Eyenovia(EYEN) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements Q1 2024 unaudited condensed financial statements reveal significant financial deterioration and substantial doubt about going concern Condensed Balance Sheets As of March 31, 2024, assets decreased, liabilities increased, and stockholders' equity significantly declined to $1.8 million Condensed Balance Sheet Summary (Unaudited) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $7,976,106 | $14,849,057 | | Total Current Assets | $14,451,085 | $20,706,718 | | Total Assets | $26,177,163 | $28,779,374 | | Liabilities & Stockholders' Equity | | | | Total Current Liabilities | $16,459,923 | $9,530,382 | | Total Liabilities | $24,359,391 | $19,780,280 | | Total Stockholders' Equity | $1,817,772 | $8,999,094 | | Total Liabilities and Stockholders' Equity | $26,177,163 | $28,779,374 | Condensed Statements of Operations Q1 2024 net loss widened to $10.9 million due to increased operating expenses, including a $2.0 million license rights reacquisition charge Condensed Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $4,993 | $0 | | Total Operating Expenses | $10,266,824 | $5,458,836 | | Loss From Operations | $(10,266,824) | $(5,458,836) | | Net Loss | $(10,922,101) | $(5,739,366) | | Net Loss Per Share - Basic and Diluted | $(0.23) | $(0.15) | - Operating expenses included a $2.0 million expense for the reacquisition of license rights in Q1 2024, which was not present in the prior year period[12] Condensed Statements of Changes in Stockholders' Equity Stockholders' equity decreased from $9.0 million to $1.8 million due to net loss, partially offset by $3.2 million from a stock offering - The company raised approximately $3.2 million in net proceeds from the issuance of 1,833,323 shares of common stock in an "At the Market" offering during Q1 2024[15] Condensed Statements of Cash Flows Q1 2024 net cash used in operations increased to $9.9 million, resulting in a $6.9 million decrease in cash, ending at $8.0 million Cash Flow Summary (Unaudited) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | $(9,891,747) | $(6,958,708) | | Net Cash Used In Investing Activities | $(114,105) | $(838,052) | | Net Cash Provided By Financing Activities | $3,132,901 | $3,399,562 | | Net Decrease in Cash and Cash Equivalents | $(6,872,951) | $(4,397,198) | | Cash and Cash Equivalents - End of Period | $7,976,106 | $18,466,322 | Notes to Unaudited Condensed Financial Statements Notes raise substantial doubt about going concern due to recurring losses and negative cash flow, detailing reacquisition, milestone payments, and financing - The company's recurring net losses, negative cash flow from operations, and lack of recurring revenue raise substantial doubt about its ability to continue as a going concern for at least one year[29] - In March 2024, the company accrued $4.0 million for development milestones related to the licensed product from Formosa, triggered by FDA approval[42] - On January 12, 2024, the company reacquired rights to a licensed product from Bausch + Lomb, paying $2.0 million in cash upfront and agreeing to issue $3.0 million in common stock upon regulatory transfer[51][52] - Subsequent to the quarter end, the company raised approximately $2.0 million in a registered direct offering and issued 2,299,397 shares of common stock valued at $3.0 million to Bausch + Lomb[67][71] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strategic focus and Q1 2024 financial results, highlighting increased net loss and expenses, reiterating going concern doubts and financing needs Overview Eyenovia focuses on commercializing FDA-approved products and advancing MicroPine, reacquired in January 2024 to regain CHAPERONE study control and plan interim analysis - The company's primary focus is on the late-stage development of MicroPine for pediatric progressive myopia and the commercialization of its two FDA-approved products: Mydcombi and clobetasol propionate ophthalmic suspension[76] - In January 2024, Eyenovia reacquired the rights to MicroPine from Bausch + Lomb to regain control of the CHAPERONE study, involving a $2.0 million upfront cash payment and a subsequent $3.0 million issuance of common stock[82] - The company plans to conduct an interim analysis of the CHAPERONE study data in late 2024, which it believes may substantially increase the asset's value[82] Results of Operations Q1 2024 net loss widened to $10.9 million due to increased R&D, G&A, and a $2.0 million license rights reacquisition expense Comparison of Operating Expenses (Q1 2024 vs Q1 2023) | Expense Category | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development | $4,431,601 | $2,521,950 | +75.7% | | General and Administrative | $3,835,223 | $2,936,886 | +30.6% | | Reacquisition of license rights | $2,000,000 | $0 | N/A | - The increase in R&D expenses was primarily due to higher personnel-related costs, supplies and materials, and direct clinical expenses[101] - The increase in G&A expenses was mainly due to new staff additions and an increase in professional fees for temporary staffing[103] Liquidity and Going Concern Financial position weakened with cash decreasing to $8.0 million and a $2.0 million working capital deficit, raising substantial doubt about going concern, dependent on additional capital - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern for at least one year from the issuance date of the financial statements[90][110] Liquidity Metrics | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $7,976,106 | $14,849,057 | | Working Capital (Deficit) | $(2,008,838) | $11,176,336 | - Net cash used in operating activities increased to $9.9 million in Q1 2024 from $7.0 million in Q1 2023, reflecting higher cash burn to fund operations[111] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Eyenovia is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[121] Controls and Procedures Management deemed disclosure controls effective as of March 31, 2024, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[124] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[125] PART II - OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[127] Risk Factors No material changes to the risk factors previously disclosed in the 2023 Form 10-K have occurred - No material changes to the risk factors set forth in the 2023 Form 10-K have occurred[128] Other Part II Items This section covers standard disclosures, including no unregistered equity sales, no defaults on senior securities, no mine safety disclosures, and no new Rule 10b5-1 plans - The company reported no unregistered sales of equity securities during the three months ended March 31, 2024[129] - No defaults upon senior securities or mine safety disclosures were applicable for the reporting period[131][132] - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[133]