UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
For the quarterly period ended:
OR
For the transition period from to
COMMISSION FILE NUMBER:
(Exact name of Registrant as Specified in Its Charter)
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Securities registered pursuant to Section 12(b) of the Act:
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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.
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The number of outstanding shares of the registrant’s common stock was
EYENOVIA, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024
TABLE OF CONTENTS
1
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
EYENOVIA, INC.
Condensed Balance Sheets
| June 30, |
| December 31, | |||
| 2024 |
| 2023 | |||
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Assets |
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Current Assets |
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Cash and cash equivalents | $ | | $ | | ||
Inventories | | | ||||
Deferred clinical supply costs | | | ||||
License fee and expense reimbursements receivable | | | ||||
Security deposits, current | — | | ||||
Prepaid expenses and other current assets |
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Total Current Assets |
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Property and equipment, net |
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Deferred offering costs | | — | ||||
Security deposits, non-current |
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Intangible assets | | | ||||
Prepaid expenses, non-current | | — | ||||
Operating lease right-of-use asset | | | ||||
Equipment deposits |
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Total Assets | $ | | $ | | ||
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Liabilities and Stockholders’ (Deficiency) Equity |
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Current Liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued compensation |
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Accrued expenses and other current liabilities |
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Operating lease liabilities - current portion | | | ||||
Notes payable - current portion, net of debt discount of $ | | | ||||
Convertible notes payable - current portion, net of debt discount of $ | | — | ||||
Total Current Liabilities | | | ||||
Operating lease liabilities - non-current portion | | | ||||
Notes payable - non-current portion, net of debt discount of $ | | |||||
Convertible notes payable - net of debt discount of $ |
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Total Liabilities | | | ||||
Commitments and contingencies (Note 8) |
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Stockholders’ (Deficiency) Equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Stockholders' (Deficiency) Equity | ( | | ||||
Total Liabilities and Stockholders' (Deficiency) Equity | $ | | $ | | ||
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, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Operating Income | ||||||||||||
Revenue | $ | | $ | — | $ | | $ | — | ||||
Cost of revenue | ( | — | ( | — | ||||||||
Gross Loss | ( | — | ( | — | ||||||||
Operating Expenses: |
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Research and development | | | | | ||||||||
General and administrative |
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Reacquisition of license rights | | — | | — | ||||||||
Total Operating Expenses |
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Loss From Operations |
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Other Income (Expense): |
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Other income (expense), net | | | ( | | ||||||||
Change in fair value of equity consideration payable | | — | | — | ||||||||
Interest expense | ( |
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Interest income |
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Total Other Income (Expense) |
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Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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Net Loss Per Share - Basic and Diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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Shares Outstanding - Basic and Diluted |
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The accompanying notes are an integral part of these condensed financial statements.
3
EYENOVIA, INC.
Condensed Statements of Changes in Stockholders’ (Deficiency) Equity
(unaudited)
For the Three and Six Months Ended June 30, 2024 | ||||||||||||||
Additional | Total | |||||||||||||
Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
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Balance - January 1, 2024 |
| | $ | | $ | | $ | ( | $ | | ||||
Issuance of common stock in At the Market offering [1] |
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Stock-based compensation |
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Net loss |
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Balance - March 31, 2024 |
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Issuance of common stock in registered direct offering [2] | | | | — | | |||||||||
Issuance of common stock as consideration for licensing agreement [3] |
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Issuance of common stock as consideration for reacquisition of licensing agreement [4] |
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Issuance of common stock in At the Market offering [5] |
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Stock-based compensation | — | — | | — | | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance - June 30, 2024 | | $ | | $ | | $ | ( | $ | ( | |||||
[1]
[2]
[3]
[4]
[5]
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 | | $ | | $ | | $ | ( | $ | | |||||
Issuance of common stock in At the Market offering [1] | | | | — | | |||||||||
Cashless exercise of stock options | | | ( | — | — | |||||||||
Stock-based compensation | — | — | | — | | |||||||||
