[1] Includes gross proceeds of $5,984,931, less total issuance costs of $533,189.

[2] Includes gross proceeds of $13,800,002, less total issuance costs of $1,304,294.

[1] Includes gross proceeds of $14,030,001, less total issuance costs of $1,071,931.

[2] Includes gross proceeds of $27,300,000, less total issuance costs of $2,752,197.

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

EYENOVIA, INC.

Condensed Statements of Cash Flows

(unaudited)

[1] Includes gross proceeds of $27,300,000, less issuance costs of $2,211,000 deducted directly from the offering proceeds.

[2] Includes gross proceeds of $14,030,001, less issuance costs of $815,052 deducted directly from the offering proceeds.

[2] Includes gross proceeds of $5,984,931, less issuance costs of $415,795 deducted directly from the private placement proceeds.

[3] Includes gross proceeds of $13,800,002, less issuance costs of $1,066,000 deducted directly from the offering proceeds.

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

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 a clinical stage ophthalmic biopharmaceutical company developing a pipeline of microdose therapeutics utilizing its patented piezo-print delivery technology, branded the Optejet^TM.array print (MAP™) therapeutics. Eyenovia aims to achieve clinical microdosing of next-generation formulations of well-established ophthalmic pharmaceutical agents using its high-precision targeted ocular delivery system branded the Optejet^®, which has the potential to replace conventional eye dropper delivery and improve safety, tolerability, patient compliance and topical delivery success for ophthalmic eye treatments. In the clinic, the Optejet has demonstrated upthe ability to horizontally deliver ophthalmic medication with a 75% reduction in ocular drug and preservative exposure, with successful topical deliverysuccess rate significantly higher than that is consistent with the efficacy of traditional eyedrop administration.eye drops (~ 90% vs. ~ 50%). Using its proprietary delivery technology, Eyenovia is developing the next generation of smart ophthalmic therapies while targetingwhich target new indications for whichor new combinations where there are currently no comparable drug therapies approved by the U.S. Food and Drug Administration (the “FDA”). Eyenovia’s microdose therapeutics follow the FDA-designated pharmaceutical registration and regulatory process. Its products are not classified by the FDA as drugs, and not medical devices or drug-device combination products.

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 September 30, 20192020 and for the three and nine months ended September 30, 20192020 and 2018.2019. The results of operations for the three and nine months ended September 30, 20192020 are not necessarily indicative of the operating results for the full year ending December 31, 20192020 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, 20182019 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 Form 10-K on March 27, 2019.30, 2020.

Note 2 – Summary of Significant Accounting Policies

Since the date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.

Liquidity and Financial Condition

TheAs of September 30, 2020, the Company has not yet generated revenues or achieved profitabilityhad cash and expects to continue to incur cash outflows from operations. The Company expects that its researchequivalents of approximately $22.9 million and developmentan accumulated deficit of approximately $73.2 million. For the nine months ended September 30, 2020 and general and administrative expenses will continue to increase and, as a result, it will eventually need to generate significant product revenues to achieve profitability. On October 29, 2019, the Company announced that it is advancing its MicroLine program for the improvementincurred net losses of approximately $15.6 million and $15.9 million, respectively, and used cash in near vision in patients with presbyopia towards Phase III development. As a resultoperations of prioritizing MicroLine, in tandem with its Mircropine (progressive myopia)approximately $11.9 million and MicroStat (mydriasis) programs,$14.9 million, respectively. Subsequent to September 30, 2020, the Company has deferred development activitiesentered into a License Agreement (the “Bausch License Agreement”) with a subsidiary of Bausch Health Companies Inc. (“Bausch Health”) pursuant to which the Company received an upfront payment from Bausch Health of $10.0 million. See Note 11 – Subsequent Events for its MicroProst (glaucoma and ocular hypertension) and MicroTears (red eye and itch relief lubrication) programs. The Company believes the re-prioritization of its programs will yield overall cost savings of approximately $1.5 million to $1.9 million in 2020.details.

The Company believes its current cash on hand, including the proceeds received from public offerings following its initial public offering,the Bausch License Agreement and warrant exercises, is sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued. Thereafter, the Company may need to raise further capital, through the sale of additional equity or debt securities, to support its future operations. The Company’s operating needs include the planned costs to operate its business, including amounts required to fund research and development activities including clinical studies, 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 manufacture its products and 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 take additional measures to reduce costs in order to conserve its cash.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 2 – Summary of Significant Accounting Policies – Continued

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.

