Eyenovia(EYEN) - 2019 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements The statements present the company's financial position, operational results, and cash flows, highlighting a widening net loss and significant cash usage offset by a subsequent public offering Condensed Balance Sheets Total assets decreased significantly to $10.0 million from $20.0 million due to a reduction in cash, with stockholders' equity falling to $7.6 million Condensed Balance Sheet Highlights (in USD) | Balance Sheet Item | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $9,239,609 | $19,728,200 | | Total Current Assets | $9,809,170 | $19,860,956 | | Total Assets | $10,035,978 | $20,015,494 | | Liabilities & Equity | | | | Total Current Liabilities | $2,373,232 | $3,098,841 | | Total Liabilities | $2,418,049 | $3,140,425 | | Total Stockholders' Equity | $7,617,929 | $16,875,069 | Condensed Statements of Operations The company reported no revenue and a widening net loss to $11.3 million for the six-month period, driven by increased R&D and G&A expenses Statement of Operations Summary (in USD, except per share data) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $3,568,022 | $2,412,164 | $7,576,918 | $4,506,259 | | General and administrative | $1,809,106 | $908,806 | $3,751,869 | $2,246,455 | | Loss From Operations | ($5,377,128) | ($3,320,970) | ($11,328,787) | ($6,752,714) | | Net Loss | ($5,333,512) | ($3,319,063) | ($11,265,896) | ($6,748,670) | | Net Loss Per Share | ($0.44) | ($0.33) | ($0.94) | ($0.77) | Condensed Statements of Cash Flows Net cash used in operations for the six-month period nearly doubled to $11.0 million, resulting in a net cash decrease of $10.5 million Cash Flow Summary for the Six Months Ended June 30 (in USD) | Cash Flow Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($11,040,368) | ($5,431,303) | | Net Cash Provided By Financing Activities | $551,777 | $24,743,503 | | Net (Decrease) Increase in Cash | ($10,488,591) | $19,312,200 | | Cash and Cash Equivalents - End of Period | $9,239,609 | $24,561,711 | Notes to Unaudited Condensed Financial Statements Notes detail the company's clinical-stage status, reliance on external financing, and a subsequent public offering that raised approximately $13.0 million - Eyenovia is a clinical-stage ophthalmic biopharmaceutical company developing microdose therapeutics with its patented Optejet piezo-print delivery technology[26] - The company has not yet generated revenues and expects to continue to incur cash outflows from operations, believing current cash is sufficient for the next twelve months[29][30] - In July 2019, the company closed a public offering, receiving net proceeds of approximately $13.0 million after deducting underwriting discounts and other expenses[72] - The company has various related-party transactions, including consulting, lease, and R&D service agreements[52][54][55] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses increased operating expenses driving larger net losses and the company's reliance on equity financing to fund future operations Overview Eyenovia is a clinical-stage company developing microdose therapeutics, with plans for an NDA submission in 2020 and an ongoing Phase III trial - The company has completed Phase III trials for MicroStat and plans to submit a New Drug Application (NDA) to the FDA in 2020[77] - The company enrolled its first patient in the Phase III CHAPERONE study for MicroPine in June 2019, targeting the reduction of myopia progression in children[77] - As of the report date, the company has not completed the development of any product and has not generated any revenue from product sales[80] Results of Operations Operating expenses increased significantly year-over-year, driven by expanded clinical activities, increased headcount, and higher stock-based compensation R&D Expense Breakdown - Three Months Ended June 30 (in USD) | Expense Category | 2019 | 2018 | | :--- | :--- | :--- | | Direct clinical and non-clinical | $2,219,648 | $1,123,115 | | Personnel-related | $783,708 | $629,776 | | Non-cash stock-based compensation | $206,834 | $11,369 | | Facilities and other | $357,832 | $647,904 | | Total R&D Expenses | $3,568,022 | $2,412,164 | R&D Expense Breakdown - Six Months Ended June 30 (in USD) | Expense Category | 2019 | 2018 | | :--- | :--- | :--- | | Direct clinical and non-clinical | $4,409,969 | $2,189,392 | | Personnel-related | $1,524,941 | $1,050,992 | | Non-cash stock-based compensation | $900,917 | $316,290 | | Facilities and other | $741,091 | $949,585 | | Total R&D Expenses | $7,576,918 | $4,506,259 | - The increase in G&A expenses for Q2 2019 was primarily due to higher payroll ($0.2M), non-cash stock-based compensation ($0.2M), advertising and marketing ($0.2M), public company costs ($0.2M), and insurance ($0.1M)[90] Liquidity and Capital Resources The company holds a cash balance of $9.2 million against an accumulated deficit of $47.8 million, with a recent public offering expected to fund operations for at least twelve months - As of June 30, 2019, the company had a cash balance of $9.2 million and an accumulated deficit of $47.8 million[94][95] - In July 2019, the company raised approximately $13 million in net proceeds from a public offering, which is expected to fund operations for at least the next twelve months[95] - Net cash used in operating activities for the six months ended June 30, 2019 was $11.0 million, compared to $5.4 million for the same period in 2018[96] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Eyenovia is not required to provide the information for this item - Smaller reporting companies such as us are not required to provide the information required by this item[102] Controls and Procedures Management concluded that as of June 30, 2019, the company's disclosure controls and procedures were effective at a reasonable assurance level - The principal executive officer and principal financial officer concluded that as of June 30, 2019, the company's disclosure controls and procedures were effective to provide reasonable assurance[105] - There were no material changes in internal control over financial reporting during the second quarter of 2019[106] PART II - OTHER INFORMATION Legal Proceedings The company reported no legal proceedings - None[110] Risk Factors As a smaller reporting company, Eyenovia is not required to provide the information for this item - Smaller reporting companies such as us are not required to provide the information required by this item[112] Unregistered Sales of Equity Securities and Use of Proceeds The company issued 584,967 shares from stock option exercises for $551,777 in proceeds and confirmed no material change in the use of IPO proceeds - During the six-month period ended June 30, 2019, the company issued an aggregate of 584,967 shares of common stock upon the exercise of stock options for aggregate consideration of $551,777[114] - There has been no material change in the expected use of the net proceeds from the initial public offering as described in the final prospectus dated January 24, 2018[117] Defaults Upon Senior Securities Not applicable - Not applicable[120] Mine Safety Disclosures Not applicable - Not applicable[122] Other Information The company reported no other information - None[124] Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and interactive data files - Exhibits filed include certifications of the Principal Executive Officer and Principal Financial and Accounting Officer, and interactive data files (XBRL)[126]