Issuance of common stock related to vested restricted stock units | | — | — | — | — | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance - March 31, 2023 | | | | ( | | |||||||||
Issuance of common stock in At the Market offering [2] | | | | — | | |||||||||
Cashless exercise of stock options | | — | — | — | — | |||||||||
Exercise of stock options | | | | — | | |||||||||
Stock-based compensation | — | — | | — | | |||||||||
Issuance of common stock related to vested restricted stock units | | | ( | — | — | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance -June 30, 2023 | | $ | | $ | | $ | ( | $ | | |||||
[1] |
[2] |
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, | ||||||
| 2024 |
| 2023 | |||
Cash Flows From Operating Activities |
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Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation | | | ||||
Change in fair value of equity consideration payable | ( | — | ||||
Depreciation of property and equipment |
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Amortization of debt discount | | | ||||
Write-off of property and equipment | | — | ||||
Write-down of inventories to net realizable value | | — | ||||
Reacquisition of license rights |
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Non-cash rent expense |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets | | ( | ||||
License fee and expense reimbursement receivables | ( | | ||||
Deferred clinical supply costs | | ( | ||||
Inventories | ( | — | ||||
Security and equipment deposits | |
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Accounts payable |
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Accrued compensation |
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Accrued expenses and other current liabilities |
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Lease liabilities | ( | ( | ||||
Net Cash Used In Operating Activities |
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Cash Flows From Investing Activities | ||||||
Purchases of property and equipment | ( | ( | ||||
Net Cash Used In Investing Activities | ( | ( | ||||
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Cash Flows From Financing Activities |
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Proceeds from sale of common stock and warrants in registered direct offering |
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Payment of registered direct offering issuance costs | ( | — | ||||
Proceeds from sale of common stock in At the Market offering |
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Payment of issuance costs for At the Market offering | ( | ( | ||||
Proceeds from exercise of stock options | — | | ||||
Proceeds from note payable and equity issued to Avenue | — | | ||||
Payment of issuance costs for notes issued to Avenue | — | ( | ||||
Repayments of notes payable |
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Net Cash Provided By Financing Activities |
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Net Decrease in Cash and Cash Equivalents |
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Cash and Cash Equivalents - Beginning of Period | |
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Cash and Cash Equivalents - End of Period | $ | | $ | | ||
The accompanying notes are an integral part of these condensed financial statements.
5
EYENOVIA, INC.
Condensed Statements of Cash Flows, continued
(unaudited)
For the Six Months Ended | ||||||
June 30, | ||||||
| 2024 |
| 2023 | |||
Supplemental Disclosure of Cash Flow Information: |
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Cash paid during the period for: |
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Interest | $ | | $ | | ||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||||||
Purchase of insurance policy financed by note payable | $ | | $ | | ||
Accrual for intangible asset milestone obligation | $ | | $ | — | ||
Reclassification of deferred clinical supply costs to inventories | $ | | $ | — | ||
Right-of-use assets obtained in exchange for lease liabilities | $ | — | $ | | ||
Vendor deposits applied to purchases of property and equipment | $ | — | $ | | ||
Original issue discount on notes payable | $ | — | $ | | ||
Cashless exercise of stock options | $ | — | $ | | ||
Common stock issued in consideration for licensing agreement | $ | | $ | — | ||
Common stock issued in consideration for reacquisition of licensing agreement | $ | | $ | — | ||
Issuance of common stock related to vested restricted stock units | $ | — | $ | | ||
The accompanying notes are an integral part of these condensed financial statements.
6
Note 1 – Business Organization, Nature of Operations and Basis of Presentation
Eyenovia, Inc. (“Eyenovia” or the “Company”) is a commercial-stage ophthalmic pharmaceutical technology company developing a pipeline of microdose array print therapeutics based on its Optejet platform. MicroPine, its leading late-stage candidate for the multi-billion dollar pediatric progressive myopia market has been licensed to Arctic Vision (Hong Kong) Limited (“Arctic Vision”) in China and South Korea. In the United States, Eyenovia is also focused on the commercialization of its two Food and Drug Administration (“FDA”)-approved products: Mydcombi (tropicamide and phenylephrine ophthalmic HCI spray) 1%/2.5% for mydriasis, as well as clobetasol propionate ophthalmic suspension 0.05% to reduce pain and inflammation following ocular surgery.
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, 2024 and for the three and six months ended June 30, 2024 and 2023. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 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, 2023 and for the year then ended, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 18, 2024 (the “2023 Form 10-K”), as amended by Amendment No. 1, filed with the SEC on April 26, 2024 (the “2023 Form 10-K Amendment”).
Note 2 – Summary of Significant Accounting Policies
The Company disclosed its significant accounting policies in Note 2 – Summary of Significant Accounting Policies included in the 2023 Form 10-K. There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2024, except as disclosed below.
Liquidity and Going Concern
As of June 30, 2024, the Company had unrestricted cash and cash equivalents of approximately $
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, 2024 and December 31, 2023, the Company had Treasury bills with original maturity dates of three months or less in the amounts of $
7
The Company has cash deposits in financial institutions 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, 2024 and December 31, 2023, the Company had cash and cash equivalent balances in excess of FDIC insurance limits of $
Clinical Supply Arrangements
Bausch + Lomb Ireland Limited (“Bausch + Lomb”) and Arctic Vision had 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
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. The cost of inventory that is sold to third parties is included within cost of sales. The Company will periodically review for slow-moving, excess or obsolete inventories.
Inventory is primarily comprised of drug-device combination products, which are available for commercial sale, as follows:
| June 30, |
| December 31, | |||
| 2024 | 2023 | ||||
Finished goods | $ | | $ | | ||
Raw materials |
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Total inventory | $ | | $ | | ||
The Company has evaluated the net realizable value of the commercial inventory. The write-down of commercial inventory to net realizable value for the three months ended June 30, 2024 and 2023 was $
8
Net Loss Per Share of Common Stock
Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, plus fully vested shares that are subject to issuance for little or no monetary consideration. Diluted loss 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, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Numerator: | ||||||||||||
Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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Denominator (weighted average quantities): |
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Common shares issued |
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Add: Undelivered vested restricted shares |
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Denominator for basic and diluted net loss per share |
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Basic and diluted net loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | ||||
The following securities are excluded from the calculation of weighted average diluted shares of common stock because their inclusion would have been anti-dilutive:
June 30, | ||||
| 2024 |
| 2023 | |
Warrants |
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Options |
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Convertible notes | | | ||
Restricted stock units |
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Total potentially dilutive shares |
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Subsequent Events
The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed.
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures (Topic 280), which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on both an annual and interim basis. The guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.
9
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard, but does not expect it to have a material impact on its financial statements.
Note 3 – Prepaid Expenses and Other Current Assets
As of June 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:
| June 30, |
| December 31, | |||
| 2024 |
| 2023 | |||
Prepaid insurance expenses | $ | | $ | | ||
Payroll tax receivable | | | ||||
Prepaid research and development expenses | | | ||||
Prepaid conference expenses |
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Prepaid general and administrative expenses |
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Prepaid patent expenses | | | ||||
Prepaid rent and security deposit |
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Prepaid professional fees | | | ||||
Prepaid board of directors fees | | | ||||
Total prepaid expenses and other current assets | $ | | $ | | ||
Note 4 - Intangible Assets
On August 15, 2023 (the “Effective Date”), the Company entered into a license agreement (the “License”) with Formosa Pharmaceuticals Inc. (“Formosa”), whereby the Company acquired the exclusive U.S. rights to commercialize any product related to a novel formulation of clobetasol propionate ophthalmic suspension,
10
Note 5 – Accrued Compensation
As of June 30, 2024 and December 31, 2023, accrued compensation consisted of the following:
| June 30, |
| December 31, | |||
| 2024 |
| 2023 | |||
Accrued bonus expenses | $ | | $ | | ||
Accrued payroll expenses |
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Total accrued compensation | $ | | $ | | ||
Note 6 – Accrued Expenses and Other Current Liabilities
As of June 30, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:
| June 30, |
| December 31, | |||
| 2024 |
| 2023 | |||
Accrued intangible asset milestone obligation | $ | | $ | — | ||
Accrued defective clinical supply settlement, net | | | ||||
Accrued research and development expenses | | | ||||
Accrued professional services | | | ||||
Credit card payable | | | ||||
Accrued franchise tax | | — | ||||
Other | | | ||||
Total accrued expenses and other current liabilities | $ | | $ | | ||
Note 7 – Notes Payable and Convertible Notes Payable
As of June 30, 2024 and December 31, 2023, notes payable and convertible notes payable consisted of the following:
June 30, 2024 |
| December 31, 2023 | ||||||||||||||||
| Notes Payable |
| Debt Discount |
| Net |
| Notes Payable |
| Debt Discount |
| Net | |||||||
Current portion: | ||||||||||||||||||
D&O insurance policy loan | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Avenue - Note payable | | ( | | | ( | | ||||||||||||
Avenue - Convertible note payable | | ( | | | | | ||||||||||||
Total current portion | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
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Non-Current portion: |
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Avenue - Note payable | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Avenue - Convertible note payable | | ( | | | ( | | ||||||||||||
Total non-current portion | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
On February 24, 2024, the Company issued a note payable in the amount of $
In June 2024, the Company made its initial principal payment related to that certain loan and security agreement (the “Loan and Security Agreement”) with Avenue Capital Management II, L.P. and related entities (together, “Avenue”) in the amount of $
11
During the three months ended June 30, 2024, the Company recorded interest expense of $
Note 8 – Commitments and Contingencies
Defective Clinical Supply
During the third quarter of 2023, a certain portion of clinical supply product sold to Bausch + Lomb was determined to be defective. On April 23, 2024, the Company and Bausch + Lomb executed a letter agreement (the “Side Letter”) pursuant to which the Company and Bausch + Lomb agreed that the Company would pay approximately $
Bausch License Agreements
On October 9, 2020, the Company entered into a license agreement (the Bausch License Agreement”), pursuant to which Bausch + Lomb was permitted to develop and commercialize the Bausch Licensed Product (as defined in the Bausch License Agreement) in the United States and Canada (the “Licensed Territory”). Bausch + Lomb could terminate the Bausch License Agreement, with respect to the Bausch Licensed Product to either country in the Licensed Territory, at any time for convenience upon
On January 12, 2024, the Company and Bausch + Lomb entered into a mutual termination and reassignment agreement (the “Letter Agreement”), pursuant to which Eyenovia reacquired the rights to the Bausch Licensed Product. The terms of the agreement include the immediate transfer of the rights and the subsequent transfer of certain assets relating to the Bausch Licensed Product from Bausch + Lomb to the Company in exchange for cash and common stock consideration. In addition, under the terms of the Letter Agreement, the Company agreed to pay Bausch + Lomb a low single-digit royalty on its net sales of the Bausch Licensed Product in the United States and Canada for a period of ten years from the date of the first commercial sale by the Company (or its affiliates or licensees) of the Bausch Licensed Product in the United States. Under the Letter Agreement, (i) the Company will re-acquire any and all licenses and other rights granted by the Company to Bausch + Lomb under the original Bausch License Agreement, (ii) any and all licenses and other rights granted by Bausch + Lomb to the Company under the License Agreement are terminated, other than as set forth in the Letter Agreement, and (iii) other than as set forth in the Letter Agreement, Bausch + Lomb is released from all of their ongoing obligations under the License Agreement, including development and commercialization obligations.
Pursuant to the Letter Agreement, the Company paid Bausch + Lomb an upfront payment of $
Pursuant to the Side Letter described above (see Defective Clinical Supply), the Company agreed to pay approximately $
12
Operating Leases
A summary of the Company’s right-of-use assets and liabilities is as follows:
| For the Six Months Ended June 30, | ||||||
2024 |
| 2023 | |||||
Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows used in operating activities | $ | | $ | | |||
Right-of-use assets obtained in exchange for lease obligations |
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Operating leases | $ | — | $ | | |||
Weighted Average Remaining Lease Term (Years) |
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Operating leases |
| years | | years | |||
Weighted Average Discount Rate |
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Operating leases |
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Future minimum payments under the Company’s operating lease agreements are as follows:
For the Years Ending December 31, |
| Minimum Lease Payments | |
2024 | $ | | |
2025 |
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2026 |
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2027 |
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Total future minimum lease payments |
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Less: Imputed interest | ( | ||
Present value of lease liabilities |
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Less: current portion |
| ( | |
Lease liabilities, non-current portion | $ | | |
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 9 – Stockholders’ (Deficiency) Equity
Increase in Authorized Number of Shares of Common Stock
On June 12, 2024, at the Annual Shareholders’ Meeting, the Company proposed and the shareholders approved an increase in authorized number of shares of common stock from
Common Stock Issuances
Pursuant to the License and certain milestone achievements, the Company issued
On May 3, 2024, the Company issued Bausch + Lomb
13
At-The-Market Offering
During the six months ended June 30, 2024, the Company received approximately $
Registered Direct Offering
On April 8, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a single fundamentals-based healthcare investor (the “Purchaser”), pursuant to which the Company agreed to sell, in a registered direct offering by the Company directly to the Purchaser (the “Offering”),
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, 2024 and 2023, the Company recorded stock-based compensation expense of $
Restricted Stock Units
A summary of the restricted stock units (“RSUs”) activity during the six months ended June 30, 2024 is presented below:
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