UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 20202021
OR
| | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 001-36751
OCUGEN, INC.
(Exact Name of Registrant as Specified in its Charter)
___________________________________________________________ | | | | | |
| Delaware | 04-3522315 |
(State or other jurisdiction of
incorporation or organization)
| (I.R.S. Employer
Identification No.)
|
5263 Great Valley Parkway Suite 160
Malvern, Pennsylvania 19355
(Address of principal executive offices, including zip code)
(484) 328-4701
(Registrant’s telephone number, including area code)
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 $0.01 per share | | OCGN | | The Nasdaq Stock Market LLC (The 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 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, 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 new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 30, 2020,November 2, 2021, there were 162,026,473199,185,877 outstanding shares of the registrant’s common stock, $0.01 par value per share.
OCUGEN, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20202021
Unless the context otherwise requires, references to the “Company,” “we,” “our”“our,” or “us” in this report refer to Ocugen, Inc. and its subsidiaries, and references to “OpCo” refer to Ocugen OpCo, Inc., the Company’s wholly owned subsidiary.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q may containcontains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),that involve substantial risks and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about Ocugen and its subsidiaries. These forward-lookinguncertainties. All statements, are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are notother than statements of historical fact,facts contained in this Quarterly Report on Form 10-Q regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and can be identified by the useobjectives of management are forward-looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “projects”, “plans”, “goal”, “targets”, “potential”, “estimates”, “pro forma”, “seeks”, “intends” or “anticipates” or the negative thereof or comparable terminology. Forward-lookingstatements. These statements include discussions of strategy, financial projections, guidanceinvolve known and estimates (including their underlying assumptions), statements regarding plans, objectives, expectations or consequences of various transactions, and statements about the future performance, operations, products and services of Ocugen and its subsidiaries. We caution our stockholdersunknown risks, uncertainties, and other readers not to place undue reliance on such statements.
You should read this report and the documents filed by the Company with the SEC completely and with the understandingimportant factors that may cause our actual future results, mayperformance, or achievements to be materially different from what we currently expect. Our business and operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actualany future results, and experience may materially differ from those contained in anyperformance, or achievements expressed or implied by the forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," “will,” “would,” or the negative of such terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties, and other factors, that could cause actual resultsmany of which cannot be predicted with accuracy and experience to differ from those projectedsome of which might not even be anticipated.
The forward-looking statements in this Quarterly Report on Form 10-Q and contained in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on March 19, 2021 (the "2020 Annual Report") include, but are not limited to:among other things, statements about:
•our estimates regarding expenses, future revenue, capital requirements, and timing and availability of and the risk that Ocugen continues to incur significant losses from operations and continues to incur net losses;need for additional financing;
•our ability to obtain sufficient additional capital to continue to advance our product candidates and our preclinical programs;
•our activities with respect to BBV152, known as COVAXIN outside the risk that Ocugen may encounter unforeseen expenses, difficulties, complications, delaysUnited States, our vaccine candidate for the prevention of COVID-19 caused by SARS-CoV-2 in humans, in collaboration with Bharat Biotech International Limited (“Bharat Biotech”), including our plans and other knownexpectations regarding clinical development, manufacturing, pricing, regulatory review and unknown factors;compliance, reliance on third parties, and commercialization, if authorized or approved in the United States and Canada;
•our submission of a request to the U.S. Food and Drug Administration (the “FDA”) for Emergency Use Authorization for COVAXIN for pediatric use in children ages two to 18 years in the United States, which was based on the results of a Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India;
•our plans regarding the submission of a Biologics License Application ("BLA") to the FDA for COVAXIN for ages 18 years and older, including the need for a Phase 3 immuno-bridging study to support a BLA submission as well as a safety-bridging study if required by the FDA;
•our ability to successfully obtain adequate supply of COVAXIN from Bharat Biotech and to complete a technology transfer to Jubilant HollisterStier or another third-party manufacturer and engage such manufacturer on commercially acceptable terms;
•anticipated market demand for COVAXIN in the United States or Canada, including for both the pediatric and adult population;
•the extent to which health epidemics and other outbreaks of communicable diseases, including the recent outbreak of a novel strain of the coronavirus which causes a serious respiratory condition known as COVID-19 pandemic, could disrupt Ocugen'sour business and operations;
•the uncertainties associated with the clinical development and regulatory authorization or approval of our product candidates, including potential delays in the commencement, enrollment, and completion of clinical trials;
•risks related to the inability of the Company to obtain sufficient additional capital to continue to advance these product candidates and its preclinical programs;
•uncertainties in obtaining successful clinical results for product candidates and unexpected costs that may result therefrom;
•risks related to the failureour ability to realize any value from product candidates and preclinical programs being developed and anticipated to be developed in light of inherent risks and difficulties involved in successfully bringing product candidates to market and the risk that products will not achieve broad market acceptance;
•uncertainties in obtaining successful clinical results for product candidates and unexpected costs that may result therefrom;
•our ability to comply with regulatory schemes applicable to our business and other regulatory developments in the United States, Canada, and other foreign countries; including the extent to which developments with respect to the COVID-19 pandemic will affect the regulatory pathway available for vaccines in the United States, Canada, or other jurisdictions;
•the performance of third-parties upon which we depend, including third-party contract development and manufacturing organizations, and third-party suppliers, manufacturers, group purchasing organizations, distributors, and logistics providers;
•the pricing and reimbursement of our product candidates, if authorized or approved;
•our ability to obtain and maintain patent protection, or obtain licenses to intellectual property and defend our intellectual property rights against third-parties;
•our ability to maintain our relationships, profitability, and contracts with our key collaborators and commercial partners; including with Bharat Biotech, and our ability to establish additional collaborations and/or partnerships;
•our ability to recruit or retain key scientific, technical, commercial, and management personnel or to retain our executive officers;
•our ability to comply with stringent U.S., Canada, and other foreign government regulation in the manufacture of pharmaceutical products, including Good Manufacturing Practice compliance and other relevant regulatory authorities;
•the impact of the COVID-19 pandemic on our development programs, global supply chain, and collaborators and manufacturers, including Bharat Biotech; and
•the other risk factorsmatters discussed under the heading “Risk Factors” contained in the Annual Report on Form 10-K filed with the SEC on March 27, 2020 (the "2019 Annual Report"), in thethis Quarterly Report on Form 10-Q, filed with the SEC on May 8, 2020 Annual Report, and in any other documents Ocugen fileswe file with the SEC.
You should assume thatWe may not actually achieve the information appearingplans, intentions, or expectations disclosed in this report is accurate as of its date only. Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in anyour forward-looking statements, made by us or on our behalf,and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and in the 2020 Annual Report, particularly under the sections titled “Risk Factors,” that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, collaborations, or investments we may make.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not assume any obligation to update any forward-looking statements. Further, any forward-looking statement speaks only
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on which it is made. New factors emerge from timeForm 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to time,indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain and it isinvestors are cautioned not possible for us to predict which factors will arise.unduly rely upon these statements. We qualify all of our forward-looking statements by these cautionary statements. In addition, we cannot assess the impactwith respect to all of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All written or oral forward-looking statements, attributable to us or any person acting on our behalf made afterwe claim the dateprotection of this report are expressly qualified in their entirety by the risk factors and cautionarysafe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Solely for convenience, tradenames and trademarks referred to in this report. Unless legally required,Quarterly Report on Form 10-Q appear without the ® or TM symbols, but those references are not intended to indicate, in any way, that we dowill not undertake any obligationassert, to release publicly any revisionsthe fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to such forward-looking statements to reflect eventsthese tradenames or circumstances aftertrademarks, as applicable. All tradenames, trademarks, and service marks included or incorporated by reference in this Quarterly Report on Form 10-Q are the dateproperty of this report or to reflect the occurrence of unanticipated events.their respective owners.
OCUGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
| | | September 30,
2020 | | December 31,
2019 | | September 30, 2021 | | December 31, 2020 |
| Assets | Assets | | | | Assets | | | |
| Current assets | Current assets | | Current assets | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 19,105,830 | | | $ | 7,444,052 | | Cash and cash equivalents | $ | 107,349 | | | $ | 24,039 | |
| Advance for COVAXIN supply | | Advance for COVAXIN supply | 4,988 | | | — | |
| Prepaid expenses and other current assets | Prepaid expenses and other current assets | 652,893 | | | 1,322,167 | | Prepaid expenses and other current assets | 1,113 | | | 1,839 | |
| Asset held for sale | 0 | | | 7,000,000 | | |
| Total current assets | Total current assets | 19,758,723 | | | 15,766,219 | | Total current assets | 113,450 | | | 25,878 | |
| Property and equipment, net | Property and equipment, net | 214,100 | | | 222,464 | | Property and equipment, net | 1,052 | | | 633 | |
| Restricted cash | Restricted cash | 151,196 | | | 151,016 | | Restricted cash | 151 | | | 151 | |
| Other assets | Other assets | 415,555 | | | 667,747 | | Other assets | 1,659 | | | 714 | |
| Total assets | Total assets | $ | 20,539,574 | | | $ | 16,807,446 | | Total assets | $ | 116,312 | | | $ | 27,376 | |
| Liabilities and stockholders’ equity | Liabilities and stockholders’ equity | | | | Liabilities and stockholders’ equity | | | |
| Current liabilities | Current liabilities | | Current liabilities | |
| Accounts payable | Accounts payable | $ | 222,340 | | | $ | 1,895,613 | | Accounts payable | $ | 2,095 | | | $ | 395 | |
| Accrued expenses | 2,333,733 | | | 2,270,045 | | |
| Accrued expenses and other current liabilities | | Accrued expenses and other current liabilities | 3,962 | | | 2,941 | |
| Short-term debt, net | Short-term debt, net | 1,210,645 | | | 0 | | Short-term debt, net | — | | | 234 | |
| Operating lease obligation | Operating lease obligation | 164,808 | | | 172,310 | | Operating lease obligation | 172 | | | 44 | |
| Other current liabilities | 199,261 | | | 205,991 | | |
| Total current liabilities | Total current liabilities | 4,130,787 | | | 4,543,959 | | Total current liabilities | 6,229 | | | 3,614 | |
| Non-current liabilities | Non-current liabilities | | Non-current liabilities | |
| Operating lease obligation, less current portion | Operating lease obligation, less current portion | 42,746 | | | 163,198 | | Operating lease obligation, less current portion | 1,280 | | | 389 | |
| Long term debt, net | Long term debt, net | 1,944,396 | | | 1,072,123 | | Long term debt, net | 1,693 | | | 1,823 | |
| Other non-current liabilities | 0 | | | 9,755 | | |
| Total non-current liabilities | Total non-current liabilities | 1,987,142 | | | 1,245,076 | | Total non-current liabilities | 2,973 | | | 2,212 | |
| Total liabilities | Total liabilities | 6,117,929 | | | 5,789,035 | | Total liabilities | 9,202 | | | 5,826 | |
| Commitments and contingencies (Note 11) | | | | |
| Commitments and contingencies (Note 13) | | Commitments and contingencies (Note 13) | 0 | | 0 |
| Stockholders’ equity | Stockholders’ equity | | Stockholders’ equity | |
| Convertible preferred stock; $0.01 par value; 10,000,000 shares authorized; 7 issued and outstanding at September 30, 2020 and December 31, 2019 | 0 | | | 0 | | |
| Common stock; $0.01 par value; 200,000,000 authorized; 162,147,973 and 52,746,728 shares issued at September 30, 2020 and December 31, 2019, respectively; 162,026,473 and 52,625,228 shares outstanding at September 30, 2020 and December 31, 2019, respectively | 1,621,480 | | | 527,467 | | |
| Treasury Stock, at cost, 121,500 shares at September 30, 2020 and December 31, 2019 | (47,864) | | | (47,864) | | |
| Convertible preferred stock; $0.01 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020 | | Convertible preferred stock; $0.01 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020 | |
| Series A; 7 issued and outstanding at September 30, 2021 and December 31, 2020 | | Series A; 7 issued and outstanding at September 30, 2021 and December 31, 2020 | — | | | — | |
| Series B; 54,745 and zero issued and outstanding at September 30, 2021 and December 31, 2020, respectively | | Series B; 54,745 and zero issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 1 | | | — | |
| Common stock; $0.01 par value; 295,000,000 and 200,000,000 shares authorized, 199,049,329 and 184,133,384 shares issued, and 198,927,829 and 184,011,884 shares outstanding at September 30, 2021 and December 31, 2020, respectively | | Common stock; $0.01 par value; 295,000,000 and 200,000,000 shares authorized, 199,049,329 and 184,133,384 shares issued, and 198,927,829 and 184,011,884 shares outstanding at September 30, 2021 and December 31, 2020, respectively | 1,990 | | | 1,841 | |
| Treasury stock, at cost, 121,500 shares at September 30, 2021 and December 31, 2020 | | Treasury stock, at cost, 121,500 shares at September 30, 2021 and December 31, 2020 | (48) | | | (48) | |
| Additional paid-in capital | Additional paid-in capital | 82,359,494 | | | 62,018,632 | | Additional paid-in capital | 222,253 | | | 93,059 | |
| Accumulated deficit | Accumulated deficit | (69,511,465) | | | (51,479,824) | | Accumulated deficit | (117,086) | | | (73,302) | |
| Total stockholders’ equity | Total stockholders’ equity | 14,421,645 | | | 11,018,411 | | Total stockholders’ equity | 107,110 | | | 21,550 | |
| Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 20,539,574 | | | $ | 16,807,446 | | Total liabilities and stockholders’ equity | $ | 116,312 | | | $ | 27,376 | |
See accompanying notes to condensed consolidated financial statements.
OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(Unaudited)
| | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2021 | | 2020 | | 2021 | | 2020 |
| Revenues | Revenues | | | | | | | | Revenues | | | | | | | |
| Collaboration revenue | Collaboration revenue | $ | 0 | | | $ | 0 | | | $ | 42,620 | | | $ | 0 | | Collaboration revenue | $ | — | | | $ | — | | | $ | — | | | $ | 43 | |
| Total revenues | Total revenues | 0 | | | 0 | | | 42,620 | | | 0 | | Total revenues | — | | | — | | | — | | | 43 | |
| Operating expenses | Operating expenses | | Operating expenses | |
| Research and development | Research and development | 1,477,382 | | | 1,305,461 | | | 4,759,569 | | | 6,338,530 | | Research and development | 6,281 | | | 1,478 | | | 28,006 | | | 4,760 | |
| In-process research and development | In-process research and development | 7,000,000 | | | 0 | | | 7,000,000 | | | 0 | | In-process research and development | — | | | 7,000 | | | — | | | 7,000 | |
| General and administrative | General and administrative | 1,704,598 | | | 1,408,350 | | | 5,760,398 | | | 3,544,847 | | General and administrative | 4,508 | | | 1,704 | | | 15,450 | | | 5,760 | |
| Total operating expenses | Total operating expenses | 10,181,980 | | | 2,713,811 | | | 17,519,967 | | | 9,883,377 | | Total operating expenses | 10,789 | | | 10,182 | | | 43,456 | | | 17,520 | |
| Loss from operations | Loss from operations | (10,181,980) | | | (2,713,811) | | | (17,477,347) | | | (9,883,377) | | Loss from operations | (10,789) | | | (10,182) | | | (43,456) | | | (17,477) | |
| Other income (expense) | Other income (expense) | | Other income (expense) | | — | | |
| Change in fair value of derivative liabilities | 0 | | | (18,512,204) | | | 0 | | | (19,896,626) | | |
| Loss on debt conversion | 0 | | | 0 | | | 0 | | | (341,136) | | |
| Interest income | Interest income | 42 | | | 136 | | | 594 | | | 1,107 | | Interest income | 5 | | | — | | | 15 | | | — | |
| Interest expense | Interest expense | (291,909) | | | (796,141) | | | (554,801) | | | (1,753,172) | | Interest expense | (19) | | | (292) | | | (59) | | | (555) | |
| Other income (expense) | Other income (expense) | 0 | | | (751,261) | | | (87) | | | (751,493) | | Other income (expense) | (4) | | | — | | | (336) | | | — | |
| Total other income (expense) | Total other income (expense) | (291,867) | | | (20,059,470) | | | (554,294) | | | (22,741,320) | | Total other income (expense) | (18) | | | (292) | | | (380) | | | (555) | |
| Net loss | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (18,031,641) | | | $ | (32,624,697) | | |
| Loss before income taxes | | Loss before income taxes | (10,807) | | | (10,474) | | | (43,836) | | | (18,032) | |
| Income tax benefit | | Income tax benefit | (52) | | | — | | | (52) | | | — | |
| Net loss and comprehensive loss | | Net loss and comprehensive loss | $ | (10,755) | | | $ | (10,474) | | | $ | (43,784) | | | $ | (18,032) | |
| Deemed dividend related to Warrant Exchange | Deemed dividend related to Warrant Exchange | 0 | | | 0 | | | (12,546,340) | | | 0 | | Deemed dividend related to Warrant Exchange | — | | | — | | | — | | | (12,546) | |
| Net loss to common stockholders | Net loss to common stockholders | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (30,577,981) | | | $ | (32,624,697) | | Net loss to common stockholders | $ | (10,755) | | | $ | (10,474) | | | $ | (43,784) | | | $ | (30,578) | |
| | Shares used in calculating net loss per common share — basic and diluted | Shares used in calculating net loss per common share — basic and diluted | 141,591,218 | | | 6,411,308 | | | 92,764,157 | | | 5,839,840 | | Shares used in calculating net loss per common share — basic and diluted | 198,790,980 | | | 141,591,218 | | | 193,599,525 | | | 92,764,157 | |
| Net loss per share of common stock — basic and diluted | Net loss per share of common stock — basic and diluted | $ | (0.07) | | | $ | (3.55) | | | $ | (0.33) | | | $ | (5.59) | | Net loss per share of common stock — basic and diluted | $ | (0.05) | | | $ | (0.07) | | | $ | (0.23) | | | $ | (0.33) | |
| | Net loss | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (18,031,641) | | | $ | (32,624,697) | | |
| Other comprehensive income (loss) | | |
| Foreign currency translation adjustment | 0 | | | 0 | | | 0 | | | (451) | | |
| Comprehensive loss | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (18,031,641) | | | $ | (32,625,148) | | |
See accompanying notes to condensed consolidated financial statements.
OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Common Stock | | Treasury Stock | | Additional
Paid-in Capital | | Accumulated
Other
Comprehensive Income (Loss) | | Accumulated
Deficit | | Total |
| | | | | Shares | | Amount | |
| Balance at December 31, 2019 | | | | | 52,746,728 | | | $ | 527,467 | | | $ | (47,864) | | | $ | 62,018,632 | | | $ | 0 | | | $ | (51,479,824) | | | $ | 11,018,411 | |
| Stock-based compensation expense | | | | | — | | | — | | | — | | | 222,513 | | | — | | | — | | | 222,513 | |
| Net loss | | | | | — | | | — | | | — | | | — | | | — | | | (3,943,819) | | | (3,943,819) | |
| Balance at March 31, 2020 | | | | | 52,746,728 | | | $ | 527,467 | | | $ | (47,864) | | | $ | 62,241,145 | | | $ | 0 | | | $ | (55,423,643) | | | $ | 7,297,105 | |
| Stock-based compensation expense | | | | | — | | | — | | | — | | | 149,209 | | | — | | | — | | | 149,209 | |
| Warrant Exchange | | | | | 21,920,820 | | | 219,208 | | | — | | | (5,197,084) | | | — | | | — | | | (4,977,876) | |
| Issuance of common stock for subscription agreements and warrant exercises | | | | | 1,328,405 | | | 13,284 | | | — | | | 318,472 | | | — | | | — | | | 331,756 | |
| At-the-market common stock issuance, net of $0.7 million of commissions and equity issuance costs | | | | | 59,132,191 | | | 591,322 | | | — | | | 14,845,486 | | | — | | | — | | | 15,436,808 | |
| Net loss | | | | | — | | | — | | | — | | | — | | | — | | | (3,613,975) | | | (3,613,975) | |
| Balance at June 30, 2020 | | | | | 135,128,144 | | | $ | 1,351,281 | | | $ | (47,864) | | | $ | 72,357,228 | | | $ | 0 | | | $ | (59,037,618) | | | $ | 14,623,027 | |
| Stock-based compensation expense | | | | | — | | | — | | | — | | | 126,290 | | | — | | | — | | | 126,290 | |
| At-the-market common stock issuance, net of $0.4 million of commission and equity issuance costs | | | | | 27,019,829 | | | 270,199 | | | — | | | 9,875,976 | | | — | | | — | | | 10,146,175 | |
| Net loss | | | | | — | | | — | | | — | | | — | | | — | | | (10,473,847) | | | (10,473,847) | |
| Balance at September 30, 2020 | | | | | 162,147,973 | | | $ | 1,621,480 | | | $ | (47,864) | | | $ | 82,359,494 | | | $ | 0 | | | $ | (69,511,465) | | | $ | 14,421,645 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Series A Convertible Preferred Stock | | Series B Convertible Preferred Stock | | Common Stock | | Treasury Stock | | Additional
Paid-in Capital | | | | Accumulated
Deficit | | Total |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | |
| Balance at December 31, 2020 | 7 | | | $ | — | | | — | | | $ | — | | | 184,133,384 | | | $ | 1,841 | | | $ | (48) | | | $ | 93,059 | | | | | $ | (73,302) | | | $ | 21,550 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 833 | | | | | — | | | 833 | |
| Issuance of common stock for option exercises | — | | | — | | | — | | | — | | | 157,468 | | | 2 | | | — | | | 174 | | | | | — | | | 176 | |
| At-the-market common stock issuance, net | — | | | — | | | — | | | — | | | 987,000 | | | 10 | | | — | | | 4,839 | | | | | — | | | 4,849 | |
| Registered direct offering common stock issuance, net | — | | | — | | | — | | | — | | | 3,000,000 | | | 30 | | | — | | | 21,174 | | | | | — | | | 21,204 | |
| Series B Convertible Preferred Stock issuance, net | — | | | — | | | 54,745 | | | 1 | | | — | | | — | | | — | | | 4,953 | | | | | — | | | 4,954 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (7,077) | | | (7,077) | |
| Balance at March 31, 2021 | 7 | | | $ | — | | | 54,745 | | | $ | 1 | | | 188,277,852 | | | $ | 1,883 | | | $ | (48) | | | $ | 125,032 | | | | | $ | (80,379) | | | $ | 46,489 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,095 | | | | | — | | | 2,095 | |
| Issuance of common stock for option and warrant exercises | — | | | — | | | — | | | — | | | 538,893 | | | 5 | | | — | | | 366 | | | | | — | | | 371 | |
| Registered direct offering common stock issuance, net | — | | | — | | | — | | | — | | | 10,000,000 | | | 100 | | | — | | | 93,306 | | | | | — | | | 93,406 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (25,952) | | | (25,952) | |
| Balance at June 30, 2021 | 7 | | | $ | — | | | 54,745 | | | $ | 1 | | | 198,816,745 | | | $ | 1,988 | | | $ | (48) | | | $ | 220,799 | | | | | $ | (106,331) | | | $ | 116,409 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,347 | | | | | — | | | 1,347 | |
| Issuance of common stock for option exercises | — | | | — | | | — | | | — | | | 232,584 | | | 2 | | | — | | | 107 | | | | | — | | | 109 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (10,755) | | | (10,755) | |
| Balance at September 30, 2021 | 7 | | | $ | — | | | 54,745 | | | $ | 1 | | | 199,049,329 | | | $ | 1,990 | | | $ | (48) | | | $ | 222,253 | | | | | $ | (117,086) | | | $ | 107,110 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Treasury Stock | | Additional
Paid-in Capital | | Accumulated
Other
Comprehensive Income (Loss) | | Accumulated
Deficit | | Total |
| Shares | | Amount | |
| Balance at December 31, 2018 | 4,960,552 | | | $ | 49,606 | | | $ | 0 | | | $ | 18,477,598 | | | $ | 451 | | | $ | (31,237,194) | | | $ | (12,709,539) | |
| Stock-based compensation expense | — | | | — | | | — | | | 415,202 | | | — | | | — | | | 415,202 | |
| Foreign currency translation adjustment | — | | | — | | | — | | | — | | | (282) | | | — | | | (282) | |
| Net loss | — | | | — | | | — | | | — | | | — | | | (6,312,606) | | | (6,312,606) | |
| Balance at March 31, 2019 | 4,960,552 | | | $ | 49,606 | | | $ | 0 | | | $ | 18,892,800 | | | $ | 169 | | | $ | (37,549,800) | | | $ | (18,607,225) | |
| Stock-based compensation expense | — | | | — | | | — | | | 111,807 | | | — | | | — | | | 111,807 | |
| Foreign currency translation adjustment | — | | | — | | | — | | | — | | | (169) | | | — | | | (169) | |
| Conversion of debt | 1,125,673 | | | 11,257 | | | — | | | 13,968,532 | | | — | | | — | | | 13,979,789 | |
| Equity transactions | 157,743 | | | 1,577 | | | — | | | 1,947,308 | | | — | | | — | | | 1,948,885 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | (3,538,810) | | | (3,538,810) | |
| Balance at June 30, 2019 | 6,243,968 | | | $ | 62,440 | | | $ | 0 | | | $ | 34,920,447 | | | $ | 0 | | | $ | (41,088,610) | | | $ | (6,105,723) | |
| Stock-based compensation expense | — | | | — | | | — | | | 193,005 | | | — | | | — | | | 193,005 | |
| Issuance of stock for reverse asset acquisition, net of $5.0 million of costs | 1,576,655 | | | 15,766 | | | — | | | 2,325,284 | | | — | | | — | | | 2,341,050 | |
| Issuance of common stock under Pre-Merger Financing, net of $1.8 million of costs | 2,192,982 | | | 21,930 | | | — | | | 13,229,757 | | | — | | | — | | | 13,251,687 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | (22,773,281) | | | (22,773,281) | |
| Balance at September 30, 2019 | 10,013,605 | | | $ | 100,136 | | | $ | 0 | | | $ | 50,668,493 | | | $ | 0 | | | $ | (63,861,891) | | | $ | (13,093,262) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Series A Convertible Preferred Stock | | Series B Convertible Preferred Stock | | Common Stock | | Treasury Stock | | Additional
Paid-in Capital | | | | Accumulated
Deficit | | Total |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | |
| Balance at December 31, 2019 | 7 | | | $ | — | | | — | | | $ | — | | | 52,746,728 | | | $ | 528 | | | $ | (48) | | | $ | 62,019 | | | | | $ | (51,480) | | | $ | 11,019 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 222 | | | | | — | | | 222 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (3,944) | | | (3,944) | |
| Balance at March 31, 2020 | 7 | | | $ | — | | | — | | | $ | — | | | 52,746,728 | | | $ | 528 | | | $ | (48) | | | $ | 62,241 | | | | | $ | (55,424) | | | $ | 7,297 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 149 | | | | | — | | | 149 | |
| Warrant Exchange | — | | | — | | | — | | | — | | | 21,920,820 | | | 219 | | | — | | | (5,197) | | | | | — | | | (4,978) | |
| Issuance of common stock for subscription agreements and warrant exercises | — | | | — | | | — | | | — | | | 1,328,405 | | | 13 | | | — | | | 319 | | | | | — | | | 332 | |
| At-the-market common stock issuance, net | — | | | — | | | — | | | — | | | 59,132,191 | | | 591 | | | — | | | 14,846 | | | | | — | | | 15,437 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (3,614) | | | (3,614) | |
| Balance at June 30, 2020 | 7 | | | $ | — | | | — | | | $ | — | | | 135,128,144 | | | $ | 1,351 | | | $ | (48) | | | $ | 72,358 | | | | | $ | (59,038) | | | $ | 14,623 | |
| Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 126 | | | | | — | | | 126 | |
| At-the-market common stock issuance, net | — | | | — | | | — | | | — | | | 27,019,829 | | | 270 | | | — | | | 9,876 | | | | | — | | | 10,146 | |
| Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (10,474) | | | (10,474) | |
| Balance at September 30, 2020 | 7 | | | $ | — | | | — | | | $ | — | | | 162,147,973 | | | $ | 1,621 | | | $ | (48) | | | $ | 82,360 | | | | | $ | (69,512) | | | $ | 14,421 | |
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See accompanying notes to condensed consolidated financial statements.
OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| | | Nine months ended September 30, | | Nine months ended September 30, |
| | 2020 | | 2019 | | 2021 | | 2020 |
| Cash flows from operating activities | Cash flows from operating activities | | | | Cash flows from operating activities | | | |
| Net loss | Net loss | $ | (18,031,641) | | | $ | (32,624,697) | | Net loss | $ | (43,784) | | | $ | (18,032) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | Adjustments to reconcile net loss to net cash used in operating activities: | | Adjustments to reconcile net loss to net cash used in operating activities: | |
| Depreciation expense | Depreciation expense | 57,565 | | | 34,626 | | Depreciation expense | 151 | | | 58 | |
| Non-cash interest expense | Non-cash interest expense | 554,801 | | | 1,718,546 | | Non-cash interest expense | 59 | | | 555 | |
| Non-cash lease expense | Non-cash lease expense | 142,947 | | | 202,665 | | Non-cash lease expense | 200 | | | 143 | |
| In-process research and development expense | In-process research and development expense | 7,000,000 | | | 0 | | In-process research and development expense | — | | | 7,000 | |
| Change in fair value of derivative liability | 0 | | | 19,896,626 | | |
| Stock-based compensation expense | Stock-based compensation expense | 498,012 | | | 720,014 | | Stock-based compensation expense | 4,275 | | | 497 | |
| Loss on debt conversion | 0 | | | 341,136 | | |
| Income tax benefit | | Income tax benefit | (52) | | | — | |
| Gain on forgiveness of PPP Note | | Gain on forgiveness of PPP Note | (426) | | | — | |
| Impairment on note receivable | | Impairment on note receivable | 761 | | | — | |
| Other non-cash | Other non-cash | (165,609) | | | 0 | | Other non-cash | — | | | (166) | |
| Changes in assets and liabilities: | Changes in assets and liabilities: | | Changes in assets and liabilities: | |
| Prepaid expenses and other assets | Prepaid expenses and other assets | 794,398 | | | (280,838) | | Prepaid expenses and other assets | 845 | | | 796 | |
| | Accounts payable and accrued expenses | Accounts payable and accrued expenses | (1,133,092) | | | 2,044,901 | | Accounts payable and accrued expenses | 2,925 | | | (1,133) | |
| Other assets | | Other assets | 100 | | | — | |
| Lease obligations | Lease obligations | (143,834) | | | (202,338) | | Lease obligations | (191) | | | (144) | |
| Net cash used in operating activities | Net cash used in operating activities | (10,426,453) | | | (8,149,359) | | Net cash used in operating activities | (35,137) | | | (10,426) | |
| Cash flows from investing activities | Cash flows from investing activities | | Cash flows from investing activities | |
| Purchase of property and equipment | Purchase of property and equipment | (55,488) | | | (2,067) | | Purchase of property and equipment | (747) | | | (56) | |
| Payment of reverse asset acquisition costs | 0 | | | (2,334,063) | | |
| Asset acquisition | | Asset acquisition | (127) | | | — | |
| Issuance of note receivable | | Issuance of note receivable | (750) | | | — | |
| Net cash used in investing activities | Net cash used in investing activities | (55,488) | | | (2,336,130) | | Net cash used in investing activities | (1,624) | | | (56) | |
| Cash flows from financing activities | Cash flows from financing activities | | Cash flows from financing activities | |
| Financing lease principal payments | (17,892) | | | (16,985) | | |
| Proceeds from issuance of common stock | Proceeds from issuance of common stock | 26,692,377 | | | 999,832 | | Proceeds from issuance of common stock | 128,606 | | | 26,693 | |
| Payment of equity issuance costs | Payment of equity issuance costs | (1,083,990) | | | (649,254) | | Payment of equity issuance costs | (8,525) | | | (1,084) | |
| Proceeds from issuance of debt | Proceeds from issuance of debt | 921,415 | | | 6,800,000 | | Proceeds from issuance of debt | — | | | 921 | |
| Payments of debt issuance costs | Payments of debt issuance costs | (5,740) | | | (122,262) | | Payments of debt issuance costs | — | | | (6) | |
| Repayments of debt | Repayments of debt | (4,362,271) | | | (5,290,000) | | Repayments of debt | — | | | (4,362) | |
| Proceeds from Pre-Merger Financing | 0 | | | 22,437,537 | | |
| Financing lease principal payments | | Financing lease principal payments | (10) | | | (18) | |
| Net cash provided by financing activities | Net cash provided by financing activities | 22,143,899 | | | 24,158,868 | | Net cash provided by financing activities | 120,071 | | | 22,144 | |
| Effect of changes in exchange rate on cash | 0 | | | 0 | | |
| Net increase in cash, cash equivalents and restricted cash | 11,661,958 | | | 13,673,379 | | |
| Cash, cash equivalents and restricted cash at beginning of period | 7,595,068 | | | 1,778,613 | | |
| Cash, cash equivalents and restricted cash at end of period | $ | 19,257,026 | | | $ | 15,451,992 | | |
| Supplemental disclosure of non-cash transactions: | | | | |
| Issuance of Warrant Exchange Promissory Notes | $ | 5,625,000 | | | $ | 0 | | |
| Obligation settled with common stock | $ | 331,218 | | | $ | 0 | | |
| Conversion of convertible notes | $ | 0 | | | $ | 13,979,788 | | |
| Right-of-use asset related to operating leases | $ | 0 | | | $ | 470,356 | | |
| Equity issuance costs | $ | 25,000 | | | $ | 1,150,000 | | |
| Reverse asset acquisition costs | $ | 0 | | | $ | 2,711,431 | | |
| Net increase in cash, cash equivalents, and restricted cash | | Net increase in cash, cash equivalents, and restricted cash | 83,310 | | | 11,662 | |
| Cash, cash equivalents, and restricted cash at beginning of period | | Cash, cash equivalents, and restricted cash at beginning of period | 24,190 | | | 7,595 | |
| Cash, cash equivalents, and restricted cash at end of period | | Cash, cash equivalents, and restricted cash at end of period | $ | 107,500 | | | $ | 19,257 | |
OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
(Unaudited)
| | | | | | | | | | | |
| Nine months ended September 30, |
| 2021 | | 2020 |
| Supplemental disclosure of non-cash investing and financing transactions: | | | |
| Exercise of warrants | $ | 603 | | | $ | — | |
| Series B Convertible Preferred Stock issuance | $ | 4,988 | | | $ | — | |
| Forgiveness of PPP Note | $ | 426 | | | $ | — | |
| Purchase of property and equipment | $ | 9 | | | $ | — | |
| Right-of-use asset related to operating leases | $ | 926 | | | $ | — | |
| Issuance of Warrant Exchange Promissory Notes | $ | — | | | $ | 5,625 | |
| Obligation settled with common stock | $ | — | | | $ | 331 | |
| Equity issuance costs | $ | — | | | $ | 25 | |
See accompanying notes to condensed consolidated financial statements.
OCUGEN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Business
Ocugen, Inc. (formerly known as Histogenics Corporation), together with its wholly owned subsidiaries (“Ocugen” or the “Company”), is a biopharmaceutical company focused on discovering, developing and commercializing transformativegene therapies to cure blindness diseases.diseases and developing a vaccine to save lives from COVID-19. The Company is locatedheadquartered in Malvern, Pennsylvania, and manages its business as 1 operating segment.
COVID-19 Vaccine
In February 2021, the Company entered into a Co-Development, Supply and Commercialization Agreement with Bharat Biotech International Limited ("Bharat Biotech"), pursuant to which the Company obtained an exclusive right and license under certain of Bharat Biotech's intellectual property rights, with the right to grant sublicenses to develop, manufacture, and commercialize BBV152, known as COVAXIN outside the United States, for the prevention of COVID-19 caused by SARS-CoV-2 in humans in the United States, its territories, and possessions. In June 2021, the Company entered into an amendment to the Co-Development, Supply and Commercialization Agreement (as so amended, the "Covaxin Agreement") pursuant to which the parties agreed to expand the Company's rights to develop, manufacture, and commercialize COVAXIN to include Canada in addition to the United States, its territories, and possessions (the “Ocugen Covaxin Territory”).
COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate and is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. COVAXIN requires a 2-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). COVAXIN has been authorized for emergency use in India for ages 18 years and older. In November 2021, COVAXIN was awarded an Emergency Use Listing ("EUL") by the World Health Organization ("WHO").
In July 2021, the Company announced that COVAXIN demonstrated an overall vaccine efficacy against COVID-19 disease of 77.8%, with efficacy against severe COVID-19 disease of 93.4%, and efficacy against asymptomatic COVID-19 disease of 63.6% in the Phase 3 clinical trial conducted by Bharat Biotech in India. Adverse events in the COVAXIN and control arms of the Phase 3 clinical trial were observed in 12.4% of subjects, with less than 0.5% of subjects experiencing serious adverse side effects. The majority of the symptomatic cases identified in aggregate in the COVAXIN and control arms in the Phase 3 clinical trial were COVID-19 variants, the majority of which were identified to be the Delta variant, B.1.617.2. Subjects vaccinated with COVAXIN in the Phase 3 clinical trial showed protection against the Delta variant, B.1.617.2, showing a vaccine efficacy of 65.2%. Additionally, in in-vitro studies conducted by the Indian Council of Medical Research ("ICMR") — National Institute of Virology, COVAXIN demonstrated potential effectiveness against the Zeta variant, B.1.1.28.2, the Alpha variant, B.1.1.7, and the Beta variant, B.1.351.
In June 2021, the U.S. Food and Drug Administration (the "FDA") provided feedback to the Company regarding the data and information contained in a "Master File" that was previously submitted to the FDA and recommended that the Company pursue a Biologics License Application ("BLA") submission instead of an Emergency Use Authorization ("EUA") application for COVAXIN for ages 18 years and older in the United States. As part of the feedback provided by the FDA regarding the "Master File," the FDA also requested additional information and data. The Company has continued discussions with the FDA regarding the appropriate regulatory pathway for COVAXIN for ages 18 years and older in the United States as well as the data requirements for COVAXIN under a BLA submission. In October 2021, the Company filed an Investigational New Drug ("IND") application with the FDA to initiate a Phase 3 immuno-bridging study evaluating COVAXIN for ages 18 years and older. The Company will also initiate a safety-bridging study under the IND, if required by the FDA, to support a BLA submission. The Company anticipates filing a BLA submission with the FDA by the end of 2022.
In November 2021, the Company submitted a request to the FDA for EUA for COVAXIN for pediatric use in children ages two to 18 years in the United States. The EUA submission was based on the results of a Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India.
The Company is also pursuing approval for COVAXIN in Canada. In July 2021, the Company announced it had completed its rolling submission to Health Canada for COVAXIN. The rolling submission process, which permits companies to submit safety and efficacy data and information as they become available, was recommended and accepted under the Minister of Health’s Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 (the "Interim Order") and transitioned to a New Drug Submission ("NDS") for COVID-19. The submission was conducted through the
Company's Canadian affiliate, Vaccigen, Ltd. ("Vaccigen"). The Interim Order expired on September 16, 2021. The expiration of the Interim Order has not impacted the Company's NDS.
The Company is evaluating its commercialization strategy for COVAXIN in the United States and Canada, if authorized or approved in either jurisdiction. In June 2021, the Company selected Jubilant HollisterStier as its manufacturing partner for COVAXIN to prepare for the potential commercial manufacturing for the Ocugen Covaxin Territory. The Company expects to enter into a master services agreement with Jubilant HollisterStier for the manufacture of COVAXIN and the technology transfer process to Jubilant HollisterStier has been initiated.
In September 2021, the Company entered into a Development and Commercial Supply Agreement (the “Supply Agreement”) with Bharat Biotech, pursuant to which Bharat Biotech will supply the Company with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the completion of the Company’s technology transfer to Jubilant HollisterStier. Following the completion of the Company’s technology transfer to Jubilant HollisterStier, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval.
Modifier Gene Therapy Platform
The Company is developing a breakthrough modifier gene therapy platform to generate therapies designed to fulfill unmet medical needs in the area of retinal diseases, including inherited retinal diseases ("IRDs") and dry age-related macular degeneration ("AMD"). Ocugen'sThe Company's modifier gene therapy platform is based on nuclear hormone receptors ("NHRs"(“NHRs”), which have the potential to restore homeostasis, the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one1 genetic mutation, Ocugenthe Company believes that its gene therapy platform, through its use of NHRs, represents a novel approach in that it may address multiple retinal diseases with one1 product.
Ocugen'sThe Company believes that OCU400, its first product candidate being developed with its modifier gene therapy candidate, OCU400, is being developedplatform, has the potential to treatbe broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including retinitis pigmentosa ("RP"), a group of rare genetic disorders that involves a breakdown and loss of cells in the retina and can lead to visual impairment and blindness. Ocugenleber congenital amaurosis ("LCA"). OCU400 has received 4 Orphan Drug Designations ("ODDs") from the Food and Drug Administration ("FDA")FDA for the treatment of certain disease genotypes: nuclear receptor subfamily 2 group E member 3 ("NR2E3"), centrosomal protein 290 ("CEP290"), rhodopsin ("RHO"), and phosphodiesterase 6B ("PDE6BPDE6ß") mutation-associated RP. Ocugeninherited retinal degenerations. In November 2021, the Company filed an IND application with the FDA for OCU400 for the treatment of the NR2E3 and RHO disease genotypes. The Company is planning to initiate 2a Phase 1/2a2 clinical trial for OCU400 for the treatment of the NR2E3 and RHO disease genotypes in the United States near the end of 2021. OCU400 additionally has received Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC"), based on the recommendation of the European Medicines Agency ("EMA"), for RP and LCA, which the Company believes further supports the potential broad spectrum application of OCU400 to treat many IRDs. The Company is currently evaluating options to commence OCU400 clinical trials for OCU400 in the second half of 2021. Ocugen'sEurope in 2022. The Company's second gene therapy candidate, OCU410, is being developed to utilize the nuclear receptor genes RAR-related orphan receptor A ("RORA") for the treatment of dry AMD. This candidateThe Company is currently inexecuting IND-enabling preclinical development. Ocugen is planningstudies to initiatesupport a Phase 1/2a2 clinical trialtrial. The Company has engaged CanSino Biologics, Inc. ("CanSinoBIO") to manufacture clinical supplies and be responsible for OCU410 in 2022.
Ocugen is also conducting preclinicalthe chemistry, manufacturing, and controls ("CMC") development for itsOCU400 and OCU410. See Note 3 for additional information about the Company's collaboration with CanSinoBIO.
Novel Biologic Therapy for Retinal Diseases
The Company's biologic product candidate, OCU200. OCU200, is a novel fusion protein designedbeing developed to treat diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet AMD. Ocugen plans to expand the therapeutic applications of OCU200 beyond DME, DR and wet AMD to potentially include macular edema following retinal vein occlusion and myopic choroidal neovascularization. Ocugen expects to initiate Investigational New Drug ("IND") enablingThe Company is currently executing IND-enabling preclinical studies for OCU200 in 2021 andto support a Phase 1/2a1 clinical trial for OCU200 intrial. The Company has completed the first halftechnology transfer of 2022.
Ocugen was developing OCU300, a small molecule therapeutic for the treatment of symptoms associated with ocular graft versus-host disease ("oGVHD"). On June 1, 2020, Ocugen announced that it had discontinued the Phase 3 trial of OCU300 based on results of a pre-planned interim sample size analysis conducted by an independent Data Monitoring Committee, which indicated the trial was unlikely to meet its co-primary endpoints upon completion. The trial was not stopped based on safety concerns. Ocugen is no longer pursuing the development of this product candidate.
Merger with Histogenics
On September 27, 2019, the Company completed its reverse merger with Ocugen OpCo, Inc. (“OpCo”) in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of April 5, 2019, by and among Histogenics Corporation ("Histogenics"), OpCo and Restore Merger Sub, Inc., a wholly owned subsidiary of Histogenics (“Merger Sub”), as amended (the “Merger Agreement”), pursuant to which Merger Sub merged with and into OpCo, with OpCo surviving as a wholly owned subsidiary of Histogenics (the “Merger”). Immediately after completion of the Merger, Histogenics changed its name to Ocugen, Inc. and the business conducted by Ocugen, Inc. became the business conducted by OpCo. OpCo is deemed to be the accounting acquirer. Accordingly, the historical financial statements of OpCo became the Company’s historical financial statements, including the comparative prior periods. See Note 3 for additional information.
Reverse Stock Split
In connection with, and immediately priormanufacturing processes to the completion of the Merger, Histogenics effected a reverse stock split of the common stock, at a ratio of 1-for-60 (the ‘‘Reverse Stock Split’’Company's contract development and manufacturing organization ("CDMO"). Under the terms of the Merger Agreement, the Company issued common stock to OpCo’s stockholders at an exchange rate of 0.4794 shares of common stock, after taking into account the Reverse Stock Split, for each share of OpCo’s common stock outstanding immediately prior to the Merger.
The capital structure, including the number of shares of common stock issued appearing in the condensed consolidated balance sheets for the periods presented, reflects that of Ocugen. All references in the condensed consolidated financial statements to the number of shares and per-share amounts of common stock have been retroactively restated to reflect the exchange rate.will manufacture OCU200 clinical supplies.
Going Concern
The Company has incurred recurring net losses and negative cash flows from operations since inception and has funded its operating lossesoperations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes, debt, and grant proceeds. The Company incurred net losses of approximately $18.0$43.8 million and $32.6$18.0 million for the nine months ended September 30, 20202021 and 2019,2020, respectively. As of September 30, 2020,2021, the Company had an accumulated deficit of $69.5$117.1 million and cash, cash equivalents, and restricted cash totaling $19.3$107.5 million.
The Company has a limited operating history and its prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in its industry. The Company intends to continue its research, development, and developmentcommercialization efforts for its product candidates, which will require significant additional funding. If the Company is unable to obtain additional financing in the future or its research, development, and developmentcommercialization efforts require higher than anticipated capital, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital by raising additional capital through public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, salesales of assets, andgovernment grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions.institutions, or other funding from the government or other third parties. Such financing may not be available at all, or on terms that are favorable to the Company. While management of the Company believes that it has a plan to fund ongoing operations, its plan may not be successfully implemented. Failure to generate sufficient cash flows from operations, raise additional capital, through one or more financings, or appropriately manage certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives.
As a result of these factors, together with the anticipated increase in spending that will be necessary to continue to research, develop, and commercialize the Company’s product candidates, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim reporting. The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, that are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosures of the Company normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2019,2020, included in the Company's 2019 Annual Report.Report on Form 10-K filed with the SEC on March 19, 2021 (the "2020 Annual Report").