The Company has cash deposits and U.S. treasury bills in a financial institution which, 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 September 30, 20192020 and December 31, 2018,2019, the Company had cash and cash equivalent balances in excess of FDIC insurance limits of $18,045,962$22,614,578 and $19,478,200,$13,902,601, respectively.

Stock-Based CompensationDerivative Instruments

The Company measuresevaluates its embedded conversion options and any freestanding instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the costFinancial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”). The accounting treatment of services received in exchange for an awardderivative financial instruments requires that the Company record them at their fair values as of equity instruments based on the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the award. The fair valuedate of the award is measured onevent that caused the grant date and the fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Upon the exercise of an option, the Company issues new shares of common stock out of the shares reserved for issuance under its equity plans.reclassification.

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

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 2 – Summary of Significant Accounting Policies – Continued

Recently Adopted Accounting Pronouncements

In August 2016,July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815)- Accounting for Certain Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”Instruments with Down Round Features” (“ASU 2016-15”2017-11”). The new standard will make eight targeted changes to how cash receiptsEquity-linked instruments, such as warrants and cash payments are presented and classifiedconvertible instruments may contain down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under ASU 2017-11, a down round feature will no longer require a freestanding equity-linked instrument (or embedded conversion option) to be classified as a liability that is remeasured at fair value through the income statement (i.e. marked-to-market). However, other features of cash flows.the equity-linked instrument (or embedded conversion option) must still be evaluated to determine whether liability or equity classification is appropriate. Equity classified instruments are not marked-to-market. For earnings per share ("EPS") reporting, the ASU requires companies to recognize the effect of the down round feature only when it is triggered by treating it as a dividend and as a reduction of income available to common shareholders in basic EPS. The new standard isamendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The new standard requires adoption on a retrospective basis unless it is impracticable to apply, in which case a company would be required to apply the amendments prospectively as of the earliest date practicable.2019. This standard, waswhich the Company adopted on January 1, 2019 and2020, did not have a material impact on the Company’s financial position, results of operations or cash flows.

In June 2018,March 2020, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718)”2020-03, “Codification Improvements to Financial Instruments” (“ASU 2018-07”2020-03”). ASU 2018-07 is2020-03 improves and clarifies various financial instruments topics. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to reduce costmake the standards easier to understand and complexity of financial reporting for non-employee share-based payments. Currently, the accounting requirements for non-employeeapply by eliminating inconsistencies and employee share-based payments are significantly different.providing clarifications. The Company adopted ASU 2018-07 expands the scope of Topic 718,2020-03 upon issuance, which currently only includes share-based payments to employees, to include share-based payments to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, “Equity — Equity-Based Payments to Nonemployees.” The amendments to ASU 2018 - 07 are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company’s adoption date of ASU No. 2014-09, (Topic 606), “Revenue from Contracts with Customers.” This standard was adopted on January 1, 2019 and did not have a material impact on the Company’s unaudited condensed financial position, results of operations or cash flows.statements.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 3 – Prepaid Expenses and Other Current Assets

As of September 30, 20192020 and December 31, 2018,2019, prepaid expenses and other current assets consisted of the following:

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4 – Accrued Compensation

As of September 30, 20192020 and December 31, 2018,2019, accrued compensation consisted of the following:

Note 5 – Accrued Expenses and Other Current Liabilities

As of September 30, 20192020 and December 31, 2018,2019, accrued expenses and other current liabilities consisted of the following:

Note 6 – Notes Payable

As of September 30, 2020 and December 31, 2019, notes payable consisted of the following:

On February 24, 2020, the Company issued a note payable (the “Note”) for the purchase of a directors’ and officers’ liability insurance policy. The Note is payable in nine monthly payments of $53,750 for an aggregate principal amount of $475,216. The Note accrues interest at a rate of 4.29% per year and matures on November 24, 2020. During the nine months ended September 30, 2020, the Company repaid principal on the Note in the aggregate amount of $368,289.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 6 – Notes Payable – Continued

On May 8, 2020, the Company received cash proceeds of $463,353 pursuant to a loan provided in connection with the Paycheck Protection Program under the CARES Act (the “PPP Loan”). The PPP Loan provides for monthly installment payments of $19,508 beginning in August 2021 with the remaining balance due on May 3, 2022, the maturity date. The PPP Loan bears interest at a fixed rate of 1.00% per annum.

Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company is eligible to apply for and receive forgiveness for all or a portion of its PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for certain permissible purposes as set forth in the PPP Loan, including, but not limited to, payroll costs and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”) incurred during the 24 weeks subsequent to funding, and on the maintenance of employee and compensation levels following the funding of the PPP Loan. The Company intends to use the proceeds of its PPP Loan for Qualifying Expenses. However, no assurance is provided that the Company will be able to obtain forgiveness of its PPP Loan in whole or in part. Any amounts that are not forgiven incur interest at 1.0% per annum and monthly repayments of principal and interest are deferred until six months after the Small Business Administration makes a determination on forgiveness. While the PPP Loan currently has a two-year maturity, the amended law permits the borrower to request a five-year maturity from its lender.

During the three months ended September 30, 2020 and 2019, the Company recorded interest expense of $3,824 and $0, respectively, and $9,855 and $0 for the nine months ended September 30, 2020 and 2019, respectively.

Note 67 – Commitments and Contingencies

Employment Agreements

Effective February 15, 2019, the CompanySee Note 8 – Related Party Transactions for certain commitments and contingencies entered into at-will executive employment agreements with Tsontcho Ianchulev, its Chief Executive Officer and Chief Medical Officer, John Gandolfo, its Chief Financial Officer, Jennifer Clasby, its Vice President, Clinical Operations, Luke Clauson, its Vice President, Research and Development and Manufacturing, and Michael Rowe, now its Vice President, Commercial.

Each of the employment agreements provides that if the executive’s employment is terminated by the Company without “Cause” or the executive suffers an “Involuntarily Termination” (each as defined in the employment agreements), provided that the executive has signed a full release of all claims, the executive will be entitled to receive: (i) severance pay equal to three months of his or her then-current base salary (currently estimated at approximately $419,000 in the aggregate), and (ii) a reimbursement for health insurance benefits under COBRA for the executive and his or her spouse and dependents for a period of three months or until the executive becomes eligible for comparable insurance benefits from another employer, whichever is earlier.

Each of the employment agreements also provides that if within 12 months following any “Corporate Transaction” (as defined in the employment agreements) of the Company, if the executive’s employment is terminated by the Company without Cause or the executive suffers an Involuntary Termination, provided that the executive has signed a full release of all claims, the executive will be entitled to receive, in lieu of what is described in the above paragraph: (i) severance pay equal to 12 months of his or her then-current base salary (currently estimated at approximately $1,677,000 in the aggregate), and (ii) a reimbursement for health insurance benefits under COBRA for the executive and his or her spouse and dependents for a period of 12 months or until the executive becomes eligible for comparable insurance benefits from another employer, whichever is earlier.certain related parties.

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.

Arctic Vision License Agreement

On August 10, 2020, the Company entered into a License Agreement (the “Arctic Vision License Agreement”) with Arctic Vision (Hong Kong) Limited (“Arctic Vision”) pursuant to which Arctic Vision may develop and commercialize MicroPine for the treatment of progressive myopia and MicroLine for the treatment of presbyopia in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, the Company received an upfront payment of $4.0 million, before any payments to Senju Pharmaceutical Co., Ltd. (“Senju”). The Company will record this payment as a deferred license fee in the unaudited condensed balance sheet until the payment is earned. The Company will consider payment earned once certain trial data has been submitted to Arctic Vision, permitting Arctic Vision to obtain regulatory approval with the National Medical Products Administration. In addition, the Company may receive up to a total of $41.75 million in additional payments, based on various development and regulatory milestones, including the initiation of clinical research and approvals in Greater China and South Korea, and development costs. Arctic Vision also will purchase its supply of MicroPine and MicroLine from the Company or, for such products not supplied by the Company, pay the Company a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments. The Company will pay a mid-double digit percentage of such payments, royalties, or net proceeds of such supply to Senju pursuant to its Exclusive License Agreement with Senju, as amended. See Note 8 – Related Party Transactions. During the three and nine months ended September 30, 2020, the Company did not earn any fees related to the Arctic Vision License Agreement.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 78 – Related Party Transactions

