,413

 

 

  

Liabilities and Stockholders’ Equity

 

 

  

 

 

  

Current Liabilities:

 

 

  

Accounts payable

$

1,312,749

$

1,428,283

Accrued compensation

 

1,013,118

 

1,747,191

Accrued expenses and other current liabilities

 

363,431

 

503,076

Operating lease liabilities - current portion

427,749

484,882

Notes payable - current portion, net of debt discount of $91,621 and $33,885 as of June 30, 2023 and December 31, 2022, respectively

947,163

174,448

Convertible notes payable - current portion, net of dedt discount of $0 and $33,885 as of June 30, 2023 and December 31, 2022, respectively

174,448

Total Current Liabilities

4,064,210

4,512,328

Operating lease liabilities - non-current portion

1,584,218

907,644

Notes payable - non-current portion, net of debt discount of $1,120,372 and $813,229 as of June 30, 2023 and December 31, 2022, respectively

8,683,794

4,190,938

Convertible notes payable - non-current portion, net of debt discount of $507,270 and $813,229 as of June 30, 2023 and December 31, 2022, respectively

 

4,492,730

 

4,190,938

Total Liabilities

18,824,952

13,801,848

Commitments and contingencies (Note 7)

 

  

 

  

 

  

 

  

Stockholders’ Equity:

 

  

 

  

Preferred stock, $0.0001 par value, 6,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022

 

 

Common stock, $0.0001 par value, 90,000,000 shares authorized; 38,169,398 and 36,668,980 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

3,817

 

3,667

Additional paid-in capital

 

140,703,819

 

135,461,361

Accumulated deficit

 

(130,185,689)

 

(118,230,463)

Total Stockholders’ Equity

10,521,947

17,234,565

Total Liabilities and Stockholders’ Equity

$

29,346,899

$

31,036,413

The accompanying notes are an integral part of these condensed financial statements.

2

EYENOVIA, INC.

Condensed Statements of Operations

(unaudited)

For the Three Months Ended

For the Six Months Ended

June 30, 

June 30, 

    

2023

    

2022

    

2023

    

2022

Operating Expenses:

 

 

 

Research and development

$

2,811,061

$

3,586,866

$

5,333,011

$

7,299,450

General and administrative

 

3,149,809

 

3,534,590

6,086,695

7,009,555

Total Operating Expenses

 

5,960,870

 

7,121,456

11,419,706

14,309,005

Loss From Operations

 

(5,960,870)

 

(7,121,456)

(11,419,706)

(14,309,005)

 

 

Other Income (Expense):

 

Other income, net

119,450

33,376

190,443

26,303

Interest expense

(558,003)

 

(153,436)

(1,012,006)

(298,673)

Interest income

 

183,563

 

2,416

286,043

2,610

Net Loss

$

(6,215,860)

$

(7,239,100)

$

(11,955,226)

$

(14,578,765)

 

 

Net Loss Per Share - Basic and Diluted

$

(0.16)

$

(0.22)

$

(0.32)

$

(0.46)

 

  

 

  

Weighted Average Number of Common Shares Outstanding - Basic and Diluted

 

38,093,826

 

33,644,867

37,753,694

31,836,582

The accompanying notes are an integral part of these condensed financial statements.

3

EYENOVIA, INC.

Condensed Statements of Changes in Stockholders’ Equity

(unaudited)

For the Three and Six Months Ended June 30, 2023

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance - January 1, 2023

 

36,668,980

$

3,667

$

135,461,361

$

(118,230,463)

$

17,234,565

Issuance of common stock in At the Market offering [1]

 

1,299,947

 

130

 

3,499,462

 

 

3,499,592

Cashless exercise of stock options

 

19,530

 

2

 

(2)

 

 

Stock-based compensation

 

 

 

819,064

 

 

819,064

Issuance of common stock related to vested restricted stock units

 

3,289

 

 

 

 

Net loss

(5,739,366)

(5,739,366)

Balance - March 31, 2023

37,991,746

$

3,799

$

139,779,885

$

(123,969,829)

$

15,813,855

Issuance of common stock in At the Market offering [2]

121,989

13

403,107

403,120

Cashless exercise of stock options

1,219

Exercise of stock options

10,000

1

27,199

27,200

Stock-based compensation

493,632

493,632

Issuance of common stock related to vested restricted stock units

44,444

4

(4)

Net loss

(6,215,860)

(6,215,860)

Balance - June 30, 2023

38,169,398

$

3,817

$

140,703,819

$

(130,185,689)

$

10,521,947

[1]

Includes gross proceeds of $3,607,827 less total issuance costs of $108,235.

[2]

Includes gross proceeds of $415,588 less total issuance costs of $12,468.

For the Three and Six Months Ended June 30, 2022

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance - January 1, 2022

28,426,616

$

2,844

$

110,683,077

$

(90,219,306)

$

20,466,615

Issuance of common stock and warrants in registered direct offering [1]

3,000,000

300

14,897,608

14,897,908

Issuance of common stock in At the Market offering [2]

252,449

25

860,340

860,365

Stock-based compensation

908,987

908,987

Issuance of common stock related to vested restricted stock units

19,359

2

(2)

Net loss

(7,339,665)

(7,339,665)

Balance -March 31, 2022

31,698,424

$

3,171

$

127,350,010

$

(97,558,971)

$

29,794,210

Exercise of stock warrants

1,870,130

187

18,514

18,701

Stock-based compensation

1,036,926

1,036,926

Issuance of common stock related to vested restricted stock units

54,499

5

(5)

Net loss

(7,239,100)

(7,239,100)

Balance - June 30, 2022

33,623,053

$

3,363

$

128,405,445

$

(104,798,071)

$

23,610,737

[1]

Includes gross proceeds of $14,981,299 less total issuance costs of $83,391.

[2]

Includes gross proceeds of $886,974, less total issuance costs of $26,609.

The accompanying notes are an integral part of these condensed financial statements.

4

EYENOVIA, INC.

Condensed Statements of Cash Flows

(unaudited)

For the Six Months Ended

June 30, 

    

2023

    

2022

Cash Flows From Operating Activities

 

  

 

  

Net loss

$

(11,955,226)

$

(14,578,765)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Stock-based compensation

1,312,696

1,945,913

Depreciation of property and equipment

 

187,267

 

145,901

Amortization of debt discount

313,446

52,431

Non-cash rent expense

280,968

Changes in operating assets and liabilities:

 

 

Prepaid expenses and other current assets

 

(1,514)

 

(461,761)

License fee and expense reimbursements receivables

 

754,780

 

1,095,831

Deferred clinical supply costs

(1,293,395)

(1,538,380)

Security and equipment deposits

1,750

(68,868)

Accounts payable

(115,534)

1,072,690

Accrued compensation

(734,073)

(529,534)

Accrued expenses and other current liabilities

(139,645)

(21,417)

Lease liabilities

 

(284,996)

 

2,356

Net Cash Used In Operating Activities

 

(11,673,476)

 

(12,883,603)

 

 

Cash Flows From Investing Activities

Purchases of property and equipment

(2,122,197)

(281,342)

Vendor deposits for property and equipment

(118,298)

Net Cash Used In Investing Activities

(2,122,197)

(399,640)

Cash Flows From Financing Activities

 

 

Proceeds from sale of common stock and warrants in direct offering [1]

 

 

14,981,299

Payment of offering issuance costs

(83,391)

Proceeds from sale of common stock in At the Market offering

4,023,414

886,974

Payment of issuance costs for At the Market offering

(120,702)

(26,609)

Proceeds from exercise of stock options

27,200

18,701

Proceeds from note payable to Avenue

5,000,000

Payment of issuance costs for notes issued to Avenue

(125,982)

Repayments of notes payable

(403,689)

(448,999)

Net Cash Provided By Financing Activities

 

8,400,241

 

15,327,975

Net (Decrease) Increase in Cash and Cash Equivalents

 

(5,395,432)

 

2,044,732

Cash, cash equivalents and restricted cash - Beginning of Period

 

22,863,520

 

27,336,850

Cash, cash equivalents and restricted cash - End of Period

$

17,468,088

$

29,381,582

Cash, cash equivalents and restricted cash consisted of the following:

    

    

Cash and cash equivalents

$

17,468,088

$

21,506,582

Restricted cash

7,875,000

$

17,468,088

$

29,381,582

Supplemental Disclosure of Cash Flow Information:

    

    

Cash paid during the year for:

Interest

$

699,116

$

199,367

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Purchase of insurance policy financed by note payable

$

609,140

$

675,331

Right-of-use assets and lease liabilities recognized upon lease renewal

$

904,437

$

Vendor deposits applied to purchases of property and equipment

$

468,376

$

Original issue discount on notes payable

$

212,500

$

Cashless exercise of stock options

$

2

$

Issuance of common stock related to vested restricted stock units

$

4

$

7

[1] Includes gross proceeds of $14,981,299, of which $5,741,299 is pre-funded warrants.

The accompanying notes are an integral part of these condensed financial statements.

5

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 – Business Organization, Nature of Operations and Basis of Presentation

Eyenovia, Inc. (“Eyenovia” or the “Company”) is an ophthalmic technology company developing the Optejet® delivery system for use both in combination with its own drug-device therapeutic programs in mydriasis (pupil dilation), presbyopia and pediatric progressive myopia as well as out-licensing for additional indications. The Company’s investigational products are classified by the Food and Drug Administration (“FDA”) as drug-device combination products with drug primary mode of action, meaning that the Center for Drug Evaluation and Research, or CDER, is designated as the lead center with primary jurisdictional oversight. Accordingly, the product candidates are submitted to the FDA and CDER for premarket review and approval under new drug applications, or NDAs.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed financial statements of the Company as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the operating results for the full year ending December 31, 2023 or any other period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related disclosures of the Company as of December 31, 2022 and for the year then ended, which were included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023, as amended by Amendment No. 1, filed with the SEC on May 1, 2023.

Note 2 – Going Concern and Summary of Significant Accounting Policies

Since the date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.

Going Concern

As of June 30, 2023, the Company had cash and cash equivalents in the aggregate amount of approximately $17.5 million. For the six months ended June 30, 2023 and 2022, the Company incurred net losses of approximately $12.0 million and $14.6 million, respectively, and used cash in operations of approximately $11.7 million and $12.9 million, respectively. The Company does not have recurring revenue, has not yet achieved profitability and may never become profitable. The Company expects to continue to incur cash outflows from operations. Research and development and general and administrative expenses will continue to be incurred by the Company and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date that these financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to raise further capital through licensing transactions, the sale of additional equity or debt securities, or otherwise, to support its future operations.

The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and/or take additional measures to reduce general and administrative and sales and marketing costs in order to conserve its cash.

Reclassifications

Certain prior period amounts presented on the Company’s financial statements have been reclassified in order to conform to current period presentation. These reclassifications have no effect on previously reported results of operations or loss per share.

6

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents in the financial statements.As of June 30, 2023, the Company had Treasury bills with original maturity dates of three months or less in the amount of $4,493,766.

The Company has cash deposits in a financial institution that, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. As of June 30, 2023 and December 31, 2022, the Company had cash balances in excess of FDIC insurance limits of $12,474,323 and $22,613,520, respectively.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period plus fully vested shares that are subject to issuance for little or no monetary consideration. Diluted earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.

The following table presents the computation of basic and diluted net loss per common share:

    

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

    

2023

    

2022

    

2023

    

2022

Numerator:

Net loss attributable to common stockholders

$

(6,215,860)

$

(7,239,100)

$

(11,955,226)

$

(14,578,765)

Denominator (weighted average quantities):

 

 

Common shares issued

 

38,064,215

 

31,669,431

37,724,083

31,089,811

Add: Prefunded warrants

 

 

1,870,130

671,594

Add: Undelivered vested restricted shares

 

29,611

 

105,306

29,611

75,177

Denominator for basic and diluted net loss per share

 

38,093,826

 

33,644,867

37,753,694

31,836,582

Basic and diluted net loss per common share

$

(0.16)

$

(0.22)

$

(0.32)

$

(0.46)

The following securities are excluded from the calculation of weighted average diluted common shares because their inclusion would have been anti-dilutive:

June 30, 

    

2023

    

2022

Options

 

5,185,078

 

4,926,750

Warrants

 

6,087,845

 

6,087,845

Convertible notes

2,327,747

Restricted stock units

 

86,205

 

111,110

Total potentially dilutive shares

 

13,686,875

 

11,125,705

7

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Clinical Supply Arrangements

Bausch + Lomb, Inc. (“B+L”) and Arctic Vision (Hong Kong) Limited (“Arctic Vision”) have contracted with the Company to manufacture and supply them with the appropriate drug-device combination products to conduct their clinical trials on a cost plus 10% mark-up basis. The Company’s licensing agreements with Bausch + Lomb and Arctic Vision represent collaborative arrangements and they are not a customer with respect to the clinical supply arrangements. The Company’s policy is to (a) defer the materials and manufacturing costs in order to properly match them up against the income from the clinical supply arrangements; and (b) to report the net income from the clinical supply arrangements as other income.

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash flows.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20)” and “Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, ASU 2020-06 improves disclosure requirements for convertible instruments and earnings-per-share guidance. ASU 2020-06 also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted ASU 2020-06 effective January 1, 2023 which eliminates the need to assess whether a beneficial conversion feature needs to be recognized upon the issuance of new convertible instruments. The adoption of ASU 2020-06 did not have a material impact on the Company’s financial position, results of operations or cash flows.

Note 3 – Prepaid Expenses and Other Current Assets

As of June 30, 2023 and December 31, 2022, prepaid expenses and other current assets consisted of the following:

    

June 30, 

    

December 31, 

 

2023

 

2022

Payroll tax receivable

$

645,566

$

660,891

Prepaid insurance expenses

600,607

201,082

Prepaid general and administrative expenses

 

310,701

87,982

Prepaid research and development expenses

83,192

2,521

Prepaid patent expenses

73,157

38,796

Prepaid conference expenses

 

69,400

97,743

Prepaid rent and security deposit

18,750

74,959

Other

26,745

Total prepaid expenses and other current assets

$

1,801,373

$

1,190,719

8

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EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4 – Accrued Compensation

As of June 30, 2023 and December 31, 2022, accrued compensation consisted of the following:

    

June 30, 

    

December 31, 

 

2023

 

2022

Accrued bonus expenses

$

695,450

$

1,447,643

Accrued payroll expenses

 

317,668

 

299,548

Total accrued compensation

$

1,013,118

$

1,747,191

Note 5 – Accrued Expenses and Other Current Liabilities

As of June 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following:

    

June 30, 

    

December 31, 

 

2023

 

2022

Accrued consulting and professional services

$

142,915

$

320,000

Accrued research and development expenses

117,983

35,524

Accrued leasehold improvements

92,528

Credit card payable

 

58,549

 

50,639

Accrued franchise tax

26,201

Accrued travel and entertainment expenses

 

13,784

 

Other

3,999

4,385

Total accrued expenses and other current liabilities

$

363,431

$

503,076

Note 6 – Notes Payable

As of June 30, 2023 and December 31, 2022, notes payable consisted of the following:

June 30, 2023

    

December 31, 2022

    

Notes Payable

    

Debt Discount

    

Net

    

Notes Payable

    

Debt Discount

    

Net

Current portion:

D&O insurance policy loan

$

205,451

$

$

205,451

$

$

$

Avenue - Note payable

833,333

(91,621)

741,712

208,333

(33,885)

174,448

Avenue - Convertible note payable

208,333

(33,885)

174,448

Total current portion

$

1,038,784

$

(91,621)

$

947,163

$

416,666

$

(67,770)

$

348,896

Non-Current portion:

Avenue - Note payable

9,804,166

(1,120,372)

8,683,794

5,004,167

(813,229)

4,190,938

Avenue - Convertible note payable

5,000,000

(507,270)

4,492,730

5,004,167

(813,229)

4,190,938

Total non-current portion

$

14,804,166

$

(1,627,642)

$

13,176,524

$

10,008,334

$

(1,626,458)

$

8,381,876

On February 24, 2023, the Company issued a note payable in the amount of $609,140 for the purchase of a directors and officers’ liability insurance policy (the “D&O Loan”). The note accrues interest at a rate of 7.11% per year and matures on August 24, 2023. The D&O Loan is payable in six monthly payments of $103,639 consisting of principal and interest. During the six months ended June 30, 2023, the Company repaid $403,689 of principal owed on the D&O Loan.

