Eyenovia(EYEN) - 2020 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements Eyenovia's Q2 2020 unaudited condensed financial statements detail financial position, performance, and cash flows, noting going concern and key financing events Condensed Balance Sheets Eyenovia's balance sheet as of June 30, 2020, reflects decreased total assets and equity, primarily due to reduced cash, despite slightly increased liabilities Condensed Balance Sheets (in USD) | Account | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash | $10,186,171 | $14,152,601 | | Total Current Assets | $10,995,254 | $14,349,281 | | Total Assets | $11,427,727 | $14,697,619 | | Liabilities & Equity | | | | Total Current Liabilities | $2,755,430 | $2,911,661 | | Total Liabilities | $3,108,421 | $2,957,012 | | Total Stockholders' Equity | $8,319,306 | $11,740,607 | | Total Liabilities and Stockholders' Equity | $11,427,727 | $14,697,619 | Condensed Statements of Operations Eyenovia's net loss for Q2 2020 was $5.0 million, improving from $5.3 million in Q2 2019, with the six-month net loss of $10.5 million also improving due to lower R&D expenses Condensed Statements of Operations (Unaudited, in USD) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,915,250 | $3,568,022 | $6,549,537 | $7,576,918 | | General and administrative | $2,104,163 | $1,809,106 | $3,940,945 | $3,751,869 | | Total Operating Expenses | $5,019,413 | $5,377,128 | $10,490,482 | $11,328,787 | | Loss From Operations | ($5,019,413) | ($5,377,128) | ($10,490,482) | ($11,328,787) | | Net Loss | ($5,015,565) | ($5,333,512) | ($10,466,475) | ($11,265,896) | | Net Loss Per Share | ($0.25) | ($0.44) | ($0.56) | ($0.94) | Condensed Statements of Changes in Stockholders' Equity For the six months ended June 30, 2020, stockholders' equity decreased from $11.7 million to $8.3 million, driven by a $10.5 million net loss, partially offset by $5.5 million from a public offering - In the first six months of 2020, the company issued 2,675,293 shares of common stock and warrants in a public offering, generating net proceeds of approximately $5.45 million[19][17] - The accumulated deficit increased from $57.7 million at the start of 2020 to $68.1 million by June 30, 2020, due to the net loss incurred during the period[19] Condensed Statements of Cash Flows For the six months ended June 30, 2020, net cash used in operations was $9.9 million, offset by $6.1 million from financing, resulting in a $4.0 million net decrease in cash, ending at $10.2 million Condensed Statements of Cash Flows (Unaudited, in USD) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($9,916,379) | ($11,040,368) | | Net Cash Used In Investing Activities | ($132,243) | - | | Net Cash Provided By Financing Activities | $6,082,192 | $551,777 | | Net Decrease in Cash | ($3,966,430) | ($10,488,591) | | Cash - Beginning of Period | $14,152,601 | $19,728,200 | | Cash - End of Period | $10,186,171 | $9,239,609 | - Financing activities in the first half of 2020 included $5.6 million in proceeds from a private placement, $0.5 million from a PPP loan, and $0.4 million from warrant exercises[24][120] Notes to Unaudited Condensed Financial Statements Notes detail Eyenovia's clinical-stage business, disclose substantial doubt about its going concern ability, and outline key financing events including a private placement and a licensing agreement - The company is a clinical-stage ophthalmic biopharmaceutical company developing a pipeline of microdose array print (MAP™) therapeutics using its Optejet delivery system[26] - Management has identified substantial doubt about the Company's ability to continue as a going concern due to its history of net losses and cash outflows from operations. As of June 30, 2020, the company had cash of $10.2 million and an accumulated deficit of $68.1 million[29][30] - On March 24, 2020, the company closed a private placement of approximately $6.0 million, issuing units consisting of common stock and warrants, which generated net proceeds of about $5.45 million[68] - Subsequent to quarter-end, on August 10, 2020, Eyenovia entered into a license agreement with Arctic Vision to develop and commercialize MicroPine and MicroLine in Greater China and South Korea, receiving a $4.0 million upfront payment[87][88] - On May 8, 2020, the Company received a PPP Loan of $463,353 under the CARES Act[49] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Eyenovia's clinical-stage focus, analyzes decreased R&D and increased G&A expenses, acknowledges going concern doubt, and highlights post-quarter financing for future operations Overview Eyenovia is a clinical-stage company developing microdose MAP therapeutics via its Optejet system, prioritizing MicroLine, MicroPine, and MicroStat programs, with trial activities resuming - The company is developing a pipeline of microdose array print (MAP) therapeutics using its high-precision Optejet delivery system[92] - Key development programs include MicroLine (presbyopia), MicroPine (progressive myopia), and MicroStat (mydriasis). The company plans to file an NDA for MicroStat in 2020[93][95] - The Phase III CHAPERONE study for MicroPine, which experienced delays due to COVID-19, has resumed enrollment[94] - On August 10, 2020, the company entered into a license agreement with Arctic Vision to develop and commercialize MicroPine and MicroLine in Greater China and South Korea[94] Results of Operations For Q2 2020, R&D expenses decreased by 18% to $2.9 million due to reduced clinical activity, while G&A expenses rose 16% to $2.1 million, with similar six-month trends R&D Expense Comparison (Three Months Ended June 30) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Direct clinical and non-clinical expenses | $1,503,565 | $2,219,648 | | Personnel-related expenses | $727,519 | $783,708 | | Total R&D Expenses | $2,915,250 | $3,568,022 | - General and administrative expenses for Q2 2020 increased by $0.3 million (16%) to $2.1 million, primarily due to a $0.5 million increase in professional services for business development, offset by decreases in marketing and travel due to COVID-19[108] R&D Expense Comparison (Six Months Ended June 30) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Direct clinical and non-clinical expenses | $3,330,782 | $4,409,969 | | Personnel-related expenses | $1,642,668 | $1,524,941 | | Total R&D Expenses | $6,549,537 | $7,576,918 | Liquidity and Capital Resources As of June 30, 2020, Eyenovia had $10.2 million cash and a $68.1 million accumulated deficit, raising going concern doubt, addressed by post-quarter financing - As of June 30, 2020, the company had a cash balance of $10.2 million, working capital of $8.2 million, and an accumulated deficit of $68.1 million[114] - The company's financial condition raises substantial doubt about its ability to continue as a going concern for at least one year[116] - Subsequent to June 30, 2020, the company received a $4.0 million upfront payment from its license agreement with Arctic Vision and an additional $1.3 million from the exercise of warrants[115] - Net cash used in operating activities was $9.9 million for the six months ended June 30, 2020, compared to $11.0 million for the same period in 2019[117] - Net cash provided by financing activities was $6.1 million for the first six months of 2020, mainly from a private placement and a PPP loan[120] 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 Eyenovia are not required to provide the information required by this item[124] Controls and Procedures Management concluded Eyenovia's disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting during Q2 2020 - Based on an evaluation as of June 30, 2020, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective at a reasonable assurance level[127] - There were no changes in internal control over financial reporting during the second quarter of 2020 that materially affected, or are reasonably likely to materially affect, these controls[128] PART II - OTHER INFORMATION Legal Proceedings The company reported no legal proceedings - None[132] Risk Factors As a smaller reporting company, Eyenovia is not required to provide the information for this item - Smaller reporting companies such as Eyenovia are not required to provide the information required by this item[134] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or purchases by the issuer or affiliated purchasers - The company reported no recent sales of unregistered securities[136] Defaults Upon Senior Securities This item is not applicable - Not applicable[139] Mine Safety Disclosures This item is not applicable - Not applicable[141] Other Information The company reported no other information - None[143] Exhibits This section lists all exhibits filed with the Form 10-Q, including license agreements and officer certifications - Key exhibits filed include the License Agreement with Arctic Vision (Hong Kong) Limited, dated August 10, 2020, and related agreements with Senju Pharmaceutical Co., Ltd[147] - Certifications by the Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 were also filed[147]