Consulting Agreements

A company in which a member of the Company’s Board of Directors is part owner iswas a party to a consulting agreement with the Company, dated July 6, 2017, that provideswhich provided for the payment of $9,567 per month, and $250 per hour for any additional work, for advisory services performed by such director. The consulting agreement was terminated on September 1, 2020. The director remains on the Board. The Company incurred expenses of $49,451$19,134 and $35,018$49,451 for the three months ended September 30, 20192020 and 2018,2019, respectively, and $151,853$57,402 and $127,478$151,853 for the nine months ended September 30, 20192020 and 2018,2019, respectively, related to the agreement which was included within general and administrative expenses on the unaudited condensed statements of operations.

Lease Agreements

The Company paid $3,000 and $4,000 per month as of July 2016 and January 2018, respectively, to a company controlled by a member of its Board of Directors for office space in New York, NY for its Chief Executive Officer. The Company left the space on August 31, 2018. During the three months ended September 30, 2019 and 2018, the Company recorded rent expense of $0 and $8,000, respectively, and $0 and $32,000 for the nine months ended September 30, 2019 and 2018, respectively, related to the office space which was included within general and administrative expenses on the condensed statements of operations.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 7 – Related Party Transactions – Continued

Lease Agreements – Continued

The Company’s Vice President of Research and Development and Manufacturing (“VP of R&D”) owns a company that entered into a lease agreement with the Company on September 15, 2016 to lease 953 square feet of space located in Reno, NV with respect to its research and development activities. The initial monthly base rent was $3,895 per month over the term of the lease and the security deposit was $3,895. On September 15, 2018, the Company amended the lease agreement to extend it until September 14, 2020 and increase the monthly base rent and security deposit to $4,012. The lease agreement was amended again on April 6, 2020 to lease additional space and increase the monthly base rent and security deposit to $5,247. On September 15, 2020, the Company agreed to extend the lease term until September 14, 2022 and increase the monthly base rent and security deposit to $5,404. The Company made $40,000$70,000 of leasehold improvements related to this lease which are included on the balance sheet. The Company’s rent expense amounted to $12,036$15,982 and $11,747$12,036 for the three months ended September 30, 20192020 and 2018,2019, respectively, and $36,108$43,512 and $35,117, respectively,$36,108 for the nine months ended September 30, 20192020 and 2018,2019, respectively.

Research and Development Activities

The VP of R&D is the sole owner and President of a company that performs contract engineering services for the Company. During the three and nine months ended September 30, 2020, the Company recognized research and development expense of $323,187 and $795,992, respectively, related to services provided by such vendor. During the three and nine months ended September 30, 2019, the Company recognized research and development expense of $197,543 and $728,103, respectively, related to services provided by such vendor. DuringThe Company had a liability of $120,584 and $89,052 to the vendor as of September 30, 2020 and December 31, 2019, respectively.

The Company recognized $46,050 and $143,437 of compensation expense related to the VP of R&D’s salary during the three and nine months ended September 30, 2018, the Company recognized research and development expense of $243,614 and $672,057, respectively, related to services provided by such vendor. The Company had a liability of $133,251 and $100,667 to the vendor as of September 30, 2019 and December 31, 2018,2020, respectively.

The Company recognized $46,010 and $140,110 of compensation expense related to the VP of R&D’s salary during the three and nine months ended September 30, 2019, respectively. The Company recognized $46,050 and $128,550 of compensation expense during the three and nine months ended September 30, 2018, respectively.

License Agreement

DuringOn March 8, 2015, the Company entered into a license agreementan Exclusive License Agreement (the “Exclusive License Agreement”) with Senju Pharmaceuticals Co., Ltd. (“Senju”) whereby the Company agreed to grant to Senju an exclusive, royalty-bearing license, with rights of sublicense, for its microdose product candidatesmedical device technology for Asiathe piezoelectric delivery of ophthalmic medications to sublicense, develop, make, have made, manufacture, use, import, market, sell, and otherwise distribute the microdose product candidates.such products in Asia. In consideration for the license, Senju agreed to pay to Eyenovia five percent (5%)5% royalties on sales (net of certain manufacturing costs) for the term of the license agreement.Exclusive License Agreement, subject to certain adjustments upon the loss of patent coverage. The agreementExclusive License Agreement will continue in full force and effect, on a country-by-country basis, until the latestlater to occur of: (i) the tenth (10th) anniversary of the first commercial sale of such a microdose product candidate in Asia;a country or (ii) the expiration of the licensed patents.patents in a country. As of the date of this filing, there had been no commercial sales of such a microdose product candidate in Asia, such thatand, therefore, no royalties had been earned. Senju is owned by the family of a former member of the Company’s Board of Directors and, together, they beneficially own greater than 5% of the Company’s common stock.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 8 – Related Party Transactions - Continued

License Agreement – Continued

On April 8, 2020, Eyenovia entered into an amendment (the “License Amendment”) to the Exclusive License Agreement. Pursuant to the License Amendment, the Company can license to any third party the right to research, develop, commercialize, manufacture or use certain products identified below (the “Senju Licensed Products”) previously licensed to Senju in China (including the People’s Republic of China, Hong Kong, Macao, and Taiwan) and South Korea (the “Territory”) if such a license is executed by the Company by April 8, 2021. The Senju Licensed Products are those using piezo-print technology in a microdose dispenser with (i) atropine sulfate as its sole active ingredient to treat myopia in humans and (ii) pilocarpine as its sole active ingredient to treat presbyopia in humans.

Pursuant to the License Amendment, the Company must pay Senju (a) close to a mid-double digit percentage of revenue on any lump-sum payments the Company receives from the third party, revenue (net of costs) obtained by the Company from contract research and/or development of the Senju Licensed Product in the Territory, and revenue (net of costs) obtained by the Company from contract manufacture for the device of the Senju Licensed Product in the Territory, the aggregate of which must be at least a high seven figure dollar amount minimum payment to Senju; and (b) a lower-double digit percentage of any sales royalty revenue the Company receives from the third party. Unless a third-party license is executed by the Company prior to April 8, 2021 (in which case, subject to early termination the License Amendment shall remain in effect for the duration of such license), the License Amendment terminates on April 8, 2021, but may be terminated earlier by Senju upon the Company’s material breach of the License Amendment, subject to a 60-day cure period.

The Exclusive License Agreement was further amended in a Letter Agreement by and between the Company and Senju on August 10, 2020 (the “Letter Agreement”).  Pursuant to the Letter Agreement, the Company will pay a mid-double digit percentage of certain payments, royalties, or net proceeds received from Arctic Vision in connection with the Arctic Vision License Agreement to Senju. During the nine months ended September 30, 2020, the Company paid Senju $1.6 million in connection with the Arctic Vision License Agreement which was recorded as deferred license costs in the Company’s unaudited condensed balance sheet and will be recognized as expense upon earning the related fee. See Note 7 – Commitments and Contingencies for additional details.

Note 89 – Stockholders’ Equity

Public OfferingEquity Incentive Plan

On July 15, 2019,April 7, 2020, the Company closed an underwritten public offeringCompany’s Board of 4,388,490Directors approved the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan (the “Restated Plan”), which stockholders approved on June 30, 2020. The Restated Plan makes certain changes to the Company’s 2018 Omnibus Stock Incentive Plan, as amended (the “2018 Plan”). For example, the Restated Plan increases the number of shares of its common stock at a public offering price of $2.78 per share. The Company granted the underwriters a 30-day over-allotment option to purchase up to an additional 658,273 shares of the Company’s common stock reserved for issuance under the 2018 Plan to 2,950,000 shares. The Restated Plan requires that all equity awards issued under the Restated Plan vest at least twelve months from the same price, which was exercised in fullapplicable grant date, subject to accelerated vesting, and provides that no dividend or dividend equivalent will be paid on July 16, 2019. Includingany unvested equity award, although dividends with respect to unvested portions of equity may accrue and be paid when, and if, the over-allotmentawards later vest and the shares are actually issued to the Company issuedgrantee. In addition, the Restated Plan sets an annual limit on the grant date fair value of awards to any non-employee director, together with any cash fees paid during the year, of $150,000, subject to certain exceptions for a totalnon-executive chair of 5,046,763 shares in the underwritten public offering, and received gross proceedsBoard. Finally, the Restated Plan makes several administrative changes to the 2018 Plan, including to clarify that awards made under the Restated Plan are intended to be exempt from or comply with Section 409(A) of approximately $14.0 million and net proceedsthe Internal Revenue Code of approximately $13.0 million, after deducting underwriting discounts, commissions and other offering expenses.1986, as amended.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 89 – Stockholders’ Equity – Continued