9

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

On May 22, 2023, pursuant to the Company’s Loan and Security Agreement (the “Loan and Security Agreement”) with Avenue Capital Management II, L.P., and related entities (“Avenue”), the Company received an additional tranche of non-convertible debt funding in the gross amount of $5,000,000. The Company paid approximately $126,000 of origination and legal fees connected to this debt funding. The additional funding was made under the provisions of the Loan and Security Agreement, bearing interest at an annual rate equal to the greater of (A) 7.0% and (B) the prime rate as reported in The Wall Street Journal plus 4.45%. The entire outstanding balance due under the Loan and Security Agreement has a maturity date of November 1, 2025. The additional funding triggered the extension of the interest-only period from the original 12 months to 18 months (through May 2024) for the entire outstanding balance due under the Loan and Security Agreement (initial and additional tranches). Following the interest-only period, the Company will make equal monthly payments of principal until the maturity date, plus interest.

During the three months ended June 30, 2023, the Company recorded interest expense of $558,003, of which $550,746 was related to the Loan and Security Agreement with Avenue Capital Management II, L.P. (“Avenue”) and related entities, (including amortization of debt discount of $163,956) and $7,257 was related to the D&O Loan. During the six months ended June 30, 2023, the Company recorded interest expense of $1,012,006, of which $1,001,140 was related to the Loan and Security Agreement (including amortization of debt discount of $313,446) and $10,866 was related to the D&O Loan.

Note 7 – Commitments and Contingencies

Operating Leases

In June 2023, the Company entered into an extension agreement to renew its lease for approximately 3,800 square feet of office space in New York, NY. The lease was due to expire on October 31, 2023. The lease was extended from November 1, 2023 to December 31, 2026.

In February 2023, the Company exercised its options to renew its three leases in Redwood City, California, for a total of approximately 6,700 square feet. The leases were due to expire on August 31, 2023. The leases were extended from September 1, 2023 to August 31, 2025.

A summary of the Company’s right-of-use assets and liabilities as follows:

    

For the Six Months Ended

 

June 30, 2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

  

Operating cash flows used in operating activities

$

284,996

Right-of-use assets obtained in exchange for lease obligations

 

  

Operating leases

$

904,437

Weighted Average Remaining Lease Term (Years)

 

  

Operating leases

 

3.5 years

Weighted Average Discount Rate

 

  

Operating leases

 

10.0

%

10

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Future minimum payments under all of the Company’s operating lease agreements are as follows:

For the Year Ending December 31,

    

Minimum Lease Payments

2023

$

445,025

2024

 

660,923

2025

 

675,400

2026

 

560,996

2027

 

214,619

Total future minimum lease payments

 

2,556,963

Less: amount representing imputed interest

 

(544,996)

Present value of lease liabilities

 

2,011,967

Less: current portion

 

(427,749)

Lease liabilities, non current portion

$

1,584,218

Litigations, Claims and Assessments

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

Note 8 – Stockholders’ Equity

Equity Incentive Plan

On June 27, 2023, the Company’s stockholders approved an amendment to the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan, reserving an additional 1,000,000 shares of common stock for further issuance under such plan.

At-The-Market Offering

During the six months ended June 30, 2023, the Company received approximately $3.9 million in net proceeds from the sale of 1,421,936 shares of its common stock pursuant to its Sales Agreement with SVB Securities LLC (“SVB Securities”) in an ”at-the-market” offering (the “At-the-Market Offering Program”).

Stock-Based Compensation Expense

The Company records stock-based compensation expense related to stock options and restricted stock units (“RSUs”). For the three months ended June 30, 2023 and 2022, the Company recorded expense of $493,632 ($36,197 of which was included within research and development expenses and $457,435 was included within general and administrative expenses on the statements of operations) and $1,036,926 ($516,669 of which was included within research and development expenses and $520,257 was included within general and administrative expenses on the statements of operations), respectively. For the six months ended June 30, 2023 and 2022, the Company recorded expense of $1,312,696 ($411,327 of which was included within research and development expenses and $901,369 was included within general and administrative expenses on the statements of operations) and $1,945,913 ($1,017,850 of which was included within research and development expenses and $928,063 was included within general and administrative expenses on the statements of operations), respectively.

11

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Restricted Stock Units

A summary of RSU activity during the six months ended June 30, 2023 is presented below:

Weighted

Average

Number of

Grant Date Value

    

RSUs

    

Per Share

RSUs non-vested January 1, 2023

 

172,800

$

1.80

Granted

 

86,205

 

2.32

Vested

 

(150,578)

 

1.80

Forfeited

 

(22,222)

 

1.80

RSUs non-vested June 30, 2023

 

86,205

$

2.32

Vested RSUs undelivered June 30, 2023

 

29,611

$

3.68

To date, RSUs have only been granted to directors in accordance with the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan. The Company’s policy is to defer settlement of such RSUs until the termination of such director’s service on the Company’s board of directors. On February 28, 2023, the Company delivered 3,289 shares of common stock in respect of RSUs upon the resignation of a director. On June 16, 2023, the Company delivered 44,444 shares of common stock in respect of RSUs based on the prior resignation of two directors.

As of June 30, 2023, there was $200,000 of unrecognized stock-based compensation expense related to RSUs which will be recognized over a weighted average period of 1.0 years.

Stock Options

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following approximate assumptions:

For the Three Months Ended

For the Six Months Ended

June 30, 

June 30,

    

2023

    

2022

    

2023

    

2022

Expected term (years)

5.50 - 10.00

 

5.09 - 5.50

5.50 - 10.00

0.58 - 10.00

Risk free interest rate

3.44% - 4.02%

2.79%

3.44% - 4.18%

0.76% - 2.79%

Expected volatility

82% - 94%

88%

82% - 95%

82% - 90%

Expected dividends

0.00%

0.00%

0.00%

0.00%

The Company has computed the fair value of stock options granted using the Black-Scholes option pricing model. Option forfeitures are accounted for at the time of occurrence. The expected term is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company uses a blended volatility calculation, the components of which are the Company’s historical volatility for the period from its initial public offering through the valuation date and the average peer-group data of six comparable entities to supplement the Company’s own historical data for the preceding years in computing the expected volatility. Accordingly, the Company is utilizing an expected volatility figure based on a review of the historical volatility of comparable entities over a period of time equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. The Company has not declared dividends, is currently in the development stage and has no plan to declare future dividends at this time.

The weighted average estimated grant date fair value of the stock options granted for the three months ended June 30, 2023 and 2022 was approximately $2.04 and $1.37 per share, respectively. The weighted average estimated grant date fair value of the stock options granted for the six months ended June 30, 2023 and 2022 was approximately $1.78 and $2.02 per share, respectively.

12

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

A summary of the option activity during the six months ended June 30, 2023 is presented below:

    

    

    

    

    

    

    

 

 

 

Average

 

Remaining

 

Aggregate

 

Number of

 

Exercise

 

Life

 

Intrinsic

 

Options

 

Price

 

In Years

 

Value

Outstanding, January 1, 2023

 

5,380,553

$

3.55

 

  

 

  

Granted

 

677,190

 

2.39

 

  

 

  

Exercised

 

(88,999)

 

1.83

 

  

 

  

Forfeited/ Expired

 

(783,666)

3.88

 

Outstanding June 30, 2023

5,185,078

$

3.37

7.1

$

962,979

Exercisable June 30, 2023

 

3,582,370

$

3.69

 

6.2

$

501,462

The following table presents information related to stock options as of June 30, 2023:

Options Outstanding

 

Options Exercisable

 

Weighted

 

Outstanding

 

Average

 

Exercisable

Exercise

 

Number of

 

Remaining Life

 

Number of

Price

    

Options

    

In Years

    

Options

$1.00 - $1.99

 

1,407,183

4.7

 

884,183

$2.00 - $2.99

 

1,473,663

6.9

 

844,473

$3.00 - $3.99

 

908,528

6.8

 

694,510

$4.00 - $4.99

 

350,500

8.1

 

216,178

$5.00 - $5.99

 

50,805

4.3

 

50,638

$6.00 - $6.99

 

843,759

6.5

 

741,748

$7.00+

 

150,640

4.8

 

150,640

5,185,078

6.2

3,582,370

As of June 30, 2023, there was $2,868,023 of unrecognized stock-based compensation expense related to stock options, which will be recognized over a weighted average period of 1.7 years.

Note 9 – Employee Benefit Plans

401(k) Plan

In April 2019, the Company adopted the Eyenovia 401(k) Plan (the “Plan”), which went into effect in May 2019. All Company employees are able to participate in the Plan, subject to eligibility requirements as outlined in the Plan documents. Under the terms of the Plan, eligible employees are able to defer a percentage of their pay every pay period up to annual limitations set by Congress and the Internal Revenue Service under Section 401(k) of the Internal Revenue Code. For 2023 and 2022, the Company’s Board of Directors approved a matching contribution equal to 100% of elective deferrals up to 4%