The condensed consolidated financial statements include the accounts of Ocugen Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform with current period presentation.
Use of Estimates
In preparing the condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions primarily include those used in the accounting for clinical trialresearch and development accruals, warrant transactions, asset held for sale,the fair value measurement of equity instruments, and the valuationcollectibility of debt and equity instruments, including embedded derivatives and stock-based compensation.
Collaboration Arrangements
The Company assesses whether collaboration agreements are subject to the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 808, Collaborative Arrangements (“ASC 808”), based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of ASC 808, the Company assesses whether the payments between the Company and the collaboration partner are subject to other accounting literature. If payments from the collaboration partner represent consideration from a customer, the Company accounts for those payments within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). However, if the Company concludes that its collaboration partner is not a customer, the Company will determine if analogy to other authoritative literature is appropriate.
In April 2020, the Company entered into a collaboration agreement subject to ASC 808. Under this arrangement, the Company records cost reimbursements received as a reduction of research and development expense in the period incurred andrecord royalty payments received as collaboration revenue in the period in which the underlying sale occurs. See Note 5occurs and record expenses and expense reimbursements as either research and
development expense or general and administrative expense, or a reduction thereof, based on the underlying nature of the expense or expense reimbursement. During the nine months ended September 30, 2020, the Company recorded collaboration revenue from an agreement accounted for additional information.as a collaborative arrangement within the scope of ASC 808. No collaboration revenue was recorded during the nine months ended September 30, 2021.
Exit and Disposal Activities
The Company records liabilities for one-time termination benefits in accordance with FASB ASC Topic 420, Exit and Disposal Cost Obligations ("ASC 420"). In accordance with ASC 420, an arrangement for one-time termination benefits exists at the date the plan of the termination meets the following criteria: (i) management commits to a plan of termination, (ii) the plan identifies the impacted employees and expected completion date, (iii) the plan identifies the terms of the benefits arrangement, (iv) it is unlikely significant changes to the plan will be made or the plan will be withdrawn, and (v) the plan has been communicated to employees. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits, are recognized ratably over the future service period.
The Company records liabilities for employee termination benefits covered by ongoing benefit arrangements in accordance with FASB ASC Topic 712, Compensation—Nonretirement Postemployment Benefits ("ASC 712"). In accordance with ASC 712, costs for termination benefits under ongoing benefits arrangements are recognized when management has committed to a plan of termination and the costs are probable and estimable.
Severance-related charges, once incurred, are recognized as either research and development expense or general and administrative expense within the condensed consolidated statements of operations and comprehensive loss depending on the job function of the former employee.
Asset Held for Sale
An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value.
A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale, and an impairment loss would be recognized to the extent the carrying amount exceeds the asset's fair value less cost to sell.
As of December 31, 2019, the Company had an intangible asset held for sale, which it held prior to the Merger. The intangible asset qualified and was recorded as held for sale as of the date of the reverse asset acquisition and was carried at its original fair value less cost to sell of $7.0 million. The Company concluded during the three months ended September 30, 2020, that a sale of the intangible asset held for sale was no longer probable to be completed within one year from the date the intangible asset was initially recorded as held for sale. As such, the carrying value of the intangible asset was reduced to 0 with the corresponding charge of $7.0 million recognized as in-process research and development expense during the three and nine months ended September 30, 2020 as the in-process research and development does not have an alternative future use.
Although the Company has concluded that a sale of the intangible asset is no longer probable to be completed within one year from the date the intangible asset was initially recorded as held for sale, the Company is party to an Asset Purchase Agreement
(as defined within Note 3) related to the intangible asset as of September 30, 2020, and continues to market the asset for sale. In the event of a sale of the intangible asset under the Asset Purchase Agreement or to another party, the Company will account for the sale in the period in which the sale occurs.
Fair Value Measurements
The companyCompany follows the provisions of theFASB ASC Topic 820, Fair Value Measurements (“ASC 820”), which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair measurements.
The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximates their fair values due to the short-term nature of these instruments.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
The Company had derivativecarrying value of certain financial instruments, that wereincluding cash and cash equivalents, accounts payable, and accrued expenses approximates their fair valued on a recurring basis using Level 3 inputs duringvalues due to the three and nine months ended September 30, 2019. There were no derivative instruments fair valued on a recurring basis using Level 3 inputs during the three and nine months ended September 30, 2020.short-term nature of these instruments. As of September 30, 2020, the Company estimates the fair value of the note with EB5 Life Sciences, L.P. was $1.0 million using Level 2 inputs. As of September 30, 2020,2021, the Company believes the fair valuesvalue using Level 2 inputs of both the Warrant Exchange Promissory Notesborrowings under the EB-5 Loan Agreement (as defined in Note 9) and the loan received under the PPP of the CARES Act (as defined in Note 9)8) approximate their carrying values.value. See Note 98 for additional information.
Cash, Cash Equivalents, and Restricted Cash
The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Cash and cash equivalents may include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposit, commercial paper, and United StatesU.S. government and United StatesU.S. government agency obligations. The Company’s restricted cash balance consists of cash held to collateralize a corporate credit card account.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets to the total amount shown in the condensed consolidated statements of cash flows:flows (in thousands):
| | | As of September 30, | | As of September 30, |
| | 2020 | | 2019 | | 2021 | | 2020 |
| Cash and cash equivalents | Cash and cash equivalents | $ | 19,105,830 | | | $ | 15,301,082 | | Cash and cash equivalents | $ | 107,349 | | | $ | 19,106 | |
| Restricted cash | Restricted cash | 151,196 | | | 150,910 | | Restricted cash | 151 | | | 151 | |
| Total cash, cash equivalents and restricted cash | $ | 19,257,026 | | | $ | 15,451,992 | | |
| Total cash, cash equivalents, and restricted cash | | Total cash, cash equivalents, and restricted cash | $ | 107,500 | | | $ | 19,257 | |
Property and Equipment, Net
Property and equipment is recorded at historical cost. Significant additions or improvements are capitalized, and expenditures for repairs and maintenance are charged to expense as incurred. Gains and losses on disposal of assets are included in the condensed consolidated statements of operations and comprehensive loss. Depreciation is calculated using the straight-line method and is recognized over the expected useful life of the underlying asset. The Company's property and equipment currently includes furniture and fixtures, machinery and equipment, leasehold improvements, and construction in progress. The Company's furniture and fixtures have an expected useful life of three to seven years. The Company's machinery and equipment have an expected useful life of five to seven years. Leasehold improvements are amortized over the shorter of their expected useful lives or the remaining lease term. If a leasehold improvement transfers ownership to the Company at the end of the lease term, the leasehold improvement is amortized over its expected useful life. Construction in progress is not depreciated until such time that the asset is completed and placed into service. Once placed into service, the asset is depreciated over its expected useful life.
Leases
The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company hasCompany’s current and historical lease agreements which include lease and non-lease components, which the Company has elected not to account for as a single lease componentseparately for all classes of underlying assets. Lease expense for variable lease components areis recognized when the obligation is probable.
Operating leases are included in other assets and operating lease obligations onin the Company’s condensed consolidated balance sheets. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term.term and recognized as research and development expense or general and administrative expense based on the underlying nature of the expense. The Company primarilycurrently leases real estate and leases for real estate are classified as operating leases. FASB ASC Topic 842, Leases ("ASC 842") requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As anThe implicit interest rate iswas not readily determinable in the Company’s current and historical operating leases, therefore the incremental borrowing rate iswas used based on the information available at the commencement date in determining the present value of lease payments.
The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Companyan option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met.
Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Companyan option to purchase the underlying asset if reasonably certain.
Variable lease payments not dependent on aan index or rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed asis probable. Variable lease payments include the Company's proportionate share of certain utilities and other operating expenses and are presented as operating expenses in the Company’s condensed consolidated statements of operations and comprehensive loss in the same line item as expense arising from fixed lease payments.
Stock-Based Compensation
The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Compensation — Stock Compensation (“ASC 718”). The Company has issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and also accounts for certain issuances of preferred stock and warrants in accordance with ASC 718. ASC 718 requires all stock-based payments, to employees, including grants of employee stock options and restricted stock units and modifications to existing agreements,RSUs, to be recognized in the condensed consolidated statements of operations and comprehensive loss based on their grant date fair values. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted. For RSUs, the fair value of the RSUs is determined by the market price of a share of the Company's common stock at the grant date. The Company recognizes forfeitures as they occur.
The Company’s stock-based awards are subject to service-based vesting conditions. Compensation expense related to stock-based compensation awards to employees and directorsgranted with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock-based compensation awards generally vest over a one to three year requisite service period and have a contractual term of 10 years. To the extent a stock-based compensation award is subject to performance-based vesting conditions, the amount of compensation expense recorded reflects an assessment of the probability of achieving the performance conditions. Compensation expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Shares issued upon stock option exercise and RSU vesting are newly issued common shares.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected life of the stock option, stock price volatility, the risk-free interest rate, and expected dividends. The assumptions used in the Company’s Black-Scholes option-pricing model represent management’s best estimates and involve a number of variables, uncertainties, and assumptions, and the application of management’s judgment, as they are inherently subjective. If any assumptions change, the Company’s stock-based compensation expense could be materially different in the future.
Asset Held for Sale
During 2019, the Company had an intangible asset held for sale that was carried at its original fair value less cost to sell of $7.0 million. The Company concluded during the three and nine months ended September 30, 2020, that a sale of the intangible asset was no longer probable to be completed within one year from the date the intangible asset was initially recorded as held for sale. As such, the carrying value of the intangible asset was reduced to zero with the corresponding charge of $7.0 million recognized as in-process research and development expense in the condensed consolidated statements of operations and comprehensive loss during the three and nine months ended September 30, 2020 as the in-process research and development did not have an alternative future use.
Recently Adopted Accounting Standards
In August 2018,December 2019, the FASB issued Accounting Standards Update ("ASU") No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements and was effective for the Company on January 1, 2020. The adoption of this standard did not have a material impact on the Company's disclosures.
In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This standard clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, ASC 606 guidance should be applied, including recognition, measurement, presentation and disclosure requirements. The standard adds unit-of-account guidance to ASC 808 to align with the guidance in ASC 606 when an entity is assessing whether the collaborative arrangement or a part of the collaborative arrangement is within the scope of ASC 606. The standard also precludes a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties with revenue from contracts with customers recognized under ASC 606 if the collaborative arrangement participant is not a customer. This standard was effective for the Company on
January 1, 2020. Consistent with the guidance in this standard, the Company assesses whether collaboration arrangements are within the scope of ASC 606. For collaboration arrangements that are not within the scope of ASC 606, applicable transactions with collaborative arrangement participants are presented as collaboration revenue rather than revenue from contracts with customers. See above and Note 5 for additional information.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company does not currently expect the adoption of these standards to have a material impact on its condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.Taxes This standard will have an effective date and transition date of January 1, 2021.. This standard removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocations, and calculating income taxes in interim periods. This standard also adds guidance to reduce complexity in certain areas, including recognizing franchise tax, recognizing deferred taxes for the tax basis of goodwill, allocating taxes to the members of a consolidated group, and recognizing the effect of enacted changes in tax laws or rates during an interim period. This standard was effective for the Company on January 1, 2021. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements
In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). This standard will have an effective and transition date of January 1, 2022. This standard clarifies and reduces diversity in an issuer's accounting for modifications or exchanges of freestanding equity-classified written call options, including warrants, that remain equity-classified after modification or exchange. The standard requires an entity to treat a modification or an exchange of a freestanding equity-classified written call option that remains equity-classified after the modification or exchange as an exchange of the original instrument for a new instrument. The standard additionally provides guidance on measuring and recognizing the effect of a modification or an exchange. The Company does not currently expect the adoption of this standard to have a material impact on itsthe Company's condensed consolidated financial statements.
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Hedging — Contracts in Entity's Own Equity (Subtopic 815-40). This standard will have an effective and transition date of January 1, 2024. Early adoption is permitted beginning January 1, 2021.currently permitted. This standard simplifies an issuer's accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features as well as simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification. This standard also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential share settlement (if the effect is more dilutive) for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. The standard requires new disclosures about events that occur during the reporting period and cause conversion contingencies to be met and about the fair value of a public business entity's convertible debt at the instrument level, among other things. The Company does not currently expect the adoption of this standard to have a material impact on itsthe Company's condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU No. 2016-13, which have the same effective date and transition date of January 1, 2023. ASU No. 2016-13, as amended, requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company does not currently expect the adoption of this standard to have a material impact on the Company's condensed consolidated financial statements.
3. MergerLicense and FinancingDevelopment Agreements
Pre-Merger FinancingCo-Development, Supply and Commercialization Agreement with Bharat Biotech
In June 2019, OpCo and HistogenicsThe Company entered into the Covaxin Agreement with Bharat Biotech to co-develop COVAXIN, a Securities Purchasewhole-virion inactivated COVID-19 vaccine being developed to prevent COVID-19 infection, for the U.S. and Canadian markets. The Covaxin Agreement (aswas originally entered into in February 2021 with respect to the U.S. market and was subsequently amended in June 2021 to add rights to the "Financing SPA") with certain accredited investors (the "Investors").Canadian market. Pursuant to the Financing SPA, amongCovaxin Agreement, the Company obtained an exclusive right and license under certain of Bharat Biotech’s intellectual property rights, with the right to grant sublicenses, to develop, manufacture, and commercialize COVAXIN in the Ocugen Covaxin Territory. In consideration of the license and other things, (i) immediatelyrights granted by Bharat Biotech to the Company, the parties agreed to share any profits generated from the commercialization of COVAXIN in the Ocugen Covaxin Territory, with the Company retaining 45% of such profits, and Bharat Biotech receiving the balance of such profits. In consideration of the expansion of the Ocugen Covaxin Territory to include Canada, the Company paid Bharat Biotech a non-refundable, upfront payment of $15.0 million in June 2021, which was recognized as research and development expense in the condensed consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2021. The Company additionally agreed to pay Bharat Biotech $10.0 million within 30 days after the first commercial sale of COVAXIN in Canada. The Covaxin Agreement is a collaboration arrangement within the scope of ASC 808.
Under the Covaxin Agreement, the Company and Bharat Biotech will collaborate to develop COVAXIN for their respective territories. Except with respect to manufacturing rights under certain circumstances subsequently described, the Company has the exclusive right and is solely responsible for researching, developing, manufacturing, and commercializing COVAXIN for the Ocugen Covaxin Territory. Bharat Biotech is responsible for researching, developing, manufacturing, and commercializing COVAXIN outside of the Ocugen Covaxin Territory. Bharat Biotech has agreed to provide to the Company all preclinical and clinical data, and to transfer to the Company certain proprietary technology owned or controlled by Bharat Biotech, that is necessary for the successful commercial manufacture and supply of COVAXIN to support commercial sale in the Ocugen Covaxin Territory. In September 2021, the Company entered into the Supply Agreement with Bharat Biotech, pursuant to which Bharat Biotech will supply the Company with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the Merger, OpCo issued 2.2 million sharescompletion of common stockthe Company’s technology transfer to Jubilant HollisterStier. Following the Investors, (ii) on October 4, 2019,completion of the Company’s technology transfer to Jubilant HollisterStier, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval. The technology transfer process to Jubilant HollisterStier has been initiated. In March 2021, the Company issued 2.2 million shares of Series B Convertible Preferred Stock (as defined in Note 9) as an advance payment for the Company's common stocksupply of COVAXIN to be provided by Bharat Biotech under the Investors and (iii) on October 4, 2019, the Company issued 3 series of warrants to purchase shares of the Company’s common stock (the “Series A Warrants,” the “Series B Warrants” and the “Series C Warrants” and collectively, the “Pre-Merger Financing Warrants”) in exchange for an aggregate purchase price of $25.0 million (the "Pre-Merger Financing").Supply Agreement. See Note 129 for additional information.
Merger with Histogenics
On September 27, 2019,information about the Company completed the Merger in accordance with the terms of the Merger Agreement. The Merger was structured as a stock-for-stock transaction whereby all of OpCo’s outstanding shares of common stock and securities convertible into or exercisable for OpCo’s common stock were converted into the rightSeries B Convertible Preferred Stock issuance to receive Histogenics’ common stock and securities convertible into or exercisable for Histogenics’ common stock.
In accordance with ASC Topic 805, Business Combinations (“ASC 805”), the Company concluded that, while Histogenics was the legal acquirer, OpCo was the accounting acquirer due to the fact that (i) OpCo’s shareholders had the majority of the votingBharat Biotech.
rightsThe Covaxin Agreement continues in Ocugen, (ii) OpCo held alleffect for the commercial life of COVAXIN, subject to the earlier termination of the board seatsCovaxin Agreement in accordance with its terms. The Covaxin Agreement also contains customary representations and warranties made by both parties and customary provisions relating to indemnification, limitation of liability, confidentiality, information and data sharing, and other matters. The Supply Agreement expires upon expiration of the combined companyCovaxin Agreement and (iii) OpCo management held all key positionsmay be earlier terminated by either party in the managementevent of an uncured material breach or bankruptcy of the combined company.other party.
Co-Development and Commercialization Agreement with CanSinoBIO
In 2019, the Company entered into a co-development and commercialization agreement with CanSinoBIO with respect to the development and commercialization of OCU400. The co-development and commercialization agreement was subsequently amended in September 2021 (as so amended, the "CanSinoBIO Agreement"), whereby OCU410 was added to the Company's existing collaboration with CanSinoBIO. Pursuant to the CanSinoBIO Agreement, the Company and CanSinoBIO will collaborate on the development of OCU400 and OCU410 and CanSinoBIO will be responsible for the CMC development and manufacture of clinical supplies of such products and be responsible for the costs associated with such activities. CanSinoBIO will have an exclusive option to obtain a non-exclusive license from the Company to manufacture OCU400 and OCU410 for commercial sale by the Company. CanSinoBIO has an exclusive license to develop, manufacture, and commercialize OCU400 and OCU410 in and for China, Hong Kong, Macau, and Taiwan (the “CanSinoBIO Territory”), and the Company maintains exclusive development, manufacturing, and commercialization rights with respect to OCU400 and OCU410 outside the CanSinoBIO Territory (the “Company Territory”).
CanSinoBIO will pay to the Company an annual royalty between mid- and high-single digits based on Net Sales (as defined in the CanSinoBIO Agreement) of OCU400 and OCU410 in the CanSinoBIO Territory. The Company further concluded that Histogenics did not meetwill pay to CanSinoBIO an annual royalty between low- and mid-single digits based on Net Sales (as defined in the definitionCanSinoBIO Agreement) of OCU400 and OCU410 in the Company Territory.
Unless earlier terminated in accordance with its terms, the CanSinoBIO Agreement will continue in force on a business under ASC 805 due tocountry-by-country and product-by-product basis until the fact that substantially alllater of (a) the expiration of the fair valuelast valid claim of patent rights of the gross assets disposedCompany covering such products and (b) the 10th anniversary of is concentratedthe first commercial sale of such products in a single identifiable asset or a group of similar identifiable assets. Therefore, the Merger was accounted for as a reverse asset acquisition.such country.
In4.Notes Receivable
On April 13, 2021, the Company received a promissory note in the principal amount of $0.8 million from a company in connection with a potential collaboration. The promissory note bore interest at a rate per annum of 5% and the Merger,outstanding principal balance of the promissory note plus any accrued and unpaid interest thereon was payable in full on May 8, 2019, Histogenics entered intoApril 13, 2022 (the "Maturity Date"). Effective July 2021, the Company accepted an asset purchase agreement (the "Asset Purchase Agreement"amended and restated promissory note (as so amended and restated, the "Promissory Note") with Medavate Corp., pursuant to which Histogenicsthe parties agreed to sell substantially allextend the Maturity Date of its assets relatingthe Promissory Note to its NeoCart® program for $6.5 million. The parties subsequently amended the Asset Purchase Agreement toJune 30, 2022 and increase the purchase priceinterest rate per annum to $7.0 million9% with the purchase price increasing 10% per month (or any portion thereof) starting October 31, 2019 if the closing date of the Asset Purchase Agreement did not occur prior to October 31, 2019.quarterly interest payments. The CompanyPromissory Note may terminate the Asset Purchase Agreementbe prepaid in whole or in part at any time, without recourse.together with accrued and unpaid interest. The Asset Purchase Agreement closing date didPromissory Note contains customary covenants and events of default, including, among others, failure to make payment, breach of agreement, and bankruptcy.
The Company evaluated the probability of collecting the full principal and accrued interest balance under the terms of the Promissory Note and determined that collection was not occur as ofprobable. During the nine months ended September 30, 2020 and2021, the Company has not terminatedwrote off the Asset Purchase Agreement as of September 30, 2020.
The NeoCart® asset was held for sale as of December 31, 2019. The NeoCart® asset qualified as held for sale asfull principal and accrued interest balance of the datePromissory Note and recorded the write-off as a loss within other income (expense) within the condensed consolidated statements of the reverse asset acquisitionoperations and was carried at its original fair value less cost to sell valued at the acquisition date based on a quoted price comprehensive loss.
®5. asset did not qualify as held for sale as of September 30, 2020. See Note 2 for additional information.
4. Net Loss Per Share of Common StockProperty and Equipment
The following table sets forthprovides a summary of the computationmajor components of basicproperty and diluted earnings per share forequipment as reflected on the condensed consolidated balance sheets (in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| Furniture and fixtures | $ | 322 | | | $ | 166 | |
| Machinery and equipment | 856 | | | 452 | |
| Leasehold improvements | 167 | | | 177 | |
| Construction in progress | 41 | | | — | |
| Financing lease right-of-use asset | — | | | 64 | |
| Total property and equipment | 1,386 | | | 859 | |
| Less: accumulated depreciation | (334) | | | (226) | |
| Total property and equipment, net | $ | 1,052 | | | $ | 633 | |
The Company recognized depreciation expense of $0.1 million and $0.2 million during the three and nine months ended September 30, 2021, respectively. The Company recognized depreciation expense of $19.8 thousand and $0.1 million during the three and nine months ended September 30, 2020, and 2019:respectively.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
| Net loss—basic and diluted | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (18,031,641) | | | $ | (32,624,697) | |
| Deemed dividend related to Warrant Exchange (Note 12) | 0 | | | 0 | | | (12,546,340) | | | 0 | |
| Net loss to common stockholders | $ | (10,473,847) | | | $ | (22,773,281) | | | $ | (30,577,981) | | | $ | (32,624,697) | |
| Shares used in calculating net loss per common share—basic and diluted | 141,591,218 | | | 6,411,308 | | | 92,764,157 | | | 5,839,840 | |
| Net loss per common share—basic and diluted | $ | (0.07) | | | $ | (3.55) | | | $ | (0.33) | | | $ | (5.59) | |
6. Operating Leases
The following potentially dilutive securitiesCompany has commitments under an operating lease for certain facilities used in its operations including for the use of laboratory, office, and storage space located in Malvern, Pennsylvania (the “Lease Agreement”). The Lease Agreement was determined to have two lease components per ASC 842, a laboratory space lease component (the "Initial Premises") and an office, storage, and future expanded laboratory space lease component (the "Expansion Premises"), with varying commencement dates. The Initial Premises commencement date occurred in December 2020 and the Expansion Premises commencement date occurred in January 2021. The Lease Agreement has an initial term of seven years and the Company has the option to extend the Lease Agreement for 1 additional five-year term. The option for extension has been excluded from the computation of diluted weighted average shares outstanding,lease term (and lease liability) for the Lease Agreement as their inclusion would have been antidilutive:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
| Options to purchase common stock | 4,268,277 | | | 500,933 | | | 4,268,277 | | | 500,933 | |
| Warrants | 870,017 | | | 870,017 | | | 870,017 | | | 870,017 | |
| Series A Warrants | 0 | | | 8,771,928 | | | 0 | | | 8,771,928 | |
| Series B Warrants (1) | 0 | | | 8,007,461 | | | 0 | | | 8,007,461 | |
| Series C Warrants | 0 | | | 50,000,000 | | | 0 | | | 50,000,000 | |
| Total | 5,138,294 | | | 68,150,339 | | | 5,138,294 | | | 68,150,339 | |
_______________________
(1) Series B Warrants doit is not includereasonably certain that the additional Series B Warrants that were contingentCompany will exercise such option. The Company terminated a former lease agreement for its previous office space with the same landlord without penalty upon the reset pricingcommencement of the Expansion Premises in January 2021.
The components of lease expense were as discussed in Note 12.follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
| Operating lease cost | $ | 66 | | | $ | 48 | | | $ | 200 | | | $ | 143 | |
| Variable lease cost | 26 | | | 21 | | | 79 | | | 62 | |
| Total lease cost | $ | 92 | | | $ | 69 | | | $ | 279 | | | $ | 205 | |
Supplemental balance sheet information related to leases was as follows (in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| Right-of-use assets, net | $ | 1,430 | | | $ | 434 | |
| | | |
| Current lease obligations | $ | 172 | | | $ | 44 | |
| Non-current lease obligations | 1,280 | | | 389 | |
| Total lease liabilities | $ | 1,452 | | | $ | 433 | |
In April 2020,Supplemental information related to leases was as follows:
| | | | | | | | | | | |
| Nine months ended September 30, |
| 2021 | | 2020 |
| Weighted-average remaining lease term — operating leases (years) | 6.2 | | 1.4 |
| Weighted-average discount rate — operating leases | 4.6 | % | | 7.6 | % |
Future minimum operating lease base rent payments are approximately as follows (in thousands):
| | | | | |
| For the Years Ending December 31, | Amount |
| Remainder of 2021 | $ | 41 | |
| 2022 | 252 | |
| 2023 | 261 | |
| 2024 | 269 | |
| 2025 | 277 | |
| Thereafter | 578 | |
| Total | $ | 1,678 | |
| Less: present value adjustment | (226) | |
| Present value of minimum lease payments | $ | 1,452 | |
Subsequent to September 30, 2021, the Company entered into a collaborationlease agreement (the “Advaite Agreement”) with Advaite, Inc. (“Advaite”) with respectfor additional office space located in Malvern, Pennsylvania. See Note 14 for additional information.
7.Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities are as follows (in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| Research and development | $ | 1,100 | | | $ | 512 | |
| Clinical | 585 | | | 117 | |
| Professional fees | 610 | | | 405 | |
| Employee-related | 1,155 | | | 963 | |
| Severance-related (1) | 90 | | | 712 | |
| Other | 422 | | | 232 | |
| Total accrued expenses and other current liabilities | $ | 3,962 | | | $ | 2,941 | |
_______________________
(1) In June 2020, the Company communicated notice to the development of Advaite’s RapCov COVID-19 Testing Kit (the “COVID-19 Test”). Advaite was co-founded and is being managed by Mr. Karthik Musunuri, the son5 employees of the Company's Chief Executive Officer, Chairmantermination of their employment as a result of the Board and co-founder, Dr. Shankar Musunuri. Pursuant to the Advaite Agreement, the Company will provide certain production, research and development, technical, regulatory and quality support services to Advaite in connection with the development and
commercializationa product candidate. This reduction represented one-third of the COVID-19 Test (the “Ocugen Services”). Advaite will research, develop,Company’s workforce at the time of communication. All terminations were “without cause” and seekeach employee received termination benefits upon departure. The termination dates varied for each employee and ranged from June 30, 2020 to obtain regulatory approval of the COVID-19 Test, and where regulatory approval is obtained, commercialize the COVID-19 Test.
Advaite will solely own all data and materials, including the COVID-19 Test, generated by the Company and its representatives solely in the course of the performance of the Ocugen Services. Advaite is responsible for all preparation and submission of regulatory materials for the COVID-19 Test to regulatory authorities, and Advaite will hold all regulatory approvals of the COVID-19 Test in its name and own all related submissions.December 31, 2020.
The Company is entitled to receive cost reimbursements from Advaite, beginning asrecognized no severance-related charges and a de minimis amount of April 1, 2020, for (a) costs incurred by the Company related to its personnel who are subject matter experts involved in providing the Ocugen Services ("SME Costs") and (b) Advaite's pro-rata share of all costs (other than SME Costs) incurred by the Company in providing the Ocugen Services. As partial consideration for the Company's performance of the Ocugen Services, Advaite will pay to the Company a quarterly royalty in the range of mid to high single digits based on net sales of the COVID-19 Tests.
The Advaite Agreement expires on April 29, 2021, unless extended upon mutual agreement of both the Company and Advaite. Except as otherwise specified in the terms of the Advaite Agreement, Advaite’s obligation to make royalty payments to the Company will survive expiration of the Advaite Agreement.
The Advaite Agreement is considered to be within the scope of ASC 808 as the Advaite Agreement represents a joint operating activity and both Advaite and the Company are active participants and exposed to the risks and rewards. The Company has evaluated the Advaite Agreement and determined it is not within the scope of ASC 606 as Advaite does not meet the definition of a customer.
Cost reimbursements are recorded as a reduction in research and development expense in the period incurred. Royalty payments are recorded as collaboration revenue in the period in which the underlying sale occurs. Forseverance-related charges during the three and nine months ended September 30, 2020, the Company recorded $0.1 million and $0.3 million as a reduction of research and development expense,2021, respectively. For the three months ended September 30, 2020, the Company recorded no collaboration revenue in connection with the Advaite Agreement. For the nine months ended September 30, 2020, the Company recorded $42,620 as collaboration revenue in connection with the Advaite Agreement.
6.Accrued Expenses
Accrued Expenses are as follows:
| | | | | | | | | | | |
| September 30,
2020 | | December 31,
2019 |
| Accrued expenses: | | | |
| Research and development | $ | 177,802 | | | $ | 271,322 | |
| Clinical | 125,463 | | | 421,788 | |
| Professional fees | 396,914 | | | 917,568 | |
| Employee-related | 688,251 | | | 624,420 | |
| Severance-related (1) | 888,096 | | | 0 | |
| Other | 57,207 | | | 34,947 | |
| Total accrued expenses | $ | 2,333,733 | | | $ | 2,270,045 | |
_______________________
(1) See Note 7 for additional information regarding severance-related accrued expenses.
7.Exit and Disposal Activities
On June 15, 2020, the Company, as part of its recent shift in focus toward its gene therapy platform and novel biologics program aimed at curing blindness diseases, communicated notice to 5 employees of termination of their employment. This reduction represents one-third of the Company’s workforce. All terminations were “without cause” and each employee is
entitled to receive termination benefits upon departure. The termination dates vary for each employee and range from June 30, 2020 to December 31, 2020.
As a result of the workforce reduction, the Company recognized severance-related charges of $0.4 million and $1.1 million during the three and nine months ended September 30, 2020, respectively. The Company expects to pay severance benefits of $0.4 million during 2020 and $0.7 million during 2021. For the three months ended September 30, 2020, the Company recognized a de minimis amount of severance-related charges within general and administrative expense and $0.4 million of severance-related charges within research and development expense. For the nine months ended September 30, 2020, the Company recognized $0.2 million of severance-related charges within general and administrative expense and $0.9 million of severance-related charges within research and development expense.
The following table outlines the componentsCompany made severance payments of the severance-related charges:
| | | | | |
| Amount |
Accrued Severance at December 31, 2019 | $ | 0 | |
Severance-related charges | 1,093,255 | |
Severance-related payments | (205,159) | |
Accrued Severance at September 30, 2020 | $ | 888,096 | |
8.Equity Transactions
At-the-Market Offerings
During$0.1 million and $0.6 million during the three and nine months ended September 30, 2021, respectively. The Company made severance payments of $0.2 million during the three and nine months ended September 30, 2020. The Company expects to pay the remaining severance benefits of $0.1 million throughout the remainder of 2021.
8.Debt
The following table provides a summary of the carrying values for the components of debt as reflected on the condensed consolidated balance sheets (in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| PPP Note | $ | — | | | $ | 421 | |
| EB-5 Loan Agreement | 1,693 | | | 1,636 | |
| Total carrying value of debt, net | $ | 1,693 | | | $ | 2,057 | |
PPP Note
In April 2020, the Company soldwas granted a loan from Silicon Valley Bank ("SVB"), in the amount of $0.4 million, pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). Under the PPP, the loan was eligible for forgiveness to the extent the funds received were used for qualifying expenses as described by the CARES Act. The loan was in the form of a promissory note dated April 30, 2020 in favor of SVB (the "PPP Note"). The PPP Note had a maturity date of April 30, 2022 and bore interest at a rate of 1.0% per annum. The Company did not provide any collateral or guarantees for the loan, nor did the Company pay any facility charge to obtain the loan. The PPP Note provided for customary events of default, including, among others, failure to make payment, bankruptcy, breaches of representations, and material adverse events. In May 2021, the Company received notice from the Small Business Administration that the PPP Note was forgiven in its entirety, including both principal and accrued interest. The Company recognized a $0.4 million gain on loan extinguishment within other income (expense) for the forgiveness of the PPP Note within the condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2021.
EB-5 Loan Agreement
In September 2016, pursuant to the U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program (the “EB-5 Program”), the Company entered into an aggregatearrangement (the “EB-5 Loan Agreement”) to borrow up to $10.0 million from EB5 Life Sciences, L.P. (“EB-5 Life Sciences”) in $0.5 million increments. Borrowings may be limited by the amount of 27.0funds raised by EB-5 Life Sciences and are subject to certain job creation requirements by the Company. Borrowings are at a fixed interest rate of 4.0% per annum and are to be utilized in the clinical development, manufacturing, and commercialization of the Company’s product candidates and for the general working capital needs of the Company. Outstanding borrowings pursuant to the EB-5 Loan Agreement, including accrued interest, become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. The EB-5 Loan Agreement borrowings are secured by substantially all assets of the Company, except for any patents, patent applications, pending patents, patent licenses, patent sublicenses, trademarks, and other intellectual property rights.
Under the terms and conditions of the EB-5 Loan Agreement, the Company borrowed $1.0 million in 2016 and 86.2an additional $0.5 million in March 2020. Issuance costs were recognized as a reduction to the loan balance and are amortized to interest expense over the term of the loan.
The carrying values of the EB-5 Loan Agreement borrowings as of September 30, 2021 and December 31, 2020 are summarized below (in thousands):
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| Principal outstanding | $ | 1,500 | | | $ | 1,500 | |
| Plus: accrued interest | 226 | | | 181 | |
| Less: unamortized debt issuance costs | (33) | | | (45) | |
| Carrying value | $ | 1,693 | | | $ | 1,636 | |
9.Equity
COVAXIN Preferred Stock Purchase Agreement
On March 1, 2021, the Company entered into a preferred stock purchase agreement, pursuant to which the Company agreed to issue and sell 0.1 million shares of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (the “Series B Convertible Preferred Stock”), at a price per share equal to $109.60, to Bharat Biotech. On March 18, 2021, the Company issued the Series B Convertible Preferred Stock as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech pursuant to the Supply Agreement.
Each share of Series B Convertible Preferred Stock is convertible, at the option of Bharat Biotech, into 10 shares of the Company’s common stock (the "Conversion Ratio") only after (i) the Company received stockholder approval to increase the number of authorized shares of common stock respectively,under its Sixth Amended and Restated Certificate of Incorporation and (ii) the Company’s receipt of shipments by Bharat Biotech of the first 10.0 million doses of COVAXIN manufactured by Bharat Biotech pursuant to the Supply Agreement, and further on the terms and subject to the conditions set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the "Certificate of Designation"). In April 2021, the Company's stockholders approved an increase in the number of the Company's authorized shares of common stock from 200.0 million to 295.0 million. As of September 30, 2021, the conversion condition relating to the delivery of the first 10.0 million doses of COVAXIN had not been met. The conversion rate of the Series B Convertible Preferred Stock is subject to adjustment in the event of a stock dividend, stock split, reclassification, or similar event with respect to the Company’s common stock.
Bharat Biotech is entitled to receive dividends on the Series B Convertible Preferred Stock equal (on an as-converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock, when and if such dividends are paid. Except as provided by law and certain protective provisions set forth in the Certificate of Designation, the Series B Convertible Preferred Stock has no voting rights. Upon a liquidation or dissolution of the Company, holders of Series B Convertible Preferred Stock would be entitled to receive the same amount that a holder of common stock would receive if the Series B Convertible Preferred Stock were fully converted to common stock.
The Company accounted for the issuance of the Series B Convertible Preferred Stock in accordance with ASC 718 and recorded the fair value of $5.0 million within equity during the nine months ended September 30, 2021, with a corresponding short-term asset for the advanced payment for the doses of COVAXIN. The Company utilized the traded common stock price, adjusted by the Conversion Ratio, to value the Series B Convertible Preferred Stock and the Finnerty model to estimate a 15% discount rate for the lack of marketability of the instrument. The valuation incorporates Level 3 inputs in the fair value hierarchy, including the estimated time until the instrument's liquidity and the estimated volatility of the Company's common stock as of the grant date.
Registered Direct Offerings
On April 23, 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the "April 2021 Registered Direct Offering") an aggregate of 10.0 million shares of the Company's common stock at an offering price of $10.00 per share. The closing of the April 2021 Registered Direct Offering occurred on April 27, 2021 and the Company received net proceeds of $93.4 million after deducting equity issuance costs of $6.6 million.
On February 7, 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the "February 2021 Registered Direct Offering") an aggregate of 3.0 million shares of the Company's common stock at an offering price of $7.65 per share. The closing of the February 2021 Registered Direct Offering occurred on February 10, 2021 and the Company received net proceeds of $21.2 million after deducting equity issuance costs of $1.7 million.
At-the-Market Offerings
The Company commenced 3 separate at-the-market offerings (“ATMs”(each an "ATM", and collectively, the "ATMs") commenced in May 2020, June 2020, and August 2020. The Company sold 34.4 million shares under the May 2020 ATM, 24.8 million shares under the June 2020 ATM and 27.0 million shares under the August 2020 ATM. During the three months ended September 30, 2020, the Company received net proceeds of $10.1 million, after deducting commissions, fees and expenses of $0.4 million. During the nine months ended September 30, 2020, the Company received net proceeds of $25.6 million, after deducting commissions, fees and expenses of $1.1 million.
The offerings were made pursuant to the Company's effective "shelf" registration statement on Form S-3 filed with the SEC on March 27, 2020, the base prospectus contained therein dated May 5, 2020, and the prospectus supplements related to the offerings dated May 8, 2020, June 12, 2020, and August 17, 2020. As ofDuring the nine months ended September 30, 2020,2021, the Company had sold all of the shares of common stock available for issuance under the prospectus supplements filed on May 8, 2020 and June 12, 2020 in connection with the May 2020 and June 2020 ATMs. As of September 30, 2020, the Company had remaining capacity to issue up to $19.51.0 million of common stock under the prospectus supplement filed on August 17, 2020 in connection with the August 2020 ATM.
Subscription Agreements
On April 22, 2020, the Company entered into a subscription agreement with an accredited investor for the sale of 1,000 shares of the Company's common stock in a private placement forunder the August 2020 ATM and received net proceeds of $4.8 million after deducting equity issuance costs of $0.1 million. During the three and nine months
ended September 30, 2020, the Company sold an aggregate offering price of $395. This private placement constituted a Dilutive Issuance (as defined in Note 12)27.0 million and resulted in adjustments to86.2 million shares of the Series A Warrants.Company's common stock under the ATMs, respectively. During the three months ended September 30, 2020, the Company received net proceeds of $10.1 million after deducting equity issuance costs of $0.4 million. During the nine months ended September 30, 2020, the Company received net proceeds of $25.6 million after deducting equity issuance costs of $1.1 million.
OnSubscription Agreements
In June 6, 2020, the Company entered into a subscription agreement with an accredited investor for the issuance of 1.3 million shares of the Company's common stock in a private placement. The shares of common stock were issued as part of a transaction in settlement of an outstanding obligation of the Company to the accredited investor, in which (i) the Company agreed to make certain cash payments, (ii) the Company issued the 1.3 million shares of the Company's common stock in exchange for the accredited investor's agreement to cancel $0.3 million of the outstanding obligation, and (iii) the accredited investor agreed to cancel an additional portion of the amount owed by the Company representing a discount of $0.2 million.
OnIn April 5, 2019, OpCo2020, the Company entered into a subscription agreement with an accredited investor for the issuance of 1,000 shares of the Company's common stock in a private placement for an aggregate offering price of $395 (the "April 20192020 Subscription Agreement").
10.Warrants
Canada Warrants
On July 15, 2021, the Company entered into a consulting agreement with existing investors foran individual to provide services to the saleCompany with regard to the Company's Canadian operations (the "Canada Consulting Agreement"). Compensation under the Canada Consulting Agreement includes, among other forms of 0.1compensation, the issuance of warrants to purchase up to 0.2 million shares of the Company's common stock for $1.0 million. This capital raise triggered(the "Canada Warrants") and cash payments of up to $3.0 million upon the conversion featuresachievement of certain milestones related to COVAXIN. The Canada Consulting Agreement terminates on the convertible debt describedJuly 15, 2023, unless earlier terminated in Note 9 below.
9.Debtaccordance with its terms.
The following table providesCanada Warrants were issued on July 15, 2021 in a summaryprivate placement transaction. The warrantholder has the right to exercise the Canada Warrants to purchase up to 0.2 million shares of the carrying valuesCompany's common stock at an exercise price of $6.36 per share upon the achievement of certain milestones related to COVAXIN. The Canada Warrants terminate on July 15, 2031, unless earlier terminated in accordance with their terms. As of September 30, 2021, all of the Canada Warrants were outstanding and unvested. The Canada Warrants are accounted for in accordance with ASC 718.
SPA Warrants
In October 2019, the componentsCompany issued 3 series of debt as reflected onwarrants to purchase shares of the condensed consolidated balance sheets:
| | | | | | | | | | | |
| September 30,
2020 | | December 31,
2019 |
| PPP Note | $ | 421,415 | | | $ | 0 | |
| Warrant Exchange Promissory Notes | 1,116,997 | | | 0 | |
| EB-5 Loan Agreement borrowings | 1,616,629 | | | 1,072,123 | |
| Total carrying value of debt, net | $ | 3,155,041 | | | $ | 1,072,123 | |
PPP Note
OnCompany’s common stock (the “Series A Warrants,” the “Series B Warrants”, and the “Series C Warrants” and collectively, the “SPA Warrants”) under a securities purchase agreement with certain accredited investors. In April 30, 2020, the Company was grantedentered into the April 2020 Subscription Agreement, as discussed within Note 9, which represented a loan from Silicon Valley Bank ("SVB"),dilutive issuance as defined by the Series A Warrants and resulted in the aggregate amount of $0.4 million, pursuantadjustments to the Paycheck Protection Program (the “PPP”)number of issuable Series A Warrants and the exercise price of the Coronavirus Aid, ReliefSeries A Warrants. Immediately prior to the Company entering into the April 2020 Subscription Agreement, 8.8 million Series A Warrants, 1,000 Series B Warrants, and Economic Security Act1,000 Series C Warrants were outstanding.
Contemporaneously with the April 2020 Subscription Agreement, the Company and OpCo entered into Amendment and Exchange Agreements (each an "Exchange Agreement" and collectively, the "Exchange Agreements") with the accredited investors. Pursuant to the Exchange Agreements, the Company, OpCo, and the accredited investors agreed, among other things, after giving effect to the dilutive issuance, to amend the Series A Warrants to provide for an adjustment to the number of 2020 (the “CARES Act”). On June 5, 2020,common stock issuable upon the PPP Flexibility Act of 2020 (the "PPPFA") was signed into law amending the original termsexercise of the PPP. Among other things,Series A Warrants. Concurrently with such amendments, the PPPFA extendsaccredited investors exchanged the deferral periodSeries A Warrants for monthly principal and interest payments from six months to the time when the Small Business Administration (the "SBA") compensates the lender for amounts forgiven as well as extending the covered period for qualifying expenses from eight weeks to the earlier(i) an aggregate of 24 weeks or December 31, 2020. Certain amounts21.9 million shares of the loan may be forgiven if they are used for qualifying expenses as described by the CARES Act.
The loan was in the formCompany's common stock and (ii) promissory notes of a promissory note dated April 30, 2020 in favor of SVB (the "PPP Note"). The PPP Note matures on April 30, 2022 and bears interest at a rate of 1.0% per annum. Principal and interest payments are payable monthly commencing on the date the SBA compensates SVB for forgiven amounts or within 10 months following the expiration of the covered period if the Company has not applied for forgiveness. The Company did not provide any collateral or guarantees for the loan, nor did the Company pay any facility charge to obtain the loan. The PPP Note provides for customary events of default, including, among others, failure to make payment, bankruptcy, breaches of representations and material adverse events.
At September 30, 2020, the carrying value of the PPP Loan was $0.4 million.
Warrant Exchange Promissory Notes
On April 22, 2020, in connection with the Warrant Exchange as defined in Note 12, the Company issued to Investors certain promissory notes$5.6 million (the "Warrant Exchange Promissory Notes") and collectively with an aggregate principal amount of $5.6 million. The Warrant Exchange Promissory Notes have a maturity date of April 21, 2021 and do not bear interest. The Company may prepay the Warrant Exchange Promissory Notes in whole or in part at any time without penalty or premium. Incommon stock issued, the event that the Company consummates a financing transaction that generates cash to the Company, the Company is required to use 20% of the net proceeds of such transaction to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurs on or prior to August 22, 2020, and 30% of the net proceeds to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if that transaction occurs after August 22, 2020.
On April 22, 2020, the Warrant Exchange Promissory Notes were recorded at a fair value of $5.0 million. The difference of $0.6 million between the fair value and the aggregate principal amount of $5.6 million was recorded as a debt discount to be accreted to interest expense over the life of the Warrant Exchange Promissory Notes. The accretion amounted to $0.3 million and $0.5 million for the three and nine months ended September 30, 2020, respectively.
The Company is required to use a percentage of the net proceeds of the ATMs discussed in Note 8 to redeem the outstanding amount under the Warrant Exchange Promissory Notes."Warrant Exchange"). During the three and nine months ended September 30, 2020, the Company made payments to the Warrant Exchange Promissory NoteNotes holders of $3.2 million and $4.4 million, respectively. Subsequent to September 30,As of December 31, 2020, the Company made payments to the Warrant Exchange Promissory Note holders of $1.3 million, causing the Warrant Exchange Promissory Notes to behad been repaid in fullfull. Immediately following the consummation of the Warrant Exchange and the concurrent exercise of the remaining Series B Warrants and Series C Warrants, there were no longerSPA Warrants outstanding.
The Company accounted for the Warrant Exchange by recognizing the fair value of the consideration transferred in excess of the carrying valuesvalue of the Series A Warrants as a reduction of additional paid-in capital. The fair value of the Series A Warrants immediately prior to the Warrant Exchange was $1.1 million, which was estimated using a Black-Scholes valuation model utilizing Level 3 inputs. The fair value of the consideration transferred to settle the Series A Warrants was approximately $13.6 million, comprised of $8.6 million in shares of the Company's common stock and the fair value of the Warrant Exchange Promissory Notes at September 30, 2020 and December 31, 2019 are summarized below:
| | | | | | | | | | | | | | |
| | September 30,
2020 | | December 31,
2019 |
| Principal outstanding | | $ | 1,262,729 | | | $ | 0 | |
| Less: unamortized debt discount | | (145,732) | | | 0 | |
| Carrying value | | $ | 1,116,997 | | | $ | 0 | |
EB-5 Loan Agreement Borrowings
In September 2016, pursuantof $5.0 million. The fair value of consideration transferred to settle the U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program (the “EB-5 Program”), the Company entered into an arrangement (the “EB-5 Loan Agreement”) to borrow up to $10.0 million from EB5 Life Sciences, L.P. (“EB-5 Life Sciences”)Series A Warrants was in $0.5 million increments. Borrowing may be limited by the amount of funds raised by the EB-5 Life Sciences and are subject to certain job creation requirements by the Company. Borrowings are at a fixed interest rate of 4.0% per annum and are to be utilized in the clinical development, manufacturing, and commercializationexcess of the Company’s products and for the general working capital needsfair value of the Company. Outstanding borrowings pursuant to the EB-5 Program, including accrued interest, become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. The EB-5 Program borrowings are secured by substantially all assets of the Company, except for any patents, patent applications, pending patents, patent license, patent sublicense, trademarks, and other intellectual property rights.
Under the terms and conditions of the EB-5 Loan Agreement, the Company borrowed $1.0 million in 2016 and an additional $0.5 million on March 26, 2020. Issuance costs were recognized as a reduction to the loan balance and are amortized to interest expense over the term of the loan.
The carrying values of the EB-5 Loan Agreement borrowings as of September 30, 2020 and December 31, 2019 are summarized below:
| | | | | | | | | | | | | | |
| | September 30,
2020 | | December 31,
2019 |
| Principal outstanding | | $ | 1,500,000 | | | $ | 1,000,000 | |
| Plus: accrued interest | | 166,053 | | | 127,777 | |
| Less: unamortized debt issuance costs | | (49,424) | | | (55,654) | |
| Carrying value | | $ | 1,616,629 | | | $ | 1,072,123 | |
Senior Secured Convertible Notes
On May 21, 2019, the Company issued senior secured convertible notes to certain investors for $2.4 million at an original issue discount of $0.5 million, and on June 28, 2019, the Company entered into an agreement to issue additional senior secured convertible notes to the investors for $2.9 million with an original issue discount of $0.4 million (together the "Senior Secured Convertible Notes"). ImmediatelySeries A Warrants immediately prior to the Merger completed on September 27, 2019,Warrant Exchange by approximately $12.5 million. The excess consideration was accounted for as a deemed dividend to the Investors offset $5.3 million fromSeries A Warrant holders and was reflected as an additional net loss to common stockholders in the amount to be received undercalculation of basic and diluted net loss per common share for the Pre-Merger Financing and the Senior Secured Convertible Notes were deemed to have been repaid and cancelled. The accretion of the original issue discount to interest expense amounted to $0.7 million and $0.8 million during three and nine months ended September 30, 2019, respectively.2020.
Convertible Promissory NoteOpCo Warrants
On April 4, 2019,Beginning in 2016, OpCo issued warrants to purchase the Company issued a convertible promissory noteCompany's common stock (the "Convertible Promissory Note""OpCo Warrants") to an existing stockholder for $0.9 million at an interest rate of 5% per annum. On May 16, 2019, the Convertible Promissory Note was converted into equity. OpCo issued 0.1 million shares of common stock at the conversion date to extinguish the debt at $12.41 per share. This non-cash transaction resulted in an increase of $0.9 million in additional paid-in capital, which was based on the principal balance outstanding and the unpaid interest upon conversion.
Convertible Notes
During the years ended December 31, 2019 and 2018, the Company issued convertible notes (the “Convertible Notes”) to new and existing stockholders in the Company, including Convertible Notes in the aggregate principal amount of $3.5 million to members of the Board of Directors. As of December 31, 2019, all Notes had been converted and were 0 longer outstanding.
At issuance, the following amounts were recorded:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Note Issuance Date | | Convertible Note
Principal
Amount | | Fair Value of Embedded Derivatives | | Debt
Issuance
Costs | | Carrying
Value upon Issuance |
| January 2018 | | $ | 5,000,000 | | | $ | (2,657,711) | | | $ | (35,969) | | | $ | 2,306,320 | |
| June 2018 | | 1,000,000 | | | (724,216) | | | (3,000) | | | 272,784 | |
| November 2018 | | 1,150,400 | | | (21,127) | | | (50,646) | | | 1,078,627 | |
| December 2018 | | 150,000 | | | (2,857) | | | (14,310) | | | 132,833 | |
| January 2019 | | 450,000 | | | (182,882) | | | (29,358) | | | 237,760 | |
| February 2019 | | 1,000,000 | | | (302,379) | | | (55,875) | | | 641,746 | |
| Total | | $ | 8,750,400 | | | $ | (3,891,172) | | | $ | (189,158) | | | $ | 4,670,070 | |
All Convertible Notes accrued interest at a rate of 5% per annum and had scheduled maturity dates on the eighteen month anniversary of the date of the issuance of the Convertible Notes (the “Maturity Date”). If prior to the Maturity Date, there was a consummation of the sale of all or substantially all of the assetsinvestors of the Company change in control or event of default, the Convertible Notes would become duepursuant to a stockholders' agreement and payable at an amount equal to 1.5 times the principal amount of the Convertible Notes together with all accrued interest (the “Change in Control Feature”).
If the Company received equity financing from the issuance of stock2 employees of the Company from an investor or grouppursuant to their respective employment agreements. As of investors in a transaction or series of related transactions above a certain amount of gross proceeds, the principal amount and all interest accrued but not paid through the closing date of the qualified equity financing was to automatically convert into the same class of equity securities as those issued in the qualified equity financing ("Conversion Feature"). The price per share varied among the Convertible Notes ranging from a 0% to 30% discount to the lowest price per share being paid by investors in the qualified equity financing.
The Company bifurcated the Conversion Feature for the January 2018, June 2018, January 2019, and February 2019 Convertible Notes and classified it as a derivative liability because the conversion feature did not have a fixed conversion price and conversion would be settled in a variable number of shares of common stock. There was no bifurcated conversion feature for the November 2018September 30, 2021 and December 2018 Convertible Notes as there is no discount to the lowest equity price triggering conversion. The Company also bifurcated the Change in Control Feature for all31, 2020, 0.8 million and 0.9 million OpCo Warrants were outstanding, respectively. As of the Convertible Notes because it was determined to be a redemption feature not clearly and closely related to the debt host.
The fair value of both of the embedded features was accounted for as a derivative liability and was recorded as a discount on the Convertible Notes. Inputs used in valuation were unobservable and therefore considered Level 3 in the fair value hierarchy. The debt discount was accreted into interest expense over the expected time until conversion of the Convertible Notes. The accretion amounted to 0 and $0.5 million for the three and nine months ended September 30, 2019, respectively. There was 0 accretion during2021 the threeoutstanding OpCo Warrants had a weighted-average exercise price of $4.97. The outstanding OpCo Warrants expire between 2026 and nine months ended September 30, 2020 as all Convertible Notes had been converted and were 0 longer outstanding as of December 31, 2019.
The fair value of the embedded features was classified as a liability in the Company’s condensed consolidated balance sheets at issuance, with subsequent changes in fair value recorded on the Company’s condensed consolidated statements of operations and comprehensive loss as a change in fair value of derivative liabilities.
As a result of the April 2019 Subscription Agreement as described and defined within Note 8, the triggers for conversion were met on the Convertible Notes. On April 5, 2019, the Convertible Notes were modified to change the discount percentage from the 0% discount per the terms of the November 2018 and December 2018 Convertible Notes and the 15% discount per the terms of the January 2019 and February 2019 Convertible Notes to 30% at the time of conversion. The Company issued 1.1 million shares of common stock at $8.69 per share on the date of conversion to extinguish the debt, which resulted in a loss of $0.3 million. This non-cash conversion also resulted in an increase of $13.0 million in additional paid-in capital, which was based on the principal balance outstanding and the unpaid interest upon conversion.
Principal Maturities
Debt maturities (excluding interest) are summarized below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Twelve months ending September 30, |
| 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total |
| Principal Maturities | $ | 1,356,377 | | $ | 327,767 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 1,500,000 | | $ | 3,184,144 | |
10.11. Stock-basedStock-Based Compensation
Stock-based compensation expense for stock options grantedand RSUs is reflected in the condensed consolidated statements of operations and comprehensive loss as follows:follows (in thousands):
| | | Three months ended September 30, | | Nine months ended September 30, | | Three months ended September 30, | | Nine months ended September 30, |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2021 | | 2020 | | 2021 | | 2020 |
| General and administrative | General and administrative | $ | 100,903 | | | $ | 48,226 | | | $ | 248,942 | | | $ | 298,621 | | General and administrative | $ | 840 | | | $ | 101 | | | $ | 2,957 | | | $ | 248 | |
| Research and development | Research and development | 25,387 | | | 144,779 | | | 249,070 | | | 421,393 | | Research and development | 507 | | | 25 | | | 1,318 | | | 249 | |
| Total | Total | $ | 126,290 | | | $ | 193,005 | | | $ | 498,012 | | | $ | 720,014 | | Total | $ | 1,347 | | | $ | 126 | | | $ | 4,275 | | | $ | 497 | |
Stock-based compensation expense during the three and nine months ended September 30, 2021 included $41.3 thousand and $1.1 million of expense related to stock options with performance-based vesting conditions, respectively. NaN stock-based compensation expense during the three and nine months ended September 30, 2020 was related to stock options with performance-based vesting conditions.
As of September 30, 2020,2021, the Company had $1.3$13.9 million of unrecognized stock-based compensation expense related to stock options outstanding under its equity plans.and RSUs outstanding. This expense is expected to be recognized over a weighted averageweighted-average period of 2.2 years as of September 30, 2020.2021.
Equity Plans
The Company maintains 2 equity compensation plans, the 2014 Ocugen OpCo, Inc. Stock Option Plan (the “2014 Plan”) and the Ocugen, Inc. 2019 Equity Incentive Plan (the “2019 Plan”, collectively with the 2014 Plan, the "Plans"), which replaced the Histogenics Corporation 2013 Equity Incentive Plan (the "2013 Plan").
In 2019, Ocugen’s stockholders approved the adoption of the 2019 Plan and the 2013 Plan was frozen. No additional awards have been or will be made under the 2013 Plan and any remaining authorized shares under the 2013 Plan were recycled into the 2019 Plan. On the first business day of each fiscal year, pursuant to the "Evergreen" provision of the 2019 Plan, the aggregate number of shares that may be issued under the 2019 Plan will automatically increase by a number equal to the lesser of 4% of the total number of shares of Company common stock outstanding on December 31st of the prior year, or a number of shares of Company common stock determined by the Board.
As of September 30, 2020,2021, the 2014 Plan providesand 2019 Plan authorize for the granting of up to 0.8 million and 11.5 million equity awards in respect to Ocugen's common stock. As of September 30, 2020, the 2019 Plan provides for the granting of up to 4.2 million equity awards in respect of Ocugen'sCompany's common stock, inclusive of equity awards that were previously available for issuancerespectively. In addition to stock options and RSUs granted under the 2013 Plan andPlans, the additional shares authorized for issuance pursuant to the 2019 Plan's "Evergreen" provision on January 1, 2020.
As of September 30, 2020, an aggregate of 0.5 million and 3.8 million shares of Company common stock were issuable upon the exercise of outstandinghas granted certain stock options underand RSUs as material inducements to employment in accordance with Nasdaq Listing Rule 5635(c)(4), which were granted outside of the 2014 Plan and 2019 Plan, respectively.Plans.
Options to Purchase Common Stock
The following table summarizes the stock option activity underactivity:
| | | | | | | | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted-Average Exercise Price | | Weighted-Average Remaining Contractual Life (years) | | Aggregate Intrinsic Value (in thousands) |
| Options outstanding at December 31, 2020 | 4,224,433 | | | $ | 0.84 | | | 8.9 | | $ | 5,496 | |
| Granted | 7,469,300 | | | $ | 3.33 | | | | | $ | — | |
| Exercised | (901,250) | | | $ | 0.73 | | | | | $ | 8,042 | |
| Forfeited | (274,220) | | | $ | 2.96 | | | | | $ | 1,146 | |
| Options outstanding at September 30, 2021 | 10,518,263 | | | $ | 2.56 | | | 9.0 | | $ | 49,552 | |
| Options exercisable at September 30, 2021 | 991,429 | | | $ | 1.71 | | | 7.8 | | $ | 5,629 | |
Stock options not yet exercisable as of September 30, 2021 includes 1.5 million stock options with performance-based vesting conditions. There were no stock options with performance-based vesting conditions as of December 31, 2020. The weighted-average grant date fair values of stock options granted during the Plans:
| | | | | | | | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Life (Years) | | Aggregate Intrinsic Value |
| Options outstanding at December 31, 2019 | 731,189 | | | $ | 4.59 | | | 8.0 | | $ | 24,028 | |
| Granted | 4,064,950 | | | $ | 0.41 | | | | | |
| Forfeited | (527,862) | | | $ | 1.96 | | | | | |
| Options outstanding at September 30, 2020 | 4,268,277 | | | $ | 0.94 | | | 9.1 | | $ | 7,072 | |
| Options exercisable at September 30, 2020 | 450,405 | | | $ | 4.34 | | | 6.6 | | $ | 450 | |
three and nine months ended September 30, 2021 were $5.97 and $2.77, respectively. The weighted averageweighted-average grant date fair value of stock options granted during both the three and nine months ended September 30, 2020 was $0.34 per share. The total fair values of stock options vested during the three and nine months ended September 30, 2021 were $0.1 million and $0.7 million, respectively. The total fair values of stock options vested during the three and nine months ended September 30, 2020 were $0.1 million and $0.3 million, respectively.
RSUs
The following table summarizes the RSU activity:
| | | | | | | | | | | | | | | | | | | | | |
| Number of Shares | | Weighted-
Average
Grant-Date
Fair Value | | Aggregate Intrinsic Value (in thousands) | | | | |
| RSUs outstanding at December 31, 2020 | — | | | $ | — | | | $ | — | | | | | |
| Granted | 179,951 | | | $ | 6.69 | | | $ | 1,280 | | | | | |
| Forfeited | (900) | | | $ | 8.75 | | | $ | 6 | | | | | |
| RSUs outstanding at September 30, 2021 | 179,051 | | | $ | 6.68 | | | $ | 1,286 | | | | | |
12. Net Loss Per Share of Common Stock
The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 (in thousands, except share and per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
| Net loss — basic and diluted | $ | (10,755) | | | $ | (10,474) | | | $ | (43,784) | | | $ | (18,032) | |
| Deemed dividend related to Warrant Exchange | — | | | — | | | — | | | (12,546) | |
| Net loss to common stockholders | $ | (10,755) | | | $ | (10,474) | | | $ | (43,784) | | | $ | (30,578) | |
| Shares used in calculating net loss per common share — basic and diluted | 198,790,980 | | | 141,591,218 | | | 193,599,525 | | | 92,764,157 | |
| Net loss per common share — basic and diluted | $ | (0.05) | | | $ | (0.07) | | | $ | (0.23) | | | $ | (0.33) | |
The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding, as their inclusion would have been antidilutive:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
| Options to purchase common stock | 10,518,263 | | | 4,268,277 | | | 10,518,263 | | | 4,268,277 | |
| RSUs | 179,051 | | | — | | | 179,051 | | | — | |
| Warrants | 946,179 | | | 870,017 | | | 946,179 | | | 870,017 | |
| Series A Convertible Preferred Stock (as converted to common stock) | 3,115 | | | — | | | 3,115 | | | — | |
| Series B Convertible Preferred Stock (as converted to common stock) | 547,450 | | | — | | | 547,450 | | | — | |
| Total | 12,194,058 | | | 5,138,294 | | | 12,194,058 | | | 5,138,294 | |
11.13. Commitments and Contingencies
Operating LeasesCommitments
The Company has commitments under operating leases for certain facilities used in its operations. The Company’s leases have initial lease terms ranging from one to five years. Certainlicense agreements, lease agreements, contain provisionsdebt agreements, separation agreements, and consulting agreements. Commitments under certain license agreements primarily include annual payments, payments upon the achievement of certain milestones, and royalty payments based on net sales of licensed products. Commitments under the Company's licensing agreements are more fully described within Note 3 and within the Company's 2020 Annual Report. Commitments under lease agreements are future minimum lease payments for operating leases. See Note 6 and Note 14 for additional information about commitments under lease agreements. Commitments under debt agreements are the future rent increases.
The componentspayment of lease expense wereprincipal and accrued interest under the EB-5 Loan Agreement. See Note 8 for additional information about commitments under debt agreements. Commitments under separation agreements are severance payments to be paid throughout the remainder of 2021 as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2020 | | 2019 | | 2020 | | 2019 |
| Operating lease cost | $ | 47,696 | | | $ | 47,696 | | | $ | 142,947 | | | $ | 202,665 | |
| Variable lease cost | 21,169 | | | 21,284 | | | 62,415 | | | 58,163 | |
| Total lease cost | $ | 68,865 | | | $ | 68,980 | | | $ | 205,362 | | | $ | 260,828 | |
Supplemental balance sheeta result of the reduction in force in connection with the Company's discontinuation of a product candidate. See Note 7 for additional information about commitments under separation agreements. Commitments under consulting agreements include payments upon the achievement of certain milestones related to leasesCOVAXIN. See Note 10 for additional information about commitments under consulting agreements.
Contingencies
On June 17, 2021, a securities class action lawsuit was filed against the Company and certain of its officers and directors in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 2:21-cv-02725) that purported to state a claim for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, based on statements made by the Company concerning the announcement of the Company's decision to pursue the submission of a BLA for COVAXIN for ages 18 years and older rather than pursuing EUA for the vaccine candidate. On July 16, 2021, a second securities class action was filed against the Company and certain of its officers and directors in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 2:21-cv-03182) that also purported to state a claim for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, based on the same statements as follows:the first complaint. The complaints seek unspecified damages, interest, attorneys’ fees, and other costs.
| | | | | | | | | | | |
| September 30, 2020 | | December 31, 2019 |
| Right-of-use assets, net | $ | 217,508 | | | $ | 344,574 | |
| | | |
| Current lease obligations | $ | 164,808 | | | $ | 172,310 | |
| Non-current lease obligations | 42,746 | | | 163,198 | |
| Total lease liabilities | $ | 207,554 | | | $ | 335,508 | |
Supplemental information relatedOn August 30, 2021, a stockholder derivative lawsuit was filed derivatively on behalf of the Company against certain of its officers and directors and the nominal defendant Ocugen in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 2:21-cv-03876) that purported to leasesstate a claim for breach of fiduciary duty and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on facts and circumstances relating to the securities class action lawsuits and seeking contribution and indemnification in connection with claims asserted in the securities class action lawsuits. On September 22, 2021, a second stockholder derivative lawsuit was filed derivatively on behalf of the Company against certain of its officers and directors and the nominal defendant Ocugen in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 2:21-cv-04169) that purported to state a claim for breach of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on the same allegations as follows:
| | | | | | | | | | | |
| Nine months ended September 30, |
| 2020 | | 2019 |
| Weighted-average remaining lease terms—operating leases (years) | 1.4 | | 2.3 |
| Weighted-average discount rate—operating leases | 7.6 | % | | 7.6 | % |
Future minimum operating minimum lease payments for all leases, exclusiveThe Company believes that the lawsuits are without merit and intends to vigorously defend against them. At this time, no assessment can be made as to their likely outcome or whether the outcome will be material to the Company. No information is available to indicate that it is probable that a loss has been incurred and can be reasonably estimated as of taxes and other carrying charges, are approximately as follows:
| | | | | | | | |
| For the Years Ending December 31, | | Amount |
| Remainder of 2020 | | $ | 48,056 | |
| 2021 | | 160,909 | |
| 2022 | | 11,354 | |
| Total | | $ | 220,319 | |
| Less: present value adjustment | | (12,765) | |
| Present value of minimum lease payments | | $ | 207,554 | |
Financing Leases
In June 2018, the Company leased specialized research equipment under a lease classified as a financing lease. The leased equipment is included in property and equipment, net and is amortized on a straight-line basis over five years. Financing lease liabilities are included in other liabilities ondate of the Company's condensed consolidated balance sheets. The interest rate related tofinancial statements and, as such, no accrual for the lease obligation is 7.6% andloss has been recorded within the maturity date is July 2021.condensed consolidated financial statements.
14.Subsequent Events
Future minimum lease payments for all financing leases, exclusive of taxes and other carrying charges, are approximately as follows:
| | | | | | | | |
| For the Years Ending December 31, | | Amount |
| Remainder of 2020 | | $ | 5,964 | |
| 2021 | | 9,941 | |
| Total | | $ | 15,905 | |
| Less: present value adjustment | | (444) | |
| Present value of minimum lease payments | | $ | 15,461 | |
Subsequent to September 30, 2020,On October 15, 2021, the Company entered into a lease agreement for an expandedadditional office and laboratory space located in Malvern, Pennsylvania. See Note 13 for additional information.
12.Warrants
Pre-Merger Financing Warrants
On September 27, 2019, Ocugen completed the Merger with OpCo. Immediately prior to the Merger, Ocugen and OpCo completed the Pre-Merger Financing, a previously announced private placement transaction with certain Investors pursuant to the Financing SPA, whereby, among other things, the Company agreed to issue Series A Warrants, Series B Warrants, and Series C Warrants.
On November 5, 2019, the Company entered into an agreement with each Investor that amended the terms of each of the Pre-Merger Financing Warrants held by each such Investor (collectively, the “Warrant Amendments”). The terms of the Pre-Merger Financing Warrants and the Warrant Amendments are discussed below. There were no Pre-Merger Financing Warrants outstanding at September 30, 2020.
Series A Warrants
The Series A Warrants had an initial exercise price per share of $7.13, were exercisable upon issuance and had a term of 60 months from the date of issuance. The Series A Warrants were exercisable for up to 8.8 million shares of Ocugen common stock.
The Series A Warrants had an anti-dilution adjustment whereby if Ocugen issues or sells, enters into a definitive, binding agreement pursuant to which Ocugen is required to issue or sell or is deemed, pursuant to the provisions of the Series A Warrants, to have issued or sold, any common stock for a price per share lower than the exercise price then in effect (a “Dilutive Issuance”), subject to certain limited exceptions, then (i) the exercise price of the Series A Warrants shall be reduced
to such lower price per share and (ii) the number of shares issuable upon exercise of the Series A Warrants shall be increased to the number of shares of common stock determined by multiplying (a) the exercise price in effect immediately prior to such Dilutive Issuance by (b) the number of shares of common stock issuable upon exercise of the Series A Warrants immediately prior to such Dilutive Issuance (without giving effect to any limitation on exercise contained therein), and dividing the product thereof by the exercise price resulting from such Dilutive Issuance.
All of the Series A Warrants were outstanding and exercisable as of December 31, 2019. Pursuant to the Warrant Exchange (as defined below), no Series A Warrants were outstanding as of September 30, 2020.
Series B Warrants
The Series B Warrants had an exercise price of $0.01, were exercisable after the completion of a 10 trading-day period following the effectiveness of a registration statement covering the resale of common stock into which such warrants were exercisable and were to expire on the date on which the Series B Warrants have been exercised in full (without giving effect to any limitation on exercise contained therein) and no shares remain issuable thereunder. The Series B Warrants were initially exercisable by the holders for 8.0 million shares of common stock.
Additionally, each Series B Warrant included a Reset Period pursuant to which the number of shares issuable upon exercise of the Series B Warrants shall be increased during certain Reset Periods (as defined in the Series B Warrants). The Reset Period concluded in November 2019 and resulted in an aggregate of 12.6 million additional shares of common stock becoming issuable upon exercise of the Series B Warrants. There were 1,000 Series B Warrants outstanding at December 31, 2019. There were 0 Series B Warrants outstanding at September 30, 2020.
Series C Warrants
The Series C Warrants were exercisable upon issuance for up to 50.0 million shares of common stock at an initial exercise price of $7.13 per share. Each of the Series C Warrants was amended pursuant to the Warrant Amendments to permit the Investors, in lieu of making any cash payment otherwise contemplated to be made to the Company upon the exercise of the Series C Warrant, to elect instead to receive upon such exercise up to 20.0 million shares of common stock. Prior to the Warrant Amendments, the Series C Warrants had permitted the exercise without any cash payment of up to 50.0 million shares of common stock in the event that the volume weighted-average price of the common stock on Nasdaq was less than or equal to $1.20 per share on any five trading days following the issuance of the Series C Warrants. There were 1,000 Series C Warrants outstanding at December 31, 2019. There were 0 Series C Warrants outstanding at September 30, 2020.
Accounting for the Pre-Merger Financing Warrants
As of December 31, 2019, the Pre-Merger Financing Warrants were classified as equity. At issuance, the Series B Warrants were classified as a liability on the condensed consolidated balance sheet as they did not meet the derivative scope exception to be accounted for within stockholders' equity. The Series B Warrants were initially measured at fair value and marked to market each reporting period. Upon the completion of the Reset Period in November 2019, the Series B Warrants were reassessed and determined to meet the derivative scope exception allowing for equity classification. The Series B Warrants were marked to market a final time and the remaining liability balance was reclassified to equity.
The fair value of the Series B Warrants was calculated using a Monte Carlo simulation while estimating the stock price during the Reset Period, based on the terms described within the Financing SPA. Key fair value inputs included the starting stock price, expected stock volatility during the Reset Period, and additional shares issued from escrow. The methodology for measuring fair value was sensitive to the expected stock volatility assumption input mentioned above. The volatility used in the fair value estimate was 96.0% and 97.0% as of September 27, 2019 and September 30, 2019, respectively. Inputs used in the valuation were unobservable and were therefore classified as Level 3 fair value inputs. The fair value of the Series B Warrants upon the end of the Reset Period was based on a Black-Scholes valuation model, which is classified as Level 3 in the fair value hierarchy.
The following table provides a roll-forward of the Series B Warrant liability:
| | | | | |
| Amount |
Balance at January 1, 2019 | $ | 0 | |
Fair value at issuance - September 27, 2019 | 9,387,760 | |
Change in fair value of embedded derivatives | 18,577,226 | |
Balance at September 30, 2019 | 27,964,986 | |
Change in fair value of embedded derivatives | (16,709,246) | |
Amount reclassified to equity | (11,255,740) | |
Balance at December 31, 2019 | $ | 0 | |
Warrant Exchange
On April 22, 2020, the Company entered into a subscription agreement as discussed within Note 8. The subscription agreement constituted a Dilutive Issuance (as defined above) and resulted in adjustments to the number of issuable Series A Warrants and the exercise price under the Series A Warrants.
Contemporaneously with the subscription agreement, the Company and OpCo entered into Amendment and Exchange Agreements (each an "Exchange Agreement" and collectively, the "Exchange Agreements") with the Investors. Pursuant to the Exchange Agreements, the Company, OpCo and the Investors agreed, among other things, after giving effect to the Dilutive Issuance, to amend the Series A Warrants to provide for an adjustment to the number of common stock issuable upon the exercise of the Series A Warrants. Concurrently with such amendments, the Investors exchanged the Series A Warrants for (i) an aggregate of 21.9 million shares of common stock and (ii) the Warrant Exchange Promissory Notes as defined in Note 9 (collectively the "Warrant Exchange"). Following the consummation of the Warrant Exchange and the concurrent exercise of the remaining Series B Warrants and Series C Warrants, there were no Pre-Merger Financing Warrants outstanding at September 30, 2020.
The Company accounted for the Warrant Exchange by recognizing the fair value of the consideration transferred in excess of the carrying value of the Series A Warrants as a reduction of additional paid-in capital. The fair value of the consideration transferred to settle the Series A Warrants was approximately $13.6 million, comprised of $8.6 million in shares of common stock and the fair value of the Warrant Exchange Promissory Notes of $5.0 million. The fair value of consideration transferred to settle the Series A warrants was in excess of the fair value of the Series A Warrants immediately prior to the transaction by approximately $12.5 million. The excess consideration was accounted for as a deemed dividend to the warrant holders and is reflected as an additional net loss attributed to common stockholders in the calculation of basic and diluted net loss per common share for the nine months ended September 30, 2020. The fair value of the Series A Warrants immediately prior to the Warrant Exchange was $1.1 million, which was estimated using a Black-Scholes valuation model utilizing Level 3 inputs.
OpCo Warrants
Prior to 2018, OpCo issued warrants to investors of the Company pursuant to a stockholders' agreement and to 2 employees of the Company pursuant to their respective employment agreements. As of September 30, 2020 and December 31, 2019, 0.9 million warrants to purchase common stock were outstanding and exercisable and had a weighted average exercise price of $5.67 per share. The warrants expire between 2025 and 2027.
13.Subsequent Events
On October 9, 2020, the Company entered into a lease agreement (the "Lease Agreement") with WPT Land 2 LP (the "Landlord") for an expanded office and laboratory space located in Malvern, Pennsylvania. The Lease Agreementlease has an expected commencement date in early 20212022 and has an initial term of seven years. The aggregate estimated base rent payments due over the initial seven year term of the Lease Agreement is $1.8are $3.8 million. In addition,Additionally, the Company will pay its pro rata share ofbe responsible for the Landlord's annual operating expenses and utilities associated with the leased premises. The Company has the option to extend the Lease Agreement for 1 additional five year term. The Company has an existing lease agreement with the Landlord for the Company's current office space. Provided that2 additional five year terms, provided the Company is not under an event of default and surrenders the current office space pursuant to the terms of the Lease Agreement and in the condition required by the existing lease agreement, the existing lease agreement will be deemed terminated without penalty to the Company.agreement.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements for the year ended December 31, 2019,2020, included in our 20192020 Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. WeExcept as required by law, we undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the “Risk Factors” section included in our 20192020 Annual Report and the "Risk Factors" and “Disclosure Regarding Forward-Looking Statements” sections of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a biopharmaceutical company focused on discovering, developing and commercializing transformativegene therapies to cure blindness diseases.diseases and developing a vaccine to save lives from COVID-19.
Our cutting-edge technology pipeline includes:
•COVID-19 Vaccine — COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate being developed to prevent COVID-19 infection in humans. We are co-developing COVAXIN with Bharat Biotech for the U.S. and Canadian markets.
•Modifier Gene Therapy Platform—Based on NHRs, we believe our gene therapy platform has the potential to address many retinal diseases, including RP, with one product.LCA, and dry AMD.
•Novel Biologic Therapy for Retinal Diseases—We are developