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: ~~September~~June 30, ~~2022~~2023

☐ 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 ~~Par Value~~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 was38,211,808~~36,112,987~~ as of ~~November 10, 2022~~August 8, 2023.

Table of Contents

EYENOVIA, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.		2

Condensed Balance Sheets as of ~~September~~June 30, ~~2022~~2023 (Unaudited) and December 31, ~~2021~~2022		2

Unaudited Condensed Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022		3

Unaudited Condensed Statements of Changes in Stockholders’ Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022		4

Unaudited Condensed Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022		5

Notes to Unaudited Condensed Financial Statements		76

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		1814

Item 3. Quantitative and Qualitative Disclosures About Market Risk.		2420

Item 4. Controls and Procedures.		2421

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.		2622

Item 1A. Risk Factors.		2622

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		2622

Item 3. Defaults Upon Senior Securities.		2622

Item 4. Mine Safety Disclosures.		2622

Item 5. Other Information.		2622

Item 6. Exhibits.		2723

SIGNATURES		2824

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

EYENOVIA, INC.

Condensed Balance Sheets

September 30,

December 31,

2022

2021

(unaudited)

Assets








Current Assets:




Cash and cash equivalents

$
17,398,605

$
19,461,850
Restricted cash

7,875,000

7,875,000
Deferred clinical supply costs

1,871,096

—
License fee and expense reimbursements receivable

809,430

1,805,065
Prepaid expenses and other current assets

1,463,020

721,438

Total Current Assets

29,417,151

29,863,353

Property and equipment, net

1,342,657

1,271,225
Security deposits

200,153

132,539
Equipment deposits

445,530

391,941

Total Assets

$
31,405,491

$
31,659,058


Liabilities and Stockholders’ Equity




Current Liabilities:


Accounts payable

$
1,104,959

$
1,614,104
Accrued compensation

1,268,009

1,543,618
Accrued expenses and other current liabilities

1,384,803

845,719
Deferred rent - current portion

28,999

18,685
Notes payable

7,229,013

7,150,368
Total Current Liabilities

11,015,783

11,172,494
Deferred rent - non-current portion

60,540

19,949

Total Liabilities

11,076,323

11,192,443




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 September 30, 2022 and December 31, 2021

—

—
Common stock, $0.0001 par value, 90,000,000 shares authorized; 35,525,689 and 28,426,616 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

3,553

2,844
Additional paid-in capital

132,432,682

110,683,077
Accumulated deficit

(112,107,067)

(90,219,306)
Total Stockholders’ Equity

20,329,168

20,466,615
Total Liabilities and Stockholders’ Equity

$
31,405,491

$
31,659,058


	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.

Table of Contents

EYENOVIA, INC.

Condensed Statements of Operations

(unaudited)


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2022		2021		2022		2021
Operating Income
Revenue	$	—	$	—	$	—	$	4,000,000
Cost of revenue		—		—		—		(1,600,000)
Gross Profit		—		—		—		2,400,000
									2023		2022		2023		2022
Operating Expenses:
Research and development		3,876,876		3,552,068		11,176,326		11,559,364	$	2,811,061	$	3,586,866	$	5,333,011	$	7,299,450
General and administrative		3,353,352		2,372,999		10,362,907		6,914,481		3,149,809		3,534,590		6,086,695		7,009,555
Total Operating Expenses		7,230,228		5,925,067		21,539,233		18,473,845		5,960,870		7,121,456		11,419,706		14,309,005

Loss From Operations		(7,230,228)		(5,925,067)		(21,539,233)		(16,073,845)		(5,960,870)		(7,121,456)		(11,419,706)		(14,309,005)

Other Income (Expense):
Extinguishment of PPP 7(a) loan		—		463,353		—		463,353
Other income, net		70,277		11,728		96,580		48,880		119,450		33,376		190,443		26,303
Interest expense		(177,138)		(119,212)		(475,811)		(202,407)		(558,003)		(153,436)		(1,012,006)		(298,673)
Interest income		28,093		600		30,703		2,354		183,563		2,416		286,043		2,610

Net Loss	$	(7,308,996)	$	(5,568,598)	$	(21,887,761)	$	(15,761,665)	$	(6,215,860)	$	(7,239,100)	$	(11,955,226)	$	(14,578,765)

Net Loss Per Share - Basic and Diluted	$	(0.21)	$	(0.21)	$	(0.67)	$	(0.61)	$	(0.16)	$	(0.22)	$	(0.32)	$	(0.46)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		34,631,774		26,053,532		32,778,551		25,773,098		38,093,826		33,644,867		37,753,694		31,836,582

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

Table of Contents

EYENOVIA, INC.

Condensed Statements of Changes in Stockholders’ Equity

(unaudited)

For the Three and Nine Months Ended September 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
Issuance of common stock in At the Market offering [3]

1,876,314

188

3,098,506

—

3,098,694
Stock-based compensation

—

—

928,733

—

928,733
Issuance of common stock related to vested restricted stock units

26,322

2

(2)

—

—
Net loss

—

—

—

(7,308,996)

(7,308,996)
Balance - September 30, 2022

35,525,689

$
3,553

$
132,432,682

$
(112,107,067)

$
20,329,168


	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 ~~$14,981,299~~$3,607,827 less total issuance costs of ~~$83,391.~~$108,235.

[2]	Includes gross proceeds of ~~$886,974,~~$415,588 less total issuance costs of ~~$26,609.~~

~~[3]~~

~~Includes gross proceeds of $3,194,530, less total issuance costs of $95,836.~~$12,468.

For the Three and Nine Months Ended September 30, 2021

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders’


Shares

Amount

Capital

Deficit

Equity
Balance - January 1, 2021

24,978,585

$
2,498

$
92,742,306

$
(77,440,919)

$
15,303,885
Exercise of stock warrants

644,992

65

1,530,925

—

1,530,990
Stock-based compensation

—

—

656,913

—

656,913
Net loss

—

—

—

(5,351,667)

(5,351,667)
Balance - March 31, 2021

25,623,577

$
2,563

$
94,930,144

$
(82,792,586)

$
12,140,121
Exercise of stock warrants

232,022

23

572,978

—

573,001
Exercise of stock options

91,047

9

130,081

—

130,090
Issuance of SVB warrants [1]

—

—

351,390

—

351,390
Stock-based compensation

—

—

637,355

—

637,355
Net loss

—

—

—

(4,841,400)

(4,841,400)
Balance - June 30, 2021

25,946,646

$
2,595

$
96,621,948

$
(87,633,986)

$
8,990,557
Exercise of stock options

16,539

2

46,710

—

46,712
Stock-based compensation

—

—

777,467

—

777,467
Net loss

—

—

—

(5,568,598)

(5,568,598)
Balance – September 30, 2021

25,963,185

$
2,597

$
97,446,125

$
(93,202,584)

$
4,246,138


	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]	~~Allocated fair value~~Includes gross proceeds of ~~warrants of $354,539,~~$14,981,299 less ~~allocated~~total issuance costs of ~~$3,149.~~$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.

Table of Contents

EYENOVIA, INC.

Condensed Statements of Cash Flows

(unaudited)

For the Nine Months Ended

September 30,


2022

2021
Cash Flows From Operating Activities




Net loss

$
(21,887,761)

$
(15,761,665)
Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

2,874,646

2,071,735
Depreciation of property and equipment

228,898

148,245
Amortization of debt discount

78,645

41,944
Write-off of property and equipment

209,040

—
Extinguishment of PPP 7(a) Loan

—

(463,353)
Changes in operating assets and liabilities:

Prepaid expenses and other current assets

(66,250)

35,549
License fee and expense reimbursements receivables

995,635

2,005,859
Deferred clinical supply costs

(1,871,096)

—
Deferred license costs

—

1,600,000
Security deposits

(67,614)

—
Accounts payable

(509,145)

223,068
Accrued compensation

(275,609)

33,564
Accrued expenses and other current liabilities

539,084

(928,356)
Deferred license fee

—

(4,000,000)
Deferred rent

50,905

(4,397)
Net Cash Used In Operating Activities

(19,700,622)

(14,997,807)

Cash Flows From Investing Activities

Purchases of property and equipment

(509,370)

(1,165,066)
Vendor deposits for property and equipment

(53,589)

—
Net Cash Used In Investing Activities

(562,959)

(1,165,066)

Cash Flows From Financing Activities

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

14,981,299

—
Net issuance of common stock in At the Market Offering [2]

3,959,059

—
Proceeds from exercise of stock warrants

18,701

2,103,991
Proceeds from SVB loan

—

7,500,000
Repayments of notes payable

(675,332)

(547,259)
Payment of offering issuance costs

(83,391)

—
Payment of loan issuance costs

—

(66,618)
Proceeds from exercise of stock options

—

176,802
Net Cash Provided By Financing Activities

18,200,336

9,166,916
Net Decrease in Cash and Cash Equivalents and Restricted Cash

(2,063,245)

(6,995,957)
Cash, cash equivalents and restricted cash - Beginning of Period

27,336,850

28,371,828
Cash, cash equivalents and restricted cash - End of Period

$
25,273,605

$
21,375,871

~~[1]~~

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

~~[2]~~

~~Includes gross proceeds of $4,081,504, less total issuance costs of $122,445.~~


	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

~~Table of Contents~~

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




Cash and cash equivalents

$
17,398,605

$
13,500,871
Restricted cash

7,875,000

7,875,000

$
25,273,605

$
21,375,871
Supplemental Disclosure of Cash Flow Information:






Cash paid during the periods for:

Interest

$
315,550

$
131,839

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Purchase of insurance premium financed by note payable

$
675,332

$
705,360
Issuance of SVB stock warrants

$
—

$
351,390
Issuance of common stock related to vested restricted stock units

$
9

$
—


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.

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 ~~a pre-commercial~~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 aims to achieve precision in ophthalmic drug delivery of novel and existing ophthalmic pharmaceutical agents. The precise delivery of a low-volume columnar spray by the Optejet® device also minimizes contamination with a non-protruding nozzle and self-closing shutter. The Company believes that this technology could ultimately replace eye droppers by advancing drug delivery beyond the limitations of patient coordination, drug overexposure, gravity, contamination potential, and discomfort towards a more precise, comfortable, and successful drug administration for improved patient care. The ergonomic and functional design of the Optejet® delivers microdroplets horizontally faster than the blink reflex to minimize instillation discomfort and overflow spillage, providing a more comfortable experience. In the clinic, the Optejet® has demonstrated that its targeted delivery achieves a significantly high rate of successful administration of 98% upon first attempt compared to the established rate reported with traditional eye drops of ~ 50%. The diagnostics and therapeutics in the Company’s pipeline have been tested in randomized controlled trials and demonstrated significant results in improving the benefit to risk profile for drug delivery. For example, the Company’s deliberately designed technology provides a 75% reduction in ocular drug and preservative exposure to significantly improve the therapeutic index in drugs used for presbyopia, mydriasis and intraocular pressure (“IOP”) lowering through eight clinical trials. Eyedrops expose the ocular surface to approximately 300% more medication and preservatives that can lead to unintended effects and induce collateral tissue damage. Drug delivery via the Optejet device reduces ocular exposure to preservatives comparable to that of non-preserved formulations demonstrating potentially less surface damage from ocular stress. To address unmet medical needs, the Company is developing the next generation of smart ophthalmic therapeutics to target new indications or new combinations where there are currently no or few drug therapies approved by the U.S. Food and Drug Administration (“FDA”). The Company’s investigational products are classified by the ~~FDA~~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, ~~(“CDER”)~~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, ~~(“NDAs”).~~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 ~~September~~June 30, ~~2022~~2023 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022. The results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the operating results for the full year ending December 31, ~~2022~~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, ~~2021~~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 ~~30, 2022.~~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, ~~2021,~~2022, there have been no material changes to the Company’s significant accounting ~~policies.~~policies, except as disclosed below.

~~Liquidity and~~ Going Concern

As of ~~September~~June 30, ~~2022,~~2023, the Company had ~~unrestricted~~ cash and cash equivalents in the aggregate amount of approximately ~~$17.4 million and an accumulated deficit of approximately $112.1~~$17.5 million. For the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company incurred net losses of approximately ~~$21.9~~$12.0 million and ~~$15.8~~$14.6 million, respectively, and used cash in operations of approximately ~~$19.7~~$11.7 million and ~~$15.0~~$12.9 million, respectively. Subsequent to September 30, 2022, the Company received approximately $1.3 million in net proceeds from the sale of 587,298 shares of common stock pursuant to the Company’s At-the-Market Offering program with SVB Leerink. Also subsequent to September 30, 2022, the Company used its $7.9 million of restricted cash and $0.1 million of unrestricted cash in order to repay the Loan and Security Agreement, dated May 7, 2021 (the “SVB Loan”) with Silicon Valley Bank (“SVB”), including $7.5 million of principal, a final payment of $0.4 million and a prepayment fee of $0.1 million.

~~Table of Contents~~

~~EYENOVIA, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

The Company does not have recurring revenue, ~~and~~ has not yet achieved ~~profitability.~~profitability and may never become profitable. The Company expects to continue to incur cash outflows from operations. ~~The Company expects that its research~~Research and development and general and administrative expenses will continue to ~~increase~~be incurred by the Company and, as a result, itthe 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 ~~commercialize its products and~~ 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~~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.

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.~~

~~Cash and cash equivalents that are restricted as to withdrawal or use under the terms~~statements.As of certain executed agreements are recorded as Restricted Cash on the balance sheets, such as the collateralized money market account pursuant to the SVB Loan, as amended on September 29, 2021 by the First Amendment to the Loan and Security Agreement (the “First Amendment”). See Note 6 - Notes Payable. In connection with the First Amendment,June 30, 2023, the Company ~~pledged to establish and maintain a collateralized money market account~~had Treasury bills with original maturity dates of three months or less in the amount of $7,875,000. Subsequent to September 30, 2022, the Company used this entire collateralized money market account plus $0.1 million of unrestricted cash in order to repay the SVB Loan, including $7.5 million of principal, a final payment of $0.4 million and a prepayment fee of $0.1 million.$4,493,766.

The Company has cash deposits in a financial institution ~~which,~~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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had cash balances in excess of FDIC insurance limits of ~~$24,773,605~~$12,474,323 and ~~$26,836,850,~~$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:


	September 30,		June 30,
	2022	2021	2023	2022
Options	5,484,687	3,410,540	5,185,078	4,926,750
Warrants	6,087,845	2,095,993	6,087,845	6,087,845
Convertible notes			2,327,747	—
Restricted stock units	172,800	105,306	86,205	111,110
Total potentially dilutive shares	11,745,332	5,611,839	13,686,875	11,125,705

~~Table of Contents~~

~~EYENOVIA, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~Revenue Recognition~~

The Company’s revenues are generated primarily through research, development and commercialization agreements. The terms of such agreements may contain multiple promised goods and services, which may include (i) licenses to its intellectual property, and (ii) in certain cases, payment in connection with the manufacturing and delivery of clinical supply materials. Payments to us under these arrangements typically include one or more of the following: non-refundable, upfront license fees; milestone payments; payments for clinical product supply, and royalties on future product sales.

The Company analyzes its arrangements to assess whether such arrangements involve joint operating activities. For collaboration arrangements that are deemed to be within the scope of Accounting Standards Codification (“ASC”) Topic 808, “Collaborative Arrangements” (“ASC 808”), the Company allocates the contract consideration between such joint operating activities and elements that are reflective of a vendor-customer relationship and, therefore, within the scope of ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company’s policy is to recognize amounts allocated to joint operating activities as a reduction in research and development expense.

Under ASC 606, we recognize revenue when our customers obtain control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps:

●

~~Step 1:~~ ~~Identify the contract with the customer;~~

●

~~Step 2:~~ ~~Identify the performance obligations in the contract;~~

●

~~Step 3:~~ ~~Determine the transaction price;~~

●

~~Step 4:~~ ~~Allocate the transaction price to the performance obligations in the contract; and~~

●

~~Step 5:~~ ~~Recognize revenue when the company satisfies a performance obligation.~~

The Company must make significant judgments in its revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. In addition, arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered discretionary purchase options. The Company assesses whether these options provide a material right to the customer and if so, they are considered performance obligations.

For upfront license fees, the Company must consider how many performance obligations are in the contract and, if more than one, how to allocate the fee to those performance obligations upon satisfaction of the performance obligation(s). Milestone payments represent variable consideration that will be recognized when the performance obligation is achieved. Sales-based royalty payments derived from usage of intellectual property are recognized when those sales occur.

During 2020, the Company entered into a license agreement (the “Arctic Vision License Agreement”) with Arctic Vision (Hong Kong) Limited (“Arctic Vision”) and a license agreement (the “Bausch License Agreement”) with Bausch + Lomb, Inc. (“Bausch + Lomb”). Each license has three revenue components:

~~an upfront license fee;~~

~~milestone payments and~~

~~royalty payments.~~

~~Deferred License Fee~~

The Company enters into license agreements which provide for the receipt of non-refundable, upfront licensing payments. These payments are recorded as deferred license fees and will be earned and recognized as revenue upon the satisfaction of performance obligations. See Note 7 ~~– Commitments and Contingencies for additional details.~~

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. ~~Our~~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.

~~Reclassifications~~

Certain prior period balances 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.

Recently Adopted Accounting Standards

~~On May 3, 2021,~~In June 2016, the ~~Financial Accounting Standards Board (the “FASB”)~~FASB issued ~~Accounting Standards Update (“ASU”)~~ASU No. ~~2021-04, “Earnings Per Share~~2016-13, “Financial Instruments - Credit Losses (Topic ~~260), Debt—Modifications~~326)” and ~~Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718),~~also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ~~Derivatives~~ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires the measurement and ~~Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting~~recognition of expected credit losses for ~~Certain Modifications or Exchanges~~financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of Freestanding Equity-Classified Written Call Options.” This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectivelyforward-looking information to ~~modifications or exchanges occurring after the effective date of the new standard.~~calculate credit loss estimates. The Company adopted ASU ~~2021-04 effective~~2016-13 on January 1, ~~2022. This standard~~2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash ~~flow.~~

~~Soon To Be Adopted Accounting Standards~~flows.

In ~~February 2016,~~August 2020, the FASB issued ASU ~~2016-02 “Leases (Topic 842)~~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 ~~2016-02”).~~2020-06 improves disclosure requirements for convertible instruments and earnings-per-share guidance. ASU ~~2016-02 requires that a lessee recognize~~2020-06 also revises the ~~assets and liabilities that arise from operating leases. A lessee should recognize~~derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in ~~the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset~~this update are effective for the ~~lease term. ASU 2016-02, as amended, is now effective for emerging growth companies for~~Company in fiscal years beginning after December 15, ~~2021,~~2023, and interim periods within those fiscal ~~years beginning after December 15, 2022.~~years. Early adoption is permitted. The Company ~~plans~~early adopted ASU 2020-06 effective January 1, 2023 which eliminates the need to ~~adopt ASU 2016-02 on December 31, 2022 and expects that~~assess whether a beneficial conversion feature needs to be recognized upon the issuance of new convertible instruments. The adoption of ~~this~~ ASU ~~will~~2020-06 did not have a material impact on the Company’s financial ~~statements, primarily as a result~~position, results of ~~recording right-of-use assets and lease liabilities for its operating leases in the approximate amounts of $1.3 million and $1.4 million, respectively.~~operations or cash flows.

Note 3 – Prepaid Expenses and Other Current Assets

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, prepaid expenses and other current assets consisted of the following:


	September 30,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Payroll tax receivable		621,063		343,785	$	645,566	$	660,891
Prepaid insurance expenses		455,150		171,370		600,607		201,082
Prepaid general and administrative expenses		185,845		71,375		310,701		87,982
Prepaid research and development expenses						83,192		2,521
Prepaid patent expenses						73,157		38,796
Prepaid conference expenses		100,803		12,586		69,400		97,743
Prepaid patent expenses		49,183		32,797
Prepaid rent and security deposit						18,750		74,959
Other		32,226		4,525		—		26,745
Prepaid security deposits		18,750		18,750
Prepaid board of directors fees		—		66,250
Total prepaid expenses and other current assets	$	1,463,020	$	721,438	$	1,801,373	$	1,190,719

108

Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4 – Accrued Compensation

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, accrued compensation consisted of the following:

September 30,

December 31,

2022

2021
Accrued bonus expenses

$
971,159

$
1,245,795
Accrued payroll expenses

296,850

297,823
Total accrued compensation

$
1,268,009

$
1,543,618


	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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, accrued expenses and other current liabilities consisted of the following:


	September 30,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Accrued consulting and professional services					$	142,915	$	320,000
Accrued research and development expenses	$	711,710	$	436,840		117,983		35,524
Accrued consulting and professional services		386,712		250,000
Accrued interest		152,969		94,792
Accrued leasehold improvements						—		92,528
Credit card payable		58,799		20,000		58,549		50,639
Accrued franchise tax		39,300		1,680		26,201		—
Accrued travel and entertainment expenses						13,784		—
Other		29,647		42,407		3,999		4,385
Accrued travel and entertainment expenses		5,666		—
Total accrued expenses and other current liabilities	$	1,384,803	$	845,719	$	363,431	$	503,076

Note 6 – Notes Payable

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, notes payable consisted of the following:


	September 30, 2022						December 31, 2021						June 30, 2023						December 31, 2022
	Notes Payable		Debt Discount		Net		Notes Payable		Debt Discount		Net		Notes Payable		Debt Discount		Net		Notes Payable		Debt Discount		Net
Silicon Valley Bank loan	$	7,500,000	$	(270,987)	$	7,229,013	$	7,500,000	$	(349,632)	$	7,150,368
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, ~~2022,~~2023, the Company issued a note payable in the amount of $609,140 for the purchase of a directors and ~~officers~~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 ~~had an aggregate principal balance of $675,332 and was~~is payable in six monthly payments of $103,639 consisting of principal and ~~interest amounting to $113,628 per payment. The note accrued interest at a rate of 3.26% per year and matured on August 24, 2022.~~interest. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company repaid ~~the full~~$403,689 of principal ~~balance of $675,332~~owed on the D&O Loan.

During the three months ended September 30, 2022, the Company recorded interest expense of $177,138, of which $176,215 is related to the SVB Loan (including amortization of debt discount of $26,214) and $923 is related to the D&O Loan. During the nine months ended September 30, 2022, the Company recorded interest expense of $475,811, of which $469,376 is related to the SVB Loan (including amortization of debt discount of $78,645) and $6,435 is related to the D&O Loan.

~~SVB Loan Amendment~~

On May 6, 2022, the Company and SVB agreed to amend the terms of the SVB Loan dated May 7, 2021. Pursuant to the amendment, the repayment term of the SVB Loan is reduced to 24 consecutive calendar months and the date that the first payment is due by the Company is extended to June 1, 2023. The amendment did not result in a 10% change in the net present value of the SVB Loan cash flows and, accordingly, the amendment was accounted for as a modification (a continuation of the original loan).

119

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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 ~~SVB~~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 ~~repaid in full in November 2022. See Note 10 – Subsequent Events.~~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

~~Employment Agreements~~Operating Leases

On February 14, 2022, the Compensation Committee of the Board of Directors of the Company (the “Board”) approved amendments to the Employment Agreements with its executive officers (the “Employment Agreement Addendums”). Each of the Employment Agreement Addendums provides that if the executive’s employment is terminated by the Company without “Cause” or the executive suffers an “Involuntary 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 twelve months of his or her then-current base salary (estimated at approximately $1,517,000 in the aggregate as of the date of the Employment Agreement Addendums), and (ii) a reimbursement for health insurance benefits under COBRA for the executive and his or her spouse and dependents for a period of twelve months or until the executive becomes eligible for comparable insurance benefits from another employer, whichever is earlier.

~~Transition of Chief Executive Officer~~

On July 27, 2022, the Company announced the appointment of Michael Rowe as its new Chief Executive Officer, effective August 1, 2022, with Dr. Tsontcho Ianchulev becoming Executive Chairman of the Board. Mr. Rowe is also serving as a member of the Board.

~~On July 26, 2022,~~In June 2023, the Company entered into an Employment Agreement (the “Employment Agreement”) with Mr. Rowe under which he will serve as Chief Executive Officer of the Company. Under the terms of the Employment Agreement, Mr. Rowe will receive an annual salary of $575,000. He is eligibleextension agreement to receive a cash bonus of up to 60% of his base salary. Additionally, Mr. Rowe received an option to purchase 440,000 shares of the Company’s common stock, pursuant to the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan, as amended. Mr. Rowe will also continue to participate in any and all benefit plans, from time to time, in effectrenew its lease for senior management, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from time to time. As a result of the change of salary, the aggregate potential severance pay for the executive officers of the Company is approximately ~~$1,004,000.~~

The Company also entered into an agreement with Dr. Ianchulev (the “Executive Chairman Agreement”) pursuant to which Dr. Ianchulev will provide medical expertise and consultation related to the Company’s research and development programs, and such other matters as reasonably requested by the Company for an initial period of one year. In consideration for Dr. Ianchulev’s services, the Company has agreed to provide Dr. Ianchulev with a $5,000 monthly retainer throughout the term of the agreement, in addition to the compensation payable to all non-employee members of the Board.

~~Operating Leases~~

~~The Company leased 953~~3,800 square feet of office space in ~~Reno, Nevada~~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 ~~research and development activities~~a total of approximately 6,700 square feet. The leases were due to expire on August 31, 2023. The leases were extended from ~~a company owned by~~September 1, 2023 to August 31, 2025.

A summary of the Company’s ~~former Vice President of Research~~right-of-use assets and ~~Development. The lease,~~liabilities as amended, expired on September 14, 2022 and provided for lease payments of $5,404 per month and a security deposit in the amount of $5,404. The Company has remained in the premises on a month-to-month basis at the same rental rate. Since the inception of the lease, the Company has made $112,600 of leasehold improvements related to this lease which have been fully amortized on the accompanying balance sheets. The Company’s rent expense for this space is recorded in Research and Development on the condensed statement of operations and amounted to $16,212 for the three months ended September 30, 2022 and 2021, and $48,636 for the nine months ended September 30, 2022 and 2021.follows:

On April 8, 2022, the Company agreed to enter into a lease agreement for a new office space of 3,916 square feet commencing on June 1, 2022 in Laguna Hills, CA. The lease expires on July 31, 2027 and provides for lease payments of $9,203 per month payable on the first day of each month commencing September 1, 2022, and a security deposit of $11,400. The Company’s rent expense for this space is recorded in General and Administrative on the condensed statement of operations and amounted to $28,371 during the three months ended September 30, 2022 and $37,828 during the nine months ended September 30, 2022.


	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	%

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Table of Contents

EYENOVIA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

~~On May 19, 2022,~~Future minimum payments under all of the ~~Company agreed to enter into a~~Company’s operating lease agreement with a non-related party for a new office space located in Reno, Nevada of 10,881 square feet commencing on May 23, 2022. The amended lease expires on September 23, 2027 with an option to extend the lease for an additional period of 60 months, and provides for lease payments ranging from $13,056 per month to $16,663 per month and a security deposit of $53,000. The Company’s rent expense for this space is recorded in Research and Development on the condensed statement of operations and amounted to $41,238 during the three months ended September 30, 2022 and $59,787 during the nine months ended September 30, 2022.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

~~At-The-Market Offerings~~

~~December 2021 Sales Agreement~~

On December 14, 2021, the Company entered into a Sales Agreement (the “December 2021 Sales Agreement”) with SVB Leerink under which the Company may offer and sell, from time to time at its sole discretion, shares of common stock for gross proceeds of up to $50.0 million through SVB Leerink as its sales agent (the “At-the-Market Offering”). The Company’s prior sales agreement, with SVB Leerink, entered into in May 2021, was terminated upon the effectiveness of the December 2021 Sales Agreement. The issuance and sale of shares, if any, of common stock by the Company under the December 2021 Sales Agreement will be pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-261638) filed with the SEC on December 14, 2021 (the “Registration Statement”), and the prospectus relating to the At-the-Market Offering filed therewith that forms a part of the Registration Statement.

Subject to the terms and conditions of the December 2021 Sales Agreement, SVB Leerink may sell the common stock by any method permitted by law deemed to be an “at –the- market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. SVB Leerink will use commercially reasonable efforts to sell the common stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay SVB Leerink a commission equal to three percent (3.0)% of the gross sales proceeds of any common stock sold through SVB Leerink under the December 2021 Sales Agreement, and also has provided SVB Leerink with certain indemnification rights. Through September 30, 2022, the Company received approximately $4.0 million in net proceeds from the sale of 2,128,763 shares of its common stock pursuant to the December 2021 Sales Agreement.

~~Securities Purchase Agreement~~

On March 3, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional and accredited investor (the “Purchaser”), relating to the issuance and sale of 3,000,000 shares (the “Shares”) of common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 1,870,130 shares of common stock and warrants to purchase an aggregate of 4,870,130 shares of common stock (the “Investor Warrants”) in a registered direct offering (the “March 2022 Offering”). The Company determined that the warrants qualified for equity classification.

The offering price for the Shares was $3.08 per Share and the offering price for the Pre-Funded Warrants was $3.07 per Pre-Funded Warrant, which represents the per Share public offering price less $0.01 per share exercise price for each Pre-Funded Warrant. The Investor Warrants have an exercise price of $3.54 per share and each Investor Warrant is exercisable for one share of common stock. The Investor Warrants will be exercisable beginning six months from the date of issuance and the Pre-Funded Warrants are exercisable immediately upon issuance. The Pre-Funded Warrants shall terminate when fully exercised and the Investor Warrants will terminate five years from the initial exercisability date. The aggregate gross proceeds to the Company from the March 2022 Offering were approximately $15 million with aggregate issuance costs of approximately $83,000, excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants and the Investor Warrants. No underwriter or placement agent participated in the March 2022 Offering.

~~Table of Contents~~

~~EYENOVIA, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

The March 2022 Offering was made pursuant to an effective registration statement on Form S-3 (Registration Statement No. 333-261638), as previously filed with and declared effective by the Securities and Exchange Commission and a related prospectus.

Equity Incentive Plan

On June ~~16, 2022,~~27, 2023, the Company’s stockholders approved an amendment to the Company’s Amended and Restated 2018 Omnibus Stock Incentive Plan, reserving an additional ~~1,500,000~~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 ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded expense of ~~$928,733~~$493,632 ($~~420,619~~36,197 of which was included within research and development expenses and ~~$508,114~~$457,435 was included within general and administrative expenses on the statements of operations) and ~~$777,467~~$1,036,926 ($~~489,121~~516,669 of which was included within research and development expenses and ~~$288,343~~$520,257 was included within general and administrative expenses on the statements of operations), respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded expense of ~~$2,874,646~~$1,312,696 ($~~1,438,469~~411,327 of which was included within research and development expenses and ~~$1,436,177~~$901,369 was included within general and administrative expenses on the statements of operations) and ~~$2,071,735~~$1,945,913 ($~~1,138,331~~1,017,850 of which was included within research and development expenses and ~~$933,401~~$928,063 was included within general and administrative expenses on the statements of operations), respectively.

~~Restricted Stock Units~~

~~A summary of the restricted stock units activity during the nine months ended September 30, 2022 is presented below:~~

Weighted

Average

Number of

Grant Date Value

RSUs

Per Share
RSUs non-vested January 1, 2022

41,778

$
3.59
Granted

193,304

1.93
Vested

(55,319)

3.37
Forfeited

(6,963)

3.59
RSUs non-vested September 30, 2022

172,800

$
1.80

Vested RSUs undelivered September 30, 2022

41,086

$
3.64

To date, the 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 not to deliver shares underlying the RSUs until the termination of service.

~~As of September 30, 2022, there was $254,152 of unrecognized stock-based compensation expense related to RSUs which will be recognized over a weighted average period of 0.8 years.~~

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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 Nine Months Ended		For the Three Months Ended		For the Six Months Ended
	September 30,		September 30,		June 30,		June 30,
	2022	2021	2022	2021	2023	2022	2023		2022
Expected term (years)	5.41 - 5.85	5.85	0.58 - 10.00	5.85 - 10.00	5.50 - 10.00	5.09 - 5.50		5.50 - 10.00		0.58 - 10.00
Risk free interest rate	2.66% - 3.02%	0.81%	0.76% - 3.35%	0.45% - 1.58%	3.44% - 4.02%	2.79%		3.44% - 4.18%		0.76% - 2.79%
Expected volatility	85% - 87%	92%	82% - 90%	92% - 94%	82% - 94%	88%		82% - 95%		82% - 90%
Expected dividends	0.00%	0.00%	0.00%	0.00%	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 ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$1.22~~$2.04 and ~~$3.56~~$1.37 per share, respectively. The weighted average estimated grant date fair value of the stock options granted for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$1.61~~$1.78 and ~~$4.16~~$2.02 per share, respectively.

~~A summary of the option activity during the nine months ended September 30, 2022 is presented below:~~

Weighted




Weighted

Average

Average

Remaining

Aggregate

Number of

Exercise

Life

Intrinsic

Options

Price

In Years

Value
Outstanding, January 1, 2022

4,377,398

3.89




Granted

1,167,310

2.23




Forfeited

(60,021)

4.21




Outstanding, September 30, 2022

5,484,687

$
3.53

7.4

$
375,417

Exercisable, September 30, 2022

3,518,147

$
3.72

6.5

$
188,738

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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 ~~September~~June 30, ~~2022:~~2023:


Options Outstanding	Options Outstanding		Options Exercisable		Options Outstanding		Options Exercisable
			Weighted				Weighted
		Outstanding	Average	Exercisable		Outstanding	Average	Exercisable
Exercise	Exercise	Number of	Remaining Life	Number of	Exercise	Number of	Remaining Life	Number of
Price	Price	Options	In Years	Options	Price	Options	In Years	Options
	$1.00 - $1.99	1,577,286	4.1	827,636	$1.00 - $1.99	1,407,183	4.7	884,183
	$2.00 - $2.99	1,010,018	7.7	762,034	$2.00 - $2.99	1,473,663	6.9	844,473
	$3.00 - $3.99	1,241,069	7.0	820,883	$3.00 - $3.99	908,528	6.8	694,510
	$4.00 - $4.99	385,305	8.8	147,760	$4.00 - $4.99	350,500	8.1	216,178
	$5.00 - $5.99	100,805	6.2	79,805	$5.00 - $5.99	50,805	4.3	50,638
	$6.00 - $6.99	1,005,286	7.1	715,111	$6.00 - $6.99	843,759	6.5	741,748
	$7.00+	164,918	5.5	164,918	$7.00+	150,640	4.8	150,640
		5,484,687	6.5	3,518,147		5,185,078	6.2	3,582,370

As of ~~September~~June 30, ~~2022,~~2023, there was ~~$4,058,569~~$2,868,023 of unrecognized stock-based compensation expense related to stock options, which will be recognized over a weighted average period of ~~1.6~~1.7 years.