Securities Purchase Agreement

On March 24, 2020, the Company closed on a private placement of approximately $6.0 million of Units. Each Unit consists of (i) one share of the Company’s common stock, (ii) a one-year warrant to purchase 0.5 of a share of common stock (“Class A Warrant”), and (iii) a five-year warrant to purchase 0.75 of a share of common stock (“Class B Warrant”) (collectively, the Class A Warrants and Class B Warrants, the “Warrants”). The Units were sold to the public at a price of $2.21425 per Unit and to certain directors and executive officers at a price of $2.42625 per Unit. The Company generated approximately $5.45 million of net proceeds in the offering after deducting placement agent fees and offering expenses of $0.53 million. In the offering, the Company issued an aggregate of 2,675,293 shares of common stock, Class A Warrants to purchase up to 1,337,659 shares of common stock, and Class B Warrants to purchase up to 2,006,495 shares of common stock. The exercise price of the Class A Warrants issued to the public is $2.058 per share and the exercise price of the Class A Warrants issued to the directors and officers is $2.27 per share. The exercise price of the Class B Warrants issued to the public is $2.4696 per share and the exercise price of the Class B Warrants issued to the directors and officers is $2.724 per share. See “Warrants” below for additional details.

In connection with the private placement, on March 23, 2020, the Company also entered into a Registration Rights Agreement with the investors. Pursuant to the Registration Rights Agreement, the Company agreed to file with the SEC, no later than 30 days following the date on which the Company files its Form 10-K for the year ended December 31, 2019 with the SEC, a registration statement on Form S-3 covering the shares of common stock issued in the offering and the shares of common stock underlying the Warrants. The Company timely filed the registration statement on Form S-3 (Registration Statement No. 333-237790), which was declared and has remained effective with the SEC since May 13, 2020.

Warrants

A summary of the Warrant activity during the nine months ended September 30, 2020 is presented below:

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9 – Stockholders’ Equity – Continued

Warrants – Continued

The following table presents information related to Warrants as of September 30, 2020:

During the three months ended September 30, 2020, Warrants for the purchase of 1,080,497 shares of the Company’s common stock with exercise prices of either $2.058 or $2.4696 per share, respectively, were exercised for aggregate proceeds of approximately $2.3 million. During the nine months ended September 30, 2020, Warrants for the purchase of 1,248,161 shares of the Company’s common stock with exercise prices of either $2.058 or $2.4696 per share, respectively, were exercised for aggregate proceeds of approximately $2.6 million.

Underwritten Public Offering

On August 19, 2020, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with several underwriters (the “Underwriters”) in connection with the public offering (the “Offering”) of 3,333,334 shares of the Company’s common stock at a price of $3.60 per share, less underwriting discounts and commissions. In addition, pursuant to the terms of the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 500,000 shares of the Company’s common stock at the same price. The Underwriting Agreement contains customary representations, warranties and covenants of the Company and also provides for customary indemnification by the Company and the Underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.

The closing of the Offering occurred on August 21, 2020. At closing, the Company issued 3,833,334 shares of common stock and received net proceeds of approximately $12.5 million after deducting underwriting discounts and commissions and offering expenses of approximately $1.3 million.

The Offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-229365), including the prospectus dated February 12, 2019, as supplemented by the prospectus supplement dated August 19, 2020.

Stock Options

On January 2, 2019, stock options to purchase 180,000 and 133,686 shares of common stock with an exercise price of $1.24 and $1.95 per share, respectively, were exercised for aggregate proceeds of $483,888.

On January 14, 2019,31, 2020, the Company granted ten-year stock options to purchase an aggregate of 11,00025,000 shares of common stock to its employees under the Company’s 2018 Omnibus Stock Incentive Plan (the “2018 Plan”).Plan. The 11,000 shares vest over three years from the date of grant with one-third vesting on the one-year anniversary of the date of grant and the balance vesting monthly over the remaining 24 months, subject to continued service to the Company.months. The stock options have an exercise price of $2.74$4.68 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $27,500,$89,400, which the Company expects to recognize over the vesting period.

