Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37759 OUTLOOK THERAPEUTICS, INC. ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Delaware 38-3982704 (State or other jurisdiction of incorporation or organiz ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited interim consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited interim consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, detail the company's financial position and performance for the periods ended March 31, 2021 and 2020 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031,%202021%20and%20September%2030,%202020) This section provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time Consolidated Balance Sheets | Metric | March 31, 2021 ($) | September 30, 2020 ($) | | :-------------------------------- | :------------- | :----------------- | | **Assets** | | | | Cash | $37,168,854 | $12,535,986 | | Total current assets | $43,792,841 | $17,943,868 | | Total assets | $45,111,814 | $19,732,551 | | **Liabilities** | | | | Total current liabilities | $23,897,800 | $15,888,806 | | Total liabilities | $24,460,642 | $16,906,260 | | **Stockholders' Equity** | | | | Total stockholders' equity | $20,651,172 | $2,826,291 | - The company's cash balance significantly increased from **$12.5 million** at September 30, 2020, to **$37.2 million** at March 31, 2021[14](index=14&type=chunk) - Total assets more than doubled from **$19.7 million** to **$45.1 million**, while total liabilities also increased from **$16.9 million** to **$24.5 million**[14](index=14&type=chunk) - Stockholders' equity saw a substantial increase from **$2.8 million** to **$20.7 million**, indicating significant capital injections[14](index=14&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20March%2031,%202021%20and%202020) This section details the company's revenues, expenses, and net loss over specific interim periods Consolidated Statements of Operations | Metric | Three months ended March 31, 2021 ($) | Three months ended March 31, 2020 ($) | Six months ended March 31, 2021 ($) | Six months ended March 31, 2020 ($) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Research and development | $8,529,393 | $4,383,214 | $20,477,974 | $10,230,516 | | General and administrative | $4,095,891 | $1,957,175 | $6,338,245 | $4,293,899 | | Loss from operations | $(12,625,284) | $(6,763,717) | $(26,816,219) | $(14,947,743) | | Net loss | $(13,106,521) | $(5,700,067) | $(27,562,435) | $(22,303,015) | | Net loss attributable to common stockholders | $(13,106,521) | $(17,459,591) | $(27,562,435) | $(35,937,275) | | Net loss per share (basic and diluted) | $(0.09) | $(0.36) | $(0.20) | $(0.93) | | Weighted average shares outstanding | 150,730,191 | 47,895,771 | 136,080,637 | 38,849,364 | - Net loss for the three months ended March 31, 2021, increased to **$13.1 million** from **$5.7 million** in the prior year, primarily due to higher R&D and G&A expenses[16](index=16&type=chunk) - For the six months ended March 31, 2021, net loss increased to **$27.6 million** from **$22.3 million** in the prior year, driven by increased operating expenses[16](index=16&type=chunk) - Despite increased net loss, net loss per share decreased significantly due to a substantial increase in weighted average shares outstanding[16](index=16&type=chunk) [Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=6&type=section&id=Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)%20for%20the%20Three%20and%20Six%20Months%20Ended%20March%2031,%202021%20and%202020) This section tracks changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) | Metric | Balance at October 1, 2020 ($) | Balance at March 31, 2021 ($) | | :----------------------------------- | :------------------------- | :------------------------ | | Common Stock Shares | 127,183,109 | 173,605,807 | | Common Stock Amount | $1,271,831 | $1,736,058 | | Additional Paid-in Capital | $291,274,366 | $336,197,455 | | Accumulated Deficit | $(289,719,906) | $(317,282,341) | | Total Stockholders' Equity (Deficit) | $2,826,291 | $20,651,172 | - The company issued **46,422,698 new common shares** during the six months ended March 31, 2021, significantly increasing common stock outstanding[18](index=18&type=chunk)[19](index=19&type=chunk) - Additional paid-in capital increased by approximately **$44.9 million**, reflecting proceeds from common stock sales and warrant exercises[18](index=18&type=chunk)[19](index=19&type=chunk) - Accumulated deficit worsened by **$27.6 million**, reaching **$(317.3) million** as of March 31, 2021[18](index=18&type=chunk)[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20March%2031,%202021%20and%202020) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Summary of Cash Flows | Cash Flow Activity | Six months ended March 31, 2021 ($) | Six months ended March 31, 2020 ($) | | :----------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(25,070,807) | $(13,756,734) | | Net cash provided by financing activities | $49,703,675 | $10,394,129 | | Net increase (decrease) in cash | $24,632,868 | $(3,362,605) | | Cash at end of period | $37,168,854 | $4,652,923 | - Operating cash outflow increased to **$25.1 million** for the six months ended March 31, 2021, from **$13.8 million** in the prior year, primarily due to higher net loss[22](index=22&type=chunk) - Cash provided by financing activities significantly increased to **$49.7 million**, mainly from common stock offerings and an unsecured promissory note[22](index=22&type=chunk) - The company reported a net increase in cash of **$24.6 million**, ending the period with **$37.2 million** in cash, a substantial improvement from a net decrease in the prior year[22](index=22&type=chunk) [Notes to Unaudited Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the interim consolidated financial statements [1. Organization and Description of Business](index=9&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This note describes the company's primary business, its focus on ONS-5010, and the status of its clinical trials - Outlook Therapeutics, Inc. is a late clinical-stage biopharmaceutical company focused on developing **ONS-5010**, an ophthalmic formulation of bevacizumab for retinal indications[23](index=23&type=chunk) - The company's NORSE TWO clinical trial for ONS-5010 for wet AMD is active, and management believes COVID-19 has not significantly impacted financial results for the six months ended March 31, 2021[24](index=24&type=chunk)[25](index=25&type=chunk) [2. Liquidity](index=9&type=section&id=2.%20Liquidity) This note addresses the company's ability to meet its short-term obligations and its need for additional financing to continue operations - The company has incurred substantial losses and negative cash flows, with **$10.5 million** in principal and accrued interest due by January 1, 2022, and a **$0.9 million** PPP loan due May 2, 2022, raising substantial doubt about its ability to continue as a going concern[26](index=26&type=chunk) - Management expects existing cash of **$37.2 million** as of March 31, 2021, to fund operations through November 2021, but substantial additional financing is required for future operations and product development[27](index=27&type=chunk) - Future funding strategies include potential licensing/marketing arrangements, equity issuance, additional debt, collaborations, and future product sales[27](index=27&type=chunk) [3. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=3.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles used in preparing the financial statements and key estimates made by management - The unaudited interim consolidated financial statements are prepared in conformity with U.S. GAAP for interim financial information, including normal and recurring adjustments[30](index=30&type=chunk)[31](index=31&type=chunk) - Management's estimates and assumptions, including those affected by COVID-19, are periodically reviewed, and actual results may materially vary[32](index=32&type=chunk) Net Loss Per Share (Basic and Diluted) | Period | Net Loss Attributable to Common Stockholders ($) | Common Stock Outstanding (Weighted Average) | Basic and Diluted Net Loss Per Share ($) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------ | :----------------------------------- | | Three months ended March 31, 2021 | $(13,106,521) | 150,730,191 | $(0.09) | | Three months ended March 31, 2020 | $(17,459,591) | 47,895,771 | $(0.36) | | Six months ended March 31, 2021 | $(27,562,435) | 136,080,637 | $(0.20) | | Six months ended March 31, 2020 | $(35,937,275) | 38,849,364 | $(0.93) | - Potentially dilutive securities, including performance-based stock units, stock options, and common stock warrants, were excluded from diluted EPS calculation as they were antidilutive due to the company's net loss[36](index=36&type=chunk) [4. Fair Value Measurements](index=11&type=section&id=4.%20Fair%20Value%20Measurements) This note details the company's fair value measurements, particularly for warrant liabilities, and the valuation methodologies employed - The company adopted ASU 2018-13 on October 1, 2020, which modifies fair value measurement disclosure requirements, with no material impact on financial statements[37](index=37&type=chunk) - Warrant liability is classified as Level 3, measured at fair value using the Black-Scholes option pricing model, and revalued each reporting period[40](index=40&type=chunk)[41](index=41&type=chunk) Warrant Liability Fair Value | Date | Warrant Liability ($) | | :----------------- | :---------------- | | March 31, 2021 | $404,916 | | September 30, 2020 | $70,772 | Changes in Fair Value of Level 3 Warrant Liability (Six months ended March 31, 2021) | Metric | Amount ($) | | :---------------- | :------- | | Balance at Oct 1, 2020 | $70,772 | | Change in fair value | $334,144 | | Balance at Mar 31, 2021 | $404,916 | - Key assumptions for Black-Scholes model at March 31, 2021, included a risk-free interest rate of **0.60%**, expected volatility of **98.8%**, and common stock fair value of **$2.25 per share**[41](index=41&type=chunk) [5. Property and Equipment, Net](index=12&type=section&id=5.%20Property%20and%20Equipment,%20Net) This note provides a breakdown of the company's property and equipment, net of accumulated depreciation Property and Equipment, Net | Asset Category | March 31, 2021 ($) | September 30, 2020 ($) | | :--------------------------------- | :------------- | :----------------- | | Laboratory equipment | $1,067,351 | $1,067,351 | | Less: accumulated depreciation and amortization | $(821,914) | $(740,102) | | **Total property and equipment, net** | **$245,437** | **$327,249** | - Net property and equipment decreased from **$327,249** to **$245,437**, primarily due to accumulated depreciation[43](index=43&type=chunk) - Depreciation expense for the six months ended March 31, 2021, was **$81,812**, down from **$127,551** in the prior year period[44](index=44&type=chunk) [6. Other Assets](index=13&type=section&id=6.%20Other%20Assets) This note details other assets, including the investment in a PRC joint venture and future capital contribution commitments Other Assets | Asset Category | March 31, 2021 ($) | September 30, 2020 ($) | | :---------------------- | :------------- | :----------------- | | Investment in PRC joint venture | $900,000 | $900,000 | | Other assets | $173,536 | $394,448 | | **Total other assets** | **$1,073,536** | **$1,294,448** | - The company maintains a **$900,000** investment in a PRC joint venture (Syntone Biopharma Ltd), formed in April 2021, for the development and commercialization of ONS-5010 in greater China[45](index=45&type=chunk) - An additional capital contribution of approximately **$2.1 million** to the PRC joint venture is expected within four years[46](index=46&type=chunk) [7. Accrued Expenses](index=13&type=section&id=7.%20Accrued%20Expenses) This note provides a detailed breakdown of the company's accrued expenses, including compensation, R&D, and professional fees Accrued Expenses | Expense Category | March 31, 2021 ($) | September 30, 2020 ($) | | :----------------------- | :------------- | :----------------- | | Compensation | $854,263 | $579,618 | | Research and development | $3,167,136 | $2,890,333 | | Professional fees | $326,335 | $132,085 | | Lease termination obligation | — | $3,971,111 | | **Total accrued expenses** | **$4,497,209** | **$7,757,310** | - Total accrued expenses decreased significantly from **$7.8 million** to **$4.5 million**, primarily due to the settlement of a **$3.97 million** lease termination obligation[47](index=47&type=chunk) - Accrued research and development expenses increased to **$3.17 million** from **$2.89 million**[47](index=47&type=chunk) [8. Debt](index=13&type=section&id=8.%20Debt) This note outlines the company's various debt instruments, including promissory notes, PPP loans, and equipment loans Debt Breakdown | Debt Type | March 31, 2021 ($) | September 30, 2020 ($) | | :------------------------------ | :------------- | :----------------- | | Unsecured promissory note | $10,535,601 | — | | Paycheck Protection Program term loan | $904,200 | $904,200 | | Equipment loans | $25,709 | $50,285 | | **Total debt, net of unamortized loan costs** | **$11,313,905** | **$954,485** | | Current portion | $(11,184,734) | $(50,285) | | **Long-term debt** | **$129,171** | **$904,200** | - The company secured a new unsecured promissory note of **$10.2 million** (net proceeds **$10.0 million**) in November 2020, maturing January 1, 2022, bearing **7.5% interest**[49](index=49&type=chunk) - The PPP term loan of **$904,200**, received in May 2020, matures May 2, 2022, with a **1% interest rate**[50](index=50&type=chunk) - Previous senior secured notes were extinguished in December 2019, resulting in an **$8.06 million loss**, and were fully converted into common stock by September 30, 2020[52](index=52&type=chunk)[54](index=54&type=chunk) [9. Commitments and Contingencies](index=16&type=section&id=9.%20Commitments%20and%20Contingencies) This note describes the company's legal settlements, lease agreements, and other contractual obligations - The company settled a breach of contract lawsuit with Laboratorios Liomont S.A. de C.V. for **$3.0 million** in damages, agreeing to an initial payment of **$625,000** and a contingent **$750,000** payment[61](index=61&type=chunk) - The Monmouth Junction corporate office lease was assigned in March 2021, and a new three-year lease in Iselin, New Jersey, commenced in April 2021 with future minimum payments of **$135,535**[62](index=62&type=chunk) - The Cranbury, New Jersey office and laboratory lease termination obligation was fully settled in November 2020 for a cash payment of **$3.25 million**, resulting in a gain of **$542,090**[69](index=69&type=chunk) [10. Common Stock, Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=18&type=section&id=10.%20Common%20Stock,%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This note details changes in the company's capital structure, including stock offerings, authorized shares, and outstanding warrants - In February 2021, the company completed a public offering and concurrent private placements, issuing **42,607,394 shares of common stock** for **$36.0 million** in net proceeds and an additional **$4.0 million** from private placements[71](index=71&type=chunk)[72](index=72&type=chunk) - The number of authorized common stock shares was increased from **200 million** to **325 million** on March 24, 2021[74](index=74&type=chunk) - All **68,112 shares of Series A-1 convertible preferred stock** were converted into **29,358,621 common shares** in March 2020, resulting in a **$10.3 million** deemed dividend[81](index=81&type=chunk)[82](index=82&type=chunk) Outstanding Common Stock Warrants (as of March 31, 2021) | Expiration Date | Shares of Common Stock Issuable | Exercise Price Per Share ($) | | :---------------- | :------------------------------ | :----------------------- | | February 18, 2022 | 416,666 | $12.00 | | December 22, 2024 | 277,128 | $12.00 | | April 13, 2025 | 145,686 | $12.00 | | May 31, 2025 | 62,437 | $12.00 | | February 24, 2025 | 172,864 | $1.27 | | February 26, 2024 | 1,747,047 | $0.9535 | | June 22, 2025 | 191,268 | $1.5188 | | January 28, 2026 | 2,116,364 | $1.2500 | | **Total** | **5,129,460** | | [11. Stock-Based Compensation](index=20&type=section&id=11.%20Stock-Based%20Compensation) This note describes the company's equity incentive plans and the recognition of stock-based compensation expense - The company has two equity incentive plans: the 2011 Plan (**106,490 shares reserved**, no future awards) and the 2015 Plan (**27,838,019 shares authorized**, **15,657,586 available for grant** as of March 31, 2021)[90](index=90&type=chunk)[91](index=91&type=chunk) Stock-Based Compensation Expense | Expense Category | Three months ended March 31, 2021 ($) | Three months ended March 31, 2020 ($) | Six months ended March 31, 2021 ($) | Six months ended March 31, 2020 ($) | | :------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Research and development | $228,240 | $41,148 | $468,211 | $148,938 | | General and administrative | $901,507 | $263,391 | $1,816,177 | $515,078 | | **Total** | **$1,129,747** | **$304,539** | **$2,284,388** | **$664,016** | - As of March 31, 2021, there was **$5,851,014** of unrecognized compensation expense for stock options, expected to be recognized over **2.58 years**[95](index=95&type=chunk) - **7,244,739 restricted shares** were issued in March 2020 to former MTTR principals, with a grant date fair value of **$0.54 per share**, and **$2,307,477** of unrecognized compensation expense remaining[97](index=97&type=chunk)[99](index=99&type=chunk) [12. Related-Party Transactions](index=23&type=section&id=12.%20Related-Party%20Transactions) This note discloses transactions and agreements with related parties, including former MTTR principals - The strategic partnership agreement with MTTR was terminated in January 2020, leading to the issuance of **7,244,739 common shares** to its four principals (including two executive officers) and a **$110,000** settlement fee[102](index=102&type=chunk) - Consulting agreements were entered into directly with the former MTTR principals, with aggregate earnings of **$541,225** for the six months ended March 31, 2021[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity challenges, COVID-19 impact, product development, and future funding requirements [Overview](index=24&type=section&id=Overview) This section provides a high-level introduction to the company's business, its lead product candidate ONS-5010, and clinical trial progress - Outlook Therapeutics is a late clinical-stage biopharmaceutical company developing **ONS-5010 (LYTENAVA)**, an ophthalmic formulation of bevacizumab, for retinal indications[107](index=107&type=chunk)[108](index=108&type=chunk) - The company aims to be the first to launch an FDA-approved bevacizumab for wet AMD, DME, and BRVO in major markets, addressing the current off-label use of Avastin[107](index=107&type=chunk)[112](index=112&type=chunk) - All three clinical trials (NORSE ONE, NORSE TWO, NORSE THREE) required for the planned BLA submission for wet AMD in Q1 2022 are either completed or fully enrolled, with NORSE THREE showing a positive safety profile[109](index=109&type=chunk) [Going Concern](index=25&type=section&id=Going%20Concern) This section addresses the company's ability to continue operations given its historical losses and the need for substantial additional financing - The company has funded operations primarily through **$331.9 million** from equity/debt securities and **$29.0 million** from collaboration agreements[113](index=113&type=chunk) - Recent financing activities in February 2021 generated **$36.0 million net** from a public offering, **$3.0 million** from a private placement to Syntone Ventures, and **$1.0 million** from GMS Ventures, plus **$3.6 million** from warrant exercises[114](index=114&type=chunk)[115](index=115&type=chunk) - As of March 31, 2021, cash resources of **$37.2 million** are expected to fund operations through November 2021, but substantial additional financing is needed, raising substantial doubt about the company's ability to continue as a going concern[116](index=116&type=chunk)[118](index=118&type=chunk) [Impacts of the COVID-19 Pandemic](index=26&type=section&id=Impacts%20of%20the%20COVID-19%20Pandemic) This section discusses the minimal disruptions experienced by the company due to COVID-19 and the ongoing uncertainty of its future impact - The company has experienced only minor disruptions from COVID-19, including a brief delay in NORSE TWO patient enrollment in March 2020[119](index=119&type=chunk) - All clinical and chemistry, manufacturing and control (CMC) activities are currently active, and patient follow-up for NORSE TWO continues without significant disruption[119](index=119&type=chunk)[120](index=120&type=chunk) - The ultimate impact of COVID-19 remains highly uncertain and could heighten existing business risks[122](index=122&type=chunk) [Collaboration, License and Strategic Partnership Agreements](index=26&type=section&id=Collaboration,%20License%20and%20Strategic%20Partnership%20Agreements) This section details the company's agreements, including the PRC joint venture and commercial license agreements for its product candidates - In May 2020, the company formed a PRC joint venture (Syntone Biopharma Ltd) with Syntone Ventures' PRC-affiliate, owning **20%** and granting a royalty-free license for ONS-5010 in greater China[124](index=124&type=chunk) - An initial capital contribution of **$0.9 million** was made to the PRC joint venture, with an additional **$2.1 million** expected within four years[125](index=125&type=chunk) - The company has commercial license agreements with Selexis S.A. for its product candidates, including ONS-5010, requiring milestone payments and single-digit royalties on net sales[126](index=126&type=chunk)[127](index=127&type=chunk) [Components of our Results of Operations](index=27&type=section&id=Components%20of%20our%20Results%20of%20Operations) This section explains the key expense categories and other financial items that contribute to the company's operating results [Research and Development Expenses](index=27&type=section&id=Research%20and%20Development%20Expenses) This section describes the nature of R&D expenses and the factors influencing their variability and future trends - R&D expenses are expensed as incurred and include costs for CROs, CMOs, professional scientific services, employee-related expenses, intellectual property acquisition, regulatory activities, and laboratory supplies[128](index=128&type=chunk) - The successful development of product candidates is highly uncertain, with costs and timing varying significantly based on clinical trial duration, patient enrollment, regulatory approvals, and commercialization efforts[128](index=128&type=chunk)[129](index=129&type=chunk) - Later-stage clinical development generally incurs higher costs due to increased size, complexity, and duration of trials[131](index=131&type=chunk) [General and Administrative Expenses](index=28&type=section&id=General%20and%20Administrative%20Expenses) This section outlines the components of G&A expenses and their expected increase with commercialization efforts - G&A expenses primarily consist of salaries, benefits, stock-based compensation for executive, administrative, finance, and legal functions, along with facility costs, patent fees, and professional services[132](index=132&type=chunk) - G&A expenses are expected to increase with anticipated regulatory approval and preparation for commercial operations, particularly in sales and marketing[133](index=133&type=chunk) [Interest Expense](index=28&type=section&id=Interest%20Expense) This section explains the types of debt instruments contributing to the company's interest expense - Interest expense includes cash and non-cash interest related to various debt instruments, including senior secured notes, unsecured notes, promissory notes, equipment loans, and finance leases[134](index=134&type=chunk) [Loss on Extinguishment of Debt](index=28&type=section&id=Loss%20on%20Extinguishment%20of%20Debt) This section clarifies the circumstances under which losses from debt extinguishment are recognized - Loss on extinguishment of debt arises from modifications to senior secured notes deemed substantially different or from exchanges of such notes for common stock[135](index=135&type=chunk) [Change in Fair Value of Redemption Feature](index=28&type=section&id=Change%20in%20Fair%20Value%20of%20Redemption%20Feature) This section explains the accounting for changes in the fair value of embedded derivatives in senior secured notes - This reflects changes in the fair value of the embedded derivative in senior secured notes, which were convertible into a variable number of common stock shares at a substantial discount[136](index=136&type=chunk) [Change in Fair Value of Warrant Liability](index=28&type=section&id=Change%20in%20Fair%20Value%20of%20Warrant%20Liability) This section describes the re-measurement of warrant liabilities at fair value and the recognition of changes in operations - Warrants issued with convertible senior secured notes are classified as liabilities and re-measured at fair value each balance sheet date, with changes recognized in the statements of operations[137](index=137&type=chunk) [Income Taxes](index=28&type=section&id=Income%20Taxes) This section discusses the company's income tax position, including net operating loss carryforwards and potential limitations - The company has not recorded U.S. federal or state income tax benefits for net losses due to uncertainty of realizing a benefit[138](index=138&type=chunk) - As of September 30, 2020, the company had federal NOL carryforwards of **$236.5 million** (expiring 2030) and state NOLs of **$72.3 million** (expiring 2038)[138](index=138&type=chunk) - NOLs may be subject to limitations from ownership changes under Section 382 of the Internal Revenue Code[139](index=139&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the three and six months ended March 31, 2021 and 2020 [Comparison of Three Months Ended March 31, 2021 and 2020](index=29&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202021%20and%202020) This section compares the company's financial results for the three-month periods, highlighting changes in key expense categories and net loss Financial Performance (Three Months Ended March 31) | Metric | 2021 ($) | 2020 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :----------- | | Research and development | $8,529,393 | $4,383,214 | $4,146,179 | | General and administrative | $4,095,891 | $1,957,175 | $2,138,716 | | Loss from operations | $(12,625,284) | $(6,763,717) | $(5,861,567) | | Net loss | $(13,106,521) | $(5,700,067) | $(7,406,454) | - R&D expenses increased by **$4.1 million**, primarily due to a **$3.8 million** increase in ONS-5010 development costs for NORSE THREE clinical trial and manufacturing scale-up[143](index=143&type=chunk) - G&A expenses increased by **$2.1 million**, driven by a **$1.0 million** increase in compensation (including stock options), an **$0.8 million** rise in professional fees for licensing, and **$0.6 million** in litigation settlement costs[144](index=144&type=chunk) - Interest expense decreased by **$0.4 million** due to the termination of a finance lease and reduction of outstanding debt[148](index=148&type=chunk) [Comparison of Six Months Ended March 31, 2021 and 2020](index=31&type=section&id=Comparison%20of%20Six%20Months%20Ended%20March%2031,%202021%20and%202020) This section compares the company's financial results for the six-month periods, detailing changes in operating expenses and net loss Financial Performance (Six Months Ended March 31) | Metric | 2021 ($) | 2020 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :----------- | | Research and development | $20,477,974 | $10,230,516 | $10,247,458 | | General and administrative | $6,338,245 | $4,293,899 | $2,044,346 | | Loss from operations | $(26,816,219) | $(14,947,743) | $(11,868,476) | | Net loss | $(27,562,435) | $(22,303,015) | $(5,259,420) | - R&D expenses increased by **$10.2 million**, primarily driven by a **$9.9 million** increase in ONS-5010 development costs for NORSE THREE and manufacturing scale-up[150](index=150&type=chunk) - G&A expenses increased by **$2.0 million**, mainly due to a **$1.3 million** increase in stock-based compensation, a **$1.2 million** rise in professional fees for licensing, and **$0.6 million** in litigation settlement costs, partially offset by decreased rent and a lease termination gain[151](index=151&type=chunk)[152](index=152&type=chunk) - Interest expense decreased by **$0.9 million** due to the termination of a finance lease and reduction of outstanding debt[153](index=153&type=chunk) - A loss on extinguishment of debt of **$8.1 million** was recorded in the prior year (six months ended March 31, 2020) due to the exchange of old senior secured notes for new ones[154](index=154&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's ability to generate and manage cash, its funding requirements, and financing strategies - The company has funded operations through **$331.9 million** from equity/debt and **$29.0 million** from collaboration agreements, but has incurred recurring net losses and negative cash flows[157](index=157&type=chunk) - Recent financing activities include **$10.0 million** from an unsecured promissory note (November 2020), **$36.0 million net** from a public offering (February 2021), **$4.0 million** from concurrent private placements, and **$3.6 million** from warrant exercises[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - As of March 31, 2021, cash balance was **$37.2 million**, but substantial indebtedness (**$10.5 million** unsecured note, **$0.9 million** PPP loan) raises substantial doubt about going concern[161](index=161&type=chunk) - Management expects current cash to fund operations through November 2021 and is evaluating additional financing strategies, including licensing, equity, debt, and collaborations[162](index=162&type=chunk)[166](index=166&type=chunk) [Funding Requirements](index=34&type=section&id=Funding%20Requirements) This section outlines the company's anticipated capital needs for product development and commercialization, expecting continued net losses - The company plans to focus on advancing ONS-5010 through clinical trials for BLA filing and commercialization, anticipating continued net losses and negative cash flow[164](index=164&type=chunk) - Primary capital uses include compensation, manufacturing, R&D services, supplies, legal, regulatory, and administrative costs[165](index=165&type=chunk) - Substantial additional capital is needed to complete the ONS-5010 development program, with financing plans including strategic collaborations, equity, debt, and future product sales[166](index=166&type=chunk) [Cash Flows](index=34&type=section&id=Cash%20Flows) This section summarizes the cash inflows and outflows from operating and financing activities for the six-month periods Summary of Cash Flows (Six Months Ended March 31) | Cash Flow Activity | 2021 ($) | 2020 ($) | | :-------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $(25,070,807) | $(13,756,734) | | Net cash provided by financing activities | $49,703,675 | $10,394,129 | [Operating Activities](index=35&type=section&id=Operating%20Activities) This section details the net cash used in operating activities, primarily driven by net loss and changes in working capital - Net cash used in operating activities was **$25.1 million** for the six months ended March 31, 2021, primarily due to a **$27.6 million** net loss[168](index=168&type=chunk) - This outflow was partially offset by **$2.6 million** in non-cash items and a net cash outflow of **$0.1 million** from changes in operating assets and liabilities, including increased accounts payable and decreased accrued expenses[168](index=168&type=chunk) [Financing Activities](index=35&type=section&id=Financing%20Activities) This section describes the significant cash inflows from equity offerings and debt, and outflows for debt payments - Net cash provided by financing activities was **$49.7 million** for the six months ended March 31, 2021, mainly from **$39.8 million** in net proceeds from equity offerings and **$10.0 million** from an unsecured promissory note[170](index=170&type=chunk) - Additionally, **$3.6 million** was received from common stock warrant exercises, while **$3.7 million** was used for debt and finance lease obligations payments[170](index=170&type=chunk) [Description of Indebtedness](index=35&type=section&id=Description%20of%20Indebtedness) This section provides details on the company's unsecured promissory note, including terms, maturity, and covenants - In November 2020, the company issued an unsecured promissory note for **$10.22 million** (original principal), receiving **$10.0 million** in cash proceeds. It bears **7.5% interest**, matures January 1, 2022, and can be prepaid at **105%** of the outstanding balance[172](index=172&type=chunk) - The note includes covenants requiring public information availability, Nasdaq listing maintenance, and restrictions on 'Variable Security Issuances' without noteholder consent[173](index=173&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements as of the reporting date - As of March 31, 2021, the company did not have any off-balance sheet arrangements[174](index=174&type=chunk) [Contractual Obligations and Commitments](index=36&type=section&id=Contractual%20Obligations%20and%20Commitments) This section notes the non-applicability of detailed contractual obligations and commitments for the interim report - This section is marked as 'Not applicable' in the report[175](index=175&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section states that critical accounting policies and estimates remain consistent with the prior annual report - The critical accounting policies and significant judgments and estimates have not materially changed from those reported in the Form 10-K for the fiscal year ended September 30, 2020[176](index=176&type=chunk) [JOBS Act Accounting Election](index=36&type=section&id=JOBS%20Act%20Accounting%20Election) This section clarifies the company's election to opt out of the extended transition period for new accounting standards as an emerging growth company - The company, as an 'emerging growth company,' has irrevocably elected to 'opt out' of the extended transition period for complying with new or revised accounting standards[177](index=177&type=chunk) - Consequently, the company will comply with new or revised accounting standards when required for public companies that are not emerging growth companies[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No quantitative and qualitative disclosures about market risk are applicable to the company for the current reporting period - This section is marked as 'Not applicable' in the report[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control over financial reporting - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021[179](index=179&type=chunk) - There have been no material changes in internal control over financial reporting during the second fiscal quarter ended March 31, 2021, despite employees working remotely due to COVID-19[180](index=180&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant information [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section details the settlement of a breach of contract claim filed by Laboratorios Liomont S.A. de C.V. in March 2021 - Laboratorios Liomont S.A. de C.V. filed a complaint in July 2020 alleging breach of contract and claiming **$3.0 million** in damages[182](index=182&type=chunk) - The company entered into a confidential settlement agreement with Liomont on March 30, 2021, leading to the dismissal of the complaint on April 11, 2021[182](index=182&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No new material risk factors are reported for the current period, referring readers to the Annual Report on Form 10-K - This section is marked as 'Not applicable' in the report[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported for the current period - This section is marked as 'Not applicable' in the report[184](index=184&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported for the current period - This section is marked as 'Not applicable' in the report[185](index=185&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company for the current reporting period - This section is marked as 'Not applicable' in the report[186](index=186&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No other information is reported for the current period - This section is marked as 'None' in the report[187](index=187&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, agreements, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Certificate of Amendment, Second Amended and Restated Bylaws, Form of underwriter warrant, Securities Purchase Agreements, At The Market Offering Agreement, and Certifications of Principal Executive and Financial Officers[189](index=189&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains the official signatures attesting to the accuracy and completeness of the report - The report was signed on May 14, 2021, by Lawrence A. Kenyon, Chief Executive Officer and Chief Financial Officer[193](index=193&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38-3982704 (Sta ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38-3982704 4260 U.S. Route ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38-3982704 (State o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001‑37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38‑3982704 (State ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q For the transition period from to Commission File No. 001‑37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38‑3982704 (State or other jurisdiction of incorporation or organization) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38-3982704 (State or other jurisdiction of in ...

CORPORATE PRESENTATION September 2019 DISCLAIMER This presentation contains forward-looking statements about Outlook Therapeutics, Inc. ("Outlook Therapeutics" or the "Company") based on management's current expectations, which are subject to known and unknown uncertainties and risks. Words such as "anticipated," "initiate," "expect," "intend," "plan," "believe," "seek," "estimate," "may," "will," and variations of these words or similar expressions are intended to identify forward-looking statements. These ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37759 OUTLOOK THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 38-3982704 (State or other jurisdicti ...