~~Warrants~~

~~A summary of the warrant activity for the nine months ended September 30, 2022 is presented below:~~

Weighted

Weighted

Average

Average

Remaining

Aggregate

Number of

Exercise

Life

Intrinsic


Warrants

Price

In Years

Value
Outstanding January 1, 2022

1,217,715

$
2.69




Granted

6,740,260

2.56




Exercised

(1,870,130)

0.01

Outstanding September 30, 2022

6,087,845

$
3.37

4.5

$
—

Exercisable September 30, 2022

6,087,845

$
3.37

4.5

$
—

~~The following table presents information related to warrants as of September 30, 2022:~~

Warrants Outstanding

Warants Exercisable

Weighted

Outstanding

Average

Exercisable
Exercise

Number of

Remaining Life

Number of
Price

Warrants

In Years

Warrants
$2.4696

909,451

2.5

909,451
$2.7240

216,380

2.5

216,380
$4.7600

91,884

8.6

91,884
$3.5400

4,870,130

4.9

4,870,130

6,087,845

4.5

6,087,845

~~Stock Warrant Exercises~~

During the nine months ended September 30, 2022, the Company issued an aggregate of 1,870,130 shares of common stock pursuant to the exercise of pre-funded warrants for aggregate proceeds of $18,701 at an exercise price of $0.01 per share.

~~Table of Contents~~

~~EYENOVIA, INC.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

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, ~~and 2021,~~ the Company’s Board ~~has~~of Directors approved a matching contribution equal to 100% of elective deferrals up to 4% of eligible earnings with the matching contribution subject to certain vesting requirements as outlined in the Plan documents. During the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded expense of ~~$39,914~~$46,196 and ~~$34,076~~$47,883 associated with its matching contributions, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded expense of ~~$173,896~~$125,164 and ~~$144,917~~$133,982 associated with its matching contributions, respectively.

~~Note 10 – Subsequent Events~~

~~At-the-Market Offering Program~~

Subsequent to September 30, 2022, the Company received approximately $1.4 million in gross proceeds ($1.3 million in net proceeds) from the sale of 587,298 shares of our common stock pursuant to our At-the-Market Offering program with SVB Leerink.

~~SVB Loan Repayment~~

On November 4, 2022, the Company repaid the SVB Loan in full. The full amount of the payment was $8.0 million, and included the principal amount of the loan ($7,500,000), the final payment ($375,000) and a 2% prepayment fee ($150,000). The entire restricted cash account in the amount of $7,875,000 was used to make the substantial amount of the payment.

1713

Table of Contents

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

The following discussion and analysis of the results of operations and financial condition of Eyenovia, Inc. (“Eyenovia,” the “Company,” “we,” “us” and “our”) as of ~~September~~June 30, ~~2022~~2023 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 as filed with the Securities and Exchange Commission (“SEC”) on March ~~30, 2022.~~31, 2023, as amended by Amendment No. 1, as filed with the SEC on May 1, 2023.

Forward Looking Statements

This ~~report~~Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.~~” Specifically, all~~ The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include our estimates regarding expenses, future revenue, capital requirements and our need for additional financing and other ~~than~~financial items; any statements of ~~historical facts included in this report, including regarding our financial position, business strategy and~~the plans, strategies and objectives of management for future ~~operations, are forward-looking statements. These forward-looking~~operations; any statements about the advantages of our product candidates and platform technology; estimates regarding the potential market opportunity for our product candidates and platform technology; statements regarding our clinical trials; factors that may affect our operating results; statements about our ability to establish and maintain intellectual property rights; statements about our ability to retain key personnel and hire necessary employees and appropriately staff our operations; statements related to future capital expenditures; statements related to future economic conditions or performance; and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Forward-looking statements are ~~based on~~often identified by the ~~beliefs~~use of ~~management at the time these statements were made,~~words such as, ~~well as assumptions made by and information currently available~~but not limited to, ~~management. When used in this report, the words~~ “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “will,” ~~“continue” “intend,~~“plan,” “project,” “seek,” “should,” “target,” “would,” and ~~“plan” and words~~similar expressions or ~~phrases of similar import are~~variations intended to identify forward-looking statements. These statements ~~reflect~~are based on the beliefs and assumptions of our ~~current view with respect~~management based on information currently available to ~~future events and~~management. Such forward-looking statements are subject to risks, uncertainties and ~~assumptions related to various~~other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the ~~section~~sections titled “Summary Risk Factors” and “Risk Factors” included in Item 1A of Part I of our ~~most recent~~ Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the ~~SEC.~~Securities and Exchange Commission (the “SEC”) on March 31, 2023, and as amended by Amendment No. 1, as filed with the SEC on May 1, 2023, and the risks discussed in our other SEC filings. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

FDA Approval of Mydcombi™

We received notification from the FDA on May 5, 2023 that our NDA for the Mydcombi™ product was approved. It is the only FDA-approved fixed combination of the two leading mydriatic agents in the United States. As an ophthalmic spray, Mydcombi may present a number of benefits for the optometric and ophthalmic offices as well as patients. Those benefits may include better tolerability, more efficient use of office time and resources, and an overall improved doctor-patient experience. We have begun the commercialization of Mydcombi, with the first commercial sale of the product on August 3, 2023 as part of a targeted launch, and are continuing to expand the manufacturing process in preparation for a broader launch in 2024, when internal manufacturing capabilities are expected to come on-line.

Overview

We are ~~a pre-commercial~~an ophthalmic technology company developing the Optejet® delivery system for use both in combination with ~~its~~our own drug-device therapeutic programs as well as out-licensing for additional indications. WeOur aim is to ~~achieve precision in~~improve the delivery of topical ophthalmic medication through ergonomic design that facilitates ease-of-use, delivery of more physiologically appropriate medication volume, with the goal to reduce side effects and improve tolerability, and introduce digital health technology to improve therapy compliance and ultimately medical outcomes.

Table of Contents

The ergonomic and functional design of the Optejet® allows for horizontal drug delivery and eliminates the need to tilt the head back or the manual dexterity to squeeze a bottle, to administer medications. Drug is delivered in a microscopic array of ~~novel and existing ophthalmic pharmaceutical agents.~~droplets faster than the blink reflex to help ensure instillation success. The precise delivery of a low-volume columnar spray by the Optejet® device ~~also~~ minimizes contamination with a non-protruding nozzle and self-closing shutter. The Company believes that this technology could ultimately replace eye droppers by advancing drug delivery beyond the limitations of patient coordination, drug overexposure, gravity, contamination potential, and discomfort towards a more precise, comfortable, and successful drug administration for improved patient care. The ergonomic and functional design of the Optejet® delivers microdroplets horizontally faster than the blink reflex to minimize instillation discomfort and overflow spillage, providing a more comfortable experience. In ~~the clinic,~~clinical trials, the Optejet® has demonstrated that its targeted delivery achieves a ~~significantly~~ high rate of successful administration, with 98% of ~~98%~~sprays being accurately delivered upon first attempt compared to the established rate reported with traditional eye drops of ~ 50%. ~~The diagnostics and therapeutics~~

A more physiologically appropriate volume of medication in the ~~Company’s pipeline have been tested~~range of seven to nine microliters is delivered by the Optejet, which is approximately one fifth of the 35 to 50 microliter dose typically delivered in ~~randomized controlled trials and demonstrated significant results in improving the benefit to risk profile for drug delivery. For example, the Company’s deliberately designed technology provides~~ a 75% reduction in ocular drug and preservative exposure to significantly improve the therapeutic index in drugs used for presbyopia, mydriasis and intraocular pressure (“IOP”) lowering through eight clinical trials. Eyedrops exposesingle eye drop. Lower volume of medication exposes the ocular surface to ~~approximately 300% more medication~~less active ingredient and preservatives, potentially reducing ocular stress and surface damage and improving tolerability. The lower volume also minimizes the potential for drug to enter systemic circulation, with the goal of avoiding some common side effects that ~~can lead~~are related to ~~unintended effects and induce collateral tissue damage. Drug delivery via~~overdosing of the eye.

We are developing versions of the Optejet with on-board digital technology to provide reminders via Bluetooth to smart devices and date and time stamp device ~~reduces ocular exposure~~use. This information can then be used by practitioners and health care systems to ~~preservatives comparable~~measure treatment compliance and improve medical decision making. In this way, the Optejet could serve as an extension of the physician’s office by providing information that is not currently possible to ~~that~~collect except through the use of non-preserved formulations demonstrating potentially less surface damage from ocular stress. To address unmet medical needs, the Company is developing the next generation of smart ophthalmic therapeutics to target new indications or new combinations where there are currently no or few drug therapies approved by the U.S. Food and Drug Administration (“FDA”). The Company’s investigational products are classified by the FDA as drug-device combination products with drug primary mode of action, meaning that the Center for Drug Evaluation and Research (“CDER”) is designated as the lead center with primary jurisdictional oversight. Accordingly, the product candidates are submitted to the FDA CDER for premarket review and approval under new drug applications (“NDAs”).diaries.

Our ~~pipeline is currently focused on the late-stage development of novel, potential first-in-class~~drug-device product line includes Mydcombi™ (tropicamide and phenylephrine HCL ophthalmic spray) and therapeutic ~~indications for an estimated 25 million potential pediatric patients with progressive myopia in the United States~~programs MicroPine (atropine ophthalmic spray) and an estimated over 100 million potential patients with age-related near vision impairment, or presbyopia—indications where there is tremendous unmet need and, to our knowledge, there exists only one known FDA-approved therapy, developed by Allergan. We are also developing the first microdose fixed combinationMicroLine (pilocarpine ophthalmic ~~pharmaceutical for mydriasis to address the estimated over 100 million annual comprehensive eye exams involving pupil dilation.~~

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spray). MicroPine is our first-in-class topical therapy for the treatment of progressive myopia, a back-of-the-eye ocular disease associated with pathologic axial elongation and sclero-retinal stretching. In the United States, myopia is estimated to affect approximately 25 million children, with up to five million considered to be at high risk for progressive myopia. In February 2019, the FDA accepted our ~~investigational new drug application (“IND”)~~IND to initiate ~~a Phase III registration trial of MicroPine (the “CHAPERONE study”)~~the CHAPERONE study to reduce the progression of myopia in children. ~~We enrolled the~~The first patient was enrolled in the CHAPERONE study in June 2019. Due to the COVID-19 pandemic, we experienced delays in trial enrollment as a result of supply chain issues with our third party suppliers, which in turn diminished our inventory supply. As of December 2021, per our license agreement described below, Bausch + Lomb, Inc. (“Bausch + Lomb”) manages enrollment of the CHAPERONE study. We have successfully expanded our manufacturing capabilities with our partnership with Coastline International, Inc. and the construction of our Redwood City, CA fill finish facility, and we have been able to reliably supply this study with clinical product as of the third quarter of 2022.

On October 9, 2020, we entered into ~~a license agreement (the “Bausch~~the Bausch License ~~Agreement”)~~Agreement with ~~Bausch + Lomb,~~B+L, pursuant to which ~~Bausch + Lomb~~B+L may develop and commercialize MicroPine in the United States and Canada. Under the terms of the Bausch License Agreement, we received an upfront payment of $10.0 million and we may receive up to a total of $35.0 million in additional payments, based on the achievement of certain regulatory and launch-based milestones. ~~Bausch + Lomb~~B+L also will pay us royalties to Eyenovia on a tiered basis (ranging from mid-single digit to mid-teen percentages) on gross profits from sales of MicroPine in the United States and Canada, subject to certain adjustments. Under the terms of the Bausch License Agreement, ~~Bausch + Lomb~~B+L assumed sponsorship of the IND as well as ~~oversight~~ownership and the costs related to the ongoing CHAPERONE study.

We have also successfully expanded our manufacturing capabilities through a partnership with Coastline International, Inc. located in Tijuana, Mexico, and the construction of our own fill and finish facility in Redwood City, California. As of the date of filing, we are up-to-date supplying clinical product for the CHAPERONE and VISION Studies.

MicroLine is our investigational pharmacologic treatment for presbyopia. Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye’s ability to focus on near objects and impairs near visual acuity. Allergan recently ~~received FDA approval for and~~ launched ~~Vuity~~^TMVuity™, ~~which is~~ a pilocarpine ~~solution~~drug product for the treatment of presbyopia. Our second Phase III study, VISION-2, used the same ~~molecule, but~~drug, delivered with the advantages of our ~~Optejet delivery system.~~Optejet® device. We released positive top-line results from VISION-2 in the fourth quarter of 2022.

Mydcombi™ ~~(or MicroStat)~~ is our fixed combination formulation of tropicamide-phenylephrine for inducing mydriasis ~~designed to be~~for diagnostic procedures and in conditions where short term pupil dilation is desired. Mydcombi is a novel approach for the ~~estimated~~ over ~~100~~106 million office-based comprehensive and diabetic eye exams performed every year in the United States. ~~We have completed~~As the only FDA-approved fixed combination of the two ~~Phase III trials~~leading mydriatic agents in the United States and as an ophthalmic spray, Mydcombi may present a number of benefits for ~~Mydcombi~~the optometric and ~~announced positive results from these studies, known~~ophthalmic offices as ~~MIST-1~~well as patients. Those benefits may include better tolerability, more efficient use of office time and ~~MIST-2,~~resources, and ~~have submitted~~ an ~~NDA~~overall improved doctor-patient experience. As noted above in “FDA Approval of Mydcombi”, we received FDA approval on May 5, 2023, and are preparing to ~~the FDA seeking approval to market~~commercialize the product starting with a targeted launch and expanding in ~~the U.S. In October 2021,~~2024 when we ~~received a complete response letter (“CRL”) in response~~expect our internal manufacturing capabilities to our NDA, which in part informed us that pre-filled or co-packaged ophthalmic drug dispenser products like Mydcombi have been reclassified as drug-device combination products. This reclassification was based upon the U.S. Courtcome on-line.

Table of Appeals for the D.C. Circuit’s decision in Genus Medical Technologies v. FDA, not involving Eyenovia, which ordered that products meeting the statutory definition of a device but were previously classified by the FDA as drugs must be regulated as devices. Before this ruling, the FDA regulated pre-filled or co-packaged ophthalmic dispensers as part of the approved ophthalmic drug distributed and sold with the dispenser. After the ruling, however, the dispenser must be considered as a distinct device constituent part of a drug-device combination product. We are in the process of providing additional non-clinical device information and expect to file our NDA resubmission in November 2022.Contents

On August 10, 2020, we entered into ~~a license agreement (the “Arctic~~the Arctic Vision License ~~Agreement”)~~Agreement with Arctic Vision, ~~(Hong Kong) Limited (“Arctic Vision”),~~ which was amended on September 14, 2021, pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea. Under the terms of the Arctic Vision License Agreement, as amended, we received an upfront payment of $4.25 million before any payments to Senju Pharmaceutical Co., Ltd. (“Senju”). In addition, we may receive up to a total of ~~$43.75~~$39.7 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, MicroLine and Mydcombi from usEyenovia or, for such products not supplied by ~~us,~~Eyenovia, pay us a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments. We will pay between 30 and 40 percent of such payments, royalties, or net proceeds of such supply to Senju pursuant to an exclusive license agreement with Senju dated March 8, 2015, as ~~amended. For a description~~amended (the “Senju License Agreement”).

We are in active discussions with manufacturers of ~~the Senju license agreement, see Note 2 — Summary of Significant Accounting Policies — Arctic Vision License Agreement~~existing and ~~Note 10 — Related Party Transactions — Senju License Agreement~~late-stage ophthalmic medications to ~~our audited financial statements included in the Annual Report on Form 10-K filed~~explore whether development with the ~~SEC on March 30, 2022.~~Optejet technology can solve unmet medical and business needs. Some of those business needs could include extension of exclusivity under the Optejet patents, improvement in a drug’s tolerability profile, or potential improvement in treatment compliance.

Historically, we have financed our operations principally through equity offerings. We have also generated cash through licensing arrangements and our credit ~~facility~~facilities with ~~Silicon Valley Bank (“SVB”).~~SVB and Avenue. However, based upon our current operating plan, there is substantial doubt about our ability to continue as a going concern for at least one year from the date that ~~the~~our financial statements

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~~included elsewhere in this Quarterly Report on Form 10-Q~~ are issued. Our ability to continue as a going concern depends on our ability to complete additional licensing or business development transactions or raise additional capital through ~~licensing transactions,~~ the sale of equity or debt securities to support our future operations. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives ~~and~~and/or take additional measures to reduce costs.

Our net losses were ~~$7.3~~$6.2 million and ~~$21.9~~$12.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023. As of ~~September~~June 30, ~~2022,~~2023, we had working capital and an accumulated deficit of ~~$18.4~~$19.2 million and ~~$112.1~~$130.2 million, respectively.

Financial Overview

~~Revenue and Cost of Revenue~~

In August and October 2020, we entered into the Arctic Vision License Agreement and Bausch License Agreement, respectively. Both of these agreements provide for the Company to earn revenue from an upfront licensing fee, the achievement of various development and regulatory milestones, and royalty income on sales of licensed products. Pursuant to the Senju license agreement, we will pay a percentage between 30 and 40 percent of such payments from the Arctic Vision License Agreement to Senju.

Research and Development Expenses

Research and development expenses are incurred in connection with the research and development of our microdose-therapeutics and consist primarily of ~~contract service~~personnel-related expenses. Given where we are in our life cycle, we do not separately track research and development expenses by project. Our research and development expenses consist of:

●

direct clinical and non-clinical expenses, which include expenses incurred under agreements with contract research organizations, contract manufacturing organizations, and costs associated with preclinical activities, development activities and regulatory activities;

●

personnel-related expenses, which include expenses related to consulting agreements with individuals that have since entered into employment agreements with us as well as salaries and other compensation of employees that is attributable to research and development activities; and

●

facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, marketing, insurance and other supplies used in research and development activities.

We expense research and development costs as incurred. We record costs for some development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, clinical site activations or other information our vendors provide to us.

~~In addition, our license agreements with Arctic Vision and Bausch + Lomb require them to assume or reimburse us for specified research and development costs.~~

We expect that our research and development expenses will increase with the continuation of the aforementioned initiatives.

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General and Administrative Expenses

General and administrative expenses consist primarily of payroll and related expenses, legal and other professional services, as well as non-cash stock-based compensation expense. We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and the potential commercialization of our product candidates.

~~No payments related to the Arctic Vision License Agreement or Senju license agreement were earned or recognized during the three and nine months ended September 30, 2022.~~

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Results of Operations

Three Months Ended ~~September~~June 30, ~~2022~~2023 Compared with Three Months Ended ~~September~~June 30, ~~2021~~2022

Research and Development Expenses


	For the Three Months Ended June 30,
	2023		2022
Personnel-related expenses	$	1,747,020	$	1,524,119
Direct clinical and non-clinical expenses		452,026		994,426
Non-cash stock-based compensation expenses		36,197		516,669
Facilities expenses		267,952		294,726
Supplies and materials		153,063		115,380
Other expenses		154,802		141,546
Total research and development expenses	$	2,811,060	$	3,586,866

Research and development expenses for the three months ended ~~September~~June 30, ~~2022~~2023 totaled ~~$3.9~~$2.8 million, ~~an increase~~a decrease of ~~$0.3~~$0.8 million, or 8%22%, as compared to $3.6 million recorded for the three months ended ~~September~~June 30, ~~2021. Research~~2022. The increase in personnel-related expenses was primarily due to salary increases and ~~development expenses consisted of~~new staff additions made throughout 2022, primarily related to the ~~following:~~

For the Three Months Ended September 30,

2022

2021
Direct clinical and non-clinical expenses

$
1,619,948

$
692,409
Personnel-related expenses

1,187,195

1,415,615
Non-cash stock-based compensation expenses

420,619

489,121
Other expenses

229,749

103,512
Facilities expenses

212,584

297,784
Supplies and materials

206,781

553,627
Total research and development expenses

$
3,876,876

$
3,552,068

anticipated Mydcombi launch. The ~~increase~~decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 ~~Phase III MicroLine study~~Study being concluded in 2022. ~~The decrease in personnel-related expenses and facilities expenses mainly resulted from an increase in such costs being allocated to clinical supplies.~~ The decrease in non-cash stock-based compensation expenses ~~resulted from stock grant forfeitures. The decrease in supplies and materials~~ was ~~mainly~~primarily due to the ~~delay~~change in the ~~commercialization~~allocation percentages of ~~Mydcombi.~~a grant from research and development expenses to general and administrative expenses and adjustments for forfeitures and expirations resulting from the review of outstanding options.

General and Administrative Expenses


	For the Three Months Ended June 30,
	2023		2022
Salaries and benefits	$	975,393	$	905,017
Professional fees		779,788		1,061,299
Stock-based compensation		457,435		520,257
Insurance expense		227,257		268,571
Sales and marketing		201,516		318,198
Facilities expense		126,251		115,923
Director fees and expense		106,250		95,000
Other		275,920		250,325
	$	3,149,810	$	3,534,590

General and administrative expenses for the three months ended ~~September~~June 30, ~~2022~~2023 totaled ~~$3.4~~$3.1 million, ~~an increase~~a decrease of ~~$1.0~~$0.4 million, or ~~42%~~11%, as compared to ~~$2.4~~$3.5 million recorded for the three months ended ~~September~~June 30, ~~2021. General and administrative expenses consisted of the following:~~

For the Three Months Ended September 30,

2022

2021
Professional fees

$
793,842

$
377,977
Salaries and benefits

900,506

744,683
Stock-based compensation

508,114

288,343
Sales and marketing

407,737

394,850
Insurance expense

269,840

245,390
Other

239,135

198,042
Facilities expense

120,636

46,714
Director fees and expense

113,542

77,000
Total general and administrative expenses

$
3,353,352

$
2,372,999

2022. The ~~increase in salaries and benefits~~decrease was ~~mainly~~primarily attributable to ~~staff additions made in late 2021 and early 2022 related to the ramp up for the anticipated Mydcombi launch. The increase~~a sharp decrease in professional ~~services was primarily due to increased~~fees which resulted from legal and ~~professional~~ recruiting expenses ~~related to~~associated with the addition of new directors in ~~2022.~~2022 that were not incurred in the first half of 2023. The ~~increase~~decrease in ~~stock-based compensation expense was due to new grants awarded~~sales and marketing expenses primarily resulted from the decrease in ~~late 2021 and early 2022. The increase in facilities expense was primarily due to the new lease entered into in 2022.~~

~~Nine Months Ended September 30, 2022 Compared with Nine Months Ended September 30, 2021~~

~~Revenue and Cost of Revenue~~

In August 2020, we received a $4.0 million upfront payment under the Arctic Vision License Agreement, and made a related payment of $1.6 million to Senju. This upfront payment was recorded as $4.0 million of deferred license fees and $1.6 million of deferred cost of revenue. Trial data for two of the product candidates that are subject to the Arctic Vision License Agreement (MicroPine andpromotional expenses.

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~~MicroLine) was fully submitted to Arctic Vision during the nine months ended September~~Six Months Ended June 30, ~~2021. As a result, we recognized the $4.0 million of revenue and recognized $1.6 million of cost of revenue related to the Senju payment during the nine months ended September~~2023 Compared with Six Months Ended June 30, ~~2021. We had no revenues during the nine months ended September 30, 2022.~~

2022

Research and Development Expenses


	For the Six Months Ended June 30,
	2023		2022
Personnel-related expenses	$	3,361,872	$	2,972,710
Direct clinical and non-clinical expenses		278,225		1,706,952
Non-cash stock-based compensation expenses		411,327		1,017,850
Facilities expenses		494,999		508,333
Supplies and materials		511,994		859,635
Other expenses		274,594		233,970
Total research and development expenses	$	5,333,011	$	7,299,450

Research and development expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 totaled ~~$11.2~~$5.3 million, a decrease of ~~$0.4~~$2.0 million, or 3%27%, as compared to ~~$11.6~~$7.3 million recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2021. Research~~2022. The increase in personnel-related expenses was primarily due to salary increases and ~~development expenses consisted of~~costs related to staff additions made throughout 2022 mainly related to the ~~following:~~

For the Nine Months Ended September 30,

2022

2021
Personnel-related expenses

$
4,159,905

$
4,003,192
Direct clinical and non-clinical expenses

3,494,633

4,291,192
Non-cash stock-based compensation expenses

1,438,469

1,138,331
Supplies and materials

898,683

993,455
Facilities expenses

720,917

871,938
Other expenses

463,719

261,256
Total research and development expenses

$
11,176,326

$
11,559,364

ramp up for the Mydcombi launch. The decrease in direct clinical and non-clinical expenses was ~~mainly~~primarily due to ~~Mydcombi product testing expense that was primarily done~~the VISION-2 Study being concluded in ~~early 2021. Stock option grants for new hires resulted in the increase~~2022. The decrease in non-cash stock-based compensation ~~expenses.~~expenses was primarily due to the change in the allocation percentages of a grant from research and development expenses to general and administrative expenses and adjustments for forfeitures and expirations resulting from the review of outstanding options. The decrease in supplies and materials expenses resulted from the increase in ~~other expenses was mainly due~~the cost reimbursements for the clinical supplies that were supplied to ~~various outsourcing costs~~our clinical partners (Arctic Vision and ~~higher depreciation expense.~~B+L).

General and Administrative Expenses


	For the Six Months Ended June 30,
	2023		2022
Salaries and benefits	$	1,997,344	$	1,933,800
Professional fees		1,392,823		2,268,148
Stock-based compensation		901,369		928,063
Insurance expense		483,993		519,789
Sales and marketing		397,136		497,506
Facilities expense		247,669		221,954
Director fees and expense		203,750		180,833
Other		462,611		459,462
	$	6,086,695	$	7,009,555

General and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 totaled ~~$10.4~~$6.1 million, ~~an increase~~a decrease of ~~$3.5~~$0.9 million, or ~~51%~~13%, as compared to ~~$6.9~~$7.0 million recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2021. General and administrative expenses consisted of the following:~~

For the Nine Months Ended September 30,

2022

2021
Professional fees

$
3,061,990

$
1,311,626
Salaries and benefits

2,834,306

2,051,269
Stock-based compensation

1,436,177

933,401
Sales and marketing

905,243

1,002,201
Insurance expense

789,629

674,726
Other

698,597

560,582
Facilities expense

342,590

158,426
Director fees and expense

294,375

222,250
Total general and administrative expenses

$
10,362,907

$
6,914,481

2022. The ~~increase~~decrease was primarily attributable to a sharp decrease in professional fees ~~was primarily due to higher~~which resulted from legal and ~~professional~~ recruiting expenses ~~related to~~associated with the addition of new directors in ~~2022.~~2022 that were not incurred in the first half of 2023. The ~~increase~~decrease in ~~salaries~~sales and ~~benefits was mainly due to new staff additions made~~marketing expense primarily resulted from the decrease in late 2021 and early 2022 related to the ramp up for the anticipated Mydcombi launch. The increase in stock-based compensation was due to new grants awarded in late 2021 and early 2022. The increase in facilities expense was primarily due to the new lease entered into in 2022.promotional expenses.

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Liquidity and Capital Resources and Going Concern

We measure our liquidity in a number of ways, including the following:


	September 30,		December 31,		June 30,		December 31,
	2022		2021		2023		2022
Cash and cash equivalents	$	17,398,605	$	19,461,850	$	17,468,088	$	22,863,520
Restricted cash		7,875,000		7,875,000
Total	$	25,273,605	$	27,336,850

Working capital	$	18,401,368	$	18,690,859	$	19,212,583	$	23,130,178

Notes payable (gross)	$	7,500,000	$	7,500,000	$	15,842,950	$	10,425,000

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Since inception, we have experienced negative cash flows from operations. As of ~~September~~June 30, ~~2022,~~2023, our accumulated deficit since inception was ~~$112.1~~$130.2 million.

As of ~~September~~June 30, ~~2022,~~2023, we had ~~an unrestricted~~a cash and cash equivalents balance of ~~$17.4~~$17.5 million, working capital of ~~$18.4~~$19.2 million and stockholders’ equity of ~~$20.3~~$10.5 million. As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had $7.5 million of notes payable (gross) outstanding. Subsequent to September 30, 2022, we received approximately $1.3 million in net proceeds from the sale of 587,298 shares of our common stock pursuant to our At-the-Market Offering program with SVB Leerink. Subsequent to September 30, 2022, the Company used its $7.9 million of restricted cash and $0.1 million of unrestricted cash in order to repay the SVB Loan, including $7.5 million of principal, a final payment of $0.4$15.8 million and ~~a prepayment fee~~$10.4 million, respectively, of ~~$0.1 million.~~debt outstanding.

These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities to support our future operations. Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities including clinical studies, working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our 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 our product and service offerings. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce general and administrative and sales and marketing costs in order to conserve our cash.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, our sources and uses of cash were as follows:

Net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$19.7~~$11.7 million, which includes cash used to fund a net loss of ~~$21.9~~$12.0 million, reduced by ~~$3.4~~$2.1 million of non-cash expenses, plus ~~$1.2~~$1.8 million of cash used to fund changes in operating assets and liabilities. Net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$15.0~~$12.9 million, which includes cash used to fund a net loss of ~~$15.8~~$14.6 million, reduced by ~~$1.8~~$2.1 million of non-cash expenses, plus ~~$1.0~~$0.4 million of cash used to fund changes in operating assets and liabilities.

Cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, 2023 was $2.1 million, which was related to purchases of property and equipment. Cash used in investing activities for the six months ended June 30, 2022 was ~~$0.6~~$0.4 million, which was related to purchases of and vendor deposits for property and equipment. ~~Cash used in investing activities for the nine months ended September 30, 2021 was $1.2 million, which was related to purchases of property and equipment.~~

Net cash provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 totaled ~~$18.2~~$8.4 million, which was attributable to ~~$19.1~~$4.0 million of gross proceeds received from sales under our At-the-Market Offering Program and $5.0 million of gross proceeds from the additional tranche under the Loan and Security Agreement. This was slightly offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan, $0.1 million of the At-the-Market offering issuance costs relating to our At-the-Market Offering Program and $0.1 million of issuance costs related to the additional tranche under the Loan and Security Agreement. Net cash provided by financing activities for the six months ended June 30, 2022 totaled $15.3 million, which was attributable to $15.9 million of gross proceeds received from the March 2022 Offering (as defined in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023, as amended by Amendment No. 1, as filed with the SEC on May 1, 2023) and the At-the-Market ~~Offering.~~Offering Program. This was slightly offset by the repayment of ~~$0.7~~$0.4 million of notes payable in connection with the D&O Loan and the $0.1 million payment of issuance costs related to the March 2022 Offering issuance costs. Net cash provided by financing activities for the nine months ended September 30, 2021 totaled $9.2 million, which was primarily attributable to $7.5 million of proceeds from the SVB Loan and $2.3 million from the exercise of warrants and stock options. This was slightly offset by the repayment of notes payable and loan issuance costs of $0.6 million.Offering.

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Contractual Obligations and Commitments

During the next twelve months we have commitments to pay: (a) ~~$3.8~~$2.7 million to settle our ~~September~~June 30, ~~2022~~2023 accounts payable, accrued compensation, and accrued expenses and other current liabilities; (b) ~~$0.7~~$0.4 million relating to our non-cancelable operating lease commitments; and (c) ~~$1.5 million of potential executive severance pay; and (d) $7.5~~$1.0 million of potential payments due under our notes payable. In addition, we would be required to pay an aggregate of $1.5 million of executive severance pay under the provisions of the Executive Employment Agreements with three executive officers, in the event that their respective employment with us were to be terminated without cause or if there is an involuntary termination (as defined in the agreement).

After twelve months we have commitments to pay an additional ~~$1.2~~$1.6 million relating to our non-cancelable operating lease ~~commitments.~~commitments and notes payable in the amount of $14.8 million.

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Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies, including critical accounting estimates, see Item 7 – Critical Accounting Policies in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023, as amended by Amendment No. 1, as filed with the SEC on May 1, 2023.

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires us to make estimates and ~~judgments~~judgements that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in estimates are reflected in reported results for the period in which they become known. Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022, as filed with the SEC on March 31, 2023, as amended by Amendment No. 1, as filed with the SEC on May 1, 2023.

Recently Adopted Accounting Standards

For a description of recently adopted accounting standards, including adoption dates and estimated effects, if any, on our condensed financial statements, see Note 2 – Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies such as Eyenovia are not required to provide the information required by this ~~item.~~Item.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on their evaluation, our principal executive officer and principal financial officer concluded that, as of ~~September~~June 30, ~~2022,~~2023, our disclosure controls and procedures were designed to, and were effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures as of ~~September~~June 30, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the quarter ended ~~September~~June 30, ~~2022,~~2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

Item 1A. Risk Factors.

There have been no material changes to the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, as filed with the SEC on March ~~30, 2022.~~

31, 2023, as amended by Amendment No. 1, as filed with the SEC on May 1, 2023.

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

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~None.~~Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2023, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits. (TO BE UPDATED – WILL CHECK WITH COVINGTON)


~~Exhibit~~		~~Incorporated by Reference from Filings as Noted Below (Unless~~ ~~Otherwise Indicated)~~
~~Number~~	~~Exhibit Description~~	~~Form~~	~~File No.~~	~~Exhibit~~	~~Filing Date~~
~~10.1~~	~~Non-Employee Director Compensation Policy, as amended~~	—	—	—	~~Filed herewith~~
~~31.1~~	~~Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~	—	—	—	~~Filed herewith~~
~~31.2~~	~~Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~	—	—	—	~~Filed herewith~~
32.1*	~~Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~	—	—	—	~~Filed herewith~~
32.2*	~~Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~	—	—	—	~~Filed herewith~~
~~101.INS~~	~~Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document~~	—	—	—	~~Filed herewith~~
~~101.SCH~~	~~Inline XBRL Taxonomy Extension Schema Document~~	—	—	—	~~Filed herewith~~
~~101.CAL~~	~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~	—	—	—	~~Filed herewith~~
~~101.DEF~~	~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~	—	—	—	~~Filed herewith~~
~~101.LAB~~	~~Inline XBRL Taxonomy Extension Label Linkbase Document~~	—	—	—	~~Filed herewith~~
~~101.PRE~~	~~Inline XBRL Taxonomy Extension Presentation Linkbase Document~~	—	—	—	~~Filed herewith~~
~~104~~	~~Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101~~	—	—	—	~~Filed herewith~~


Exhibit			Incorporated by Reference from Filings as Noted Below (Unless Otherwise Indicated)
Number	Exhibit Description		Form	File No.	Exhibit	Filing Date
3.1	Third Amended and Restated Certificate of Incorporation		8-K	001-38365	3.1	January 29, 2018
3.1.1	Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation		8-K	001-38365	3.1.1	June 14, 2018
3.2	Second Amended and Restated Bylaws	��	8-K	001-38365	3.1	February 7, 2022
10.1	Eyenovia Inc. Amended and Restated 2018 Omnibus Stock Incentive Plan, as Amended		8-K	001-38365	10.1	June 27, 2023

31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		—	—	—	Filed herewith
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		—	—	—	Filed herewith
32.1*	Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		—	—	—	Filed herewith
32.2*	Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		—	—	—	Filed herewith
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document		—	—	—	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document		—	—	—	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document		—	—	—	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document		—	—	—	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document		—	—	—	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document		—	—	—	Filed herewith
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101		—	—	—	Filed herewith

*This certification is deemed not filed for purpose of ~~section~~Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange ~~Act.~~Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

+ Management contract or other compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	EYENOVIA, INC.

Date: ~~November 14, 2022~~August 11, 2023	By:	/s/ John Gandolfo
		John Gandolfo
		Chief Financial Officer ~~(Principal~~ (Principal Financial Officer)

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Warrants Outstanding		Warants Exercisable
		Weighted
	Outstanding	Average	Exercisable
Exercise	Number of	Remaining Life	Number of
Price	Warrants	In Years	Warrants
$2.4696	909,451	2.5	909,451
$2.7240	216,380	2.5	216,380
$4.7600	91,884	8.6	91,884
$3.5400	4,870,130	4.9	4,870,130
	6,087,845	4.5	6,087,845