On February 6, 2019, stock options to purchase an aggregate of 320,001 shares of common stock with an exercise price of $1.24 per share were exercised on a cashless basis, which resulted in the issuance of an aggregate of 236,466 shares of common stock.EYENOVIA, INC.

On February 13, 2019, the Board of Directors of the Company approved the acceleration and immediate vesting of 124,210 stock options originally granted to Dr. Ianchulev on July 24, 2018 in connection with his employment. In connection with the acceleration and immediate vesting, the Company recognized $609,322 of stock-based compensation expense during the six months ended June 30, 2019, which represents the remaining unamortized grant date fair value of the award.NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9 – Stockholders’ Equity – Continued

Stock Options - Continued

On May 14, 2019, stock options to purchase 34,815 shares of common stock with an exercise price of $1.95 per share were exercised for aggregate proceeds of $67,889.

During the three months ended September 30, 2019,28, 2020, the Company granted ten-year stock options to purchase an aggregate of 681,572263,500 shares of common stock to its employees consultants and directors under the 2018 Plan, as amended. Of the 681,572Restated Plan. The shares (i) 636,287 vest over three years from the date of grant with one-third vesting on the one-year anniversary of the date of grant and the balance vesting monthly over the remaining 24 months, subject to continued service to the Company and (ii) 45,285 vest on the earlier of the one-year anniversary of the date of grant and the date of the 2020 annual stockholders meeting, subject to continued service to the Company.months. The stock options have an exercise price of $3.11$2.89 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $1,909,700,$587,100, which the Company expects to recognize over the vesting period.

On June 3, 2020, the Company granted ten-year stock options to purchase 764,419 shares of common stock to its executive officers under the Restated Plan. The shares vest over three years from the date of grant with one-third vesting on the one-year anniversary of the date of grant and the balance vesting monthly over the remaining 24 months. The stock options have an exercise price of $2.72 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $1,603,600, which the Company expects to recognize over the vesting period.

On July 28, 2020, the Company granted ten-year stock options to purchase 43,000 shares of common stock to an employee under the Restated Plan. The shares vest over three years from the date of grant with one-third vesting on the one-year anniversary of the date of grant and the balance vesting monthly over the remaining 24 months. The stock options have an exercise price of $3.71 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $122,400, which the Company expects to recognize over the vesting period.

On September 8, 2020, the Company granted ten-year stock options to purchase 45,000 shares of common stock to employees and consultants under the Restated Plan. The shares vest over three years from the date of grant with one-third vesting on the one-year anniversary of the date of grant and the balance vesting monthly over the remaining 24 months. The stock options have an exercise price of $3.48 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $126,700, which the Company expects to recognize over the vesting period.

On September 11, 2020, the Company granted ten-year stock options to purchase 58,920 shares of common stock under the Restated Plan to members of its Board of Directors. The shares vest on the earlier of (i) the one-year anniversary of the date of grant and (ii) the date of the 2021 annual stockholders meeting, subject to the grantee remaining on the Board until then. The stock options have an exercise price of $3.43 per share, which represents the Company’s closing stock price on the date of grant. The stock options had a grant date fair value of $155,400, which the Company expects to recognize over the vesting period.

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

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 does not yet have a trading history to support its historical volatility calculations. Accordingly, the Company is utilizing an expectedused a blended volatility figure based on a review of thewhereby it uses its historical volatility for the period from its IPO through the valuation date and uses the average of peer-group data of six comparable entities over a period of time equivalent to supplement its own historical data for the preceding years in computing its expected life of the instrument being valued.volatility. 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.

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9 – Stockholders’ Equity – Continued

Stock Options – Continued

The weighted average estimated grant date fair value of the stock options granted for the three and nine months ended September 30, 2020 and 2019 was approximately $3.11$2.71 and $3.10$3.11 per share, respectively. The weighted average estimated grant date fair value of the stock options granted for the three and nine months ended September 30, 20182020 and 2019 was approximately $5.66$2.24 and $6.39$3.10 per share, respectively.

A summary of the stock option activity during the nine months ended September 30, 2020 is presented below:

The following table presents information related to stock options as of September 30, 2020:

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 89 – Stockholders’ Equity – Continued

Stock Options – ContinuedOption Exercises

A summary ofDuring the option activity during thethree and nine months ended September 30, 2019 is presented below:

The following table presents information related to2020, stock options asfor the purchase of September 30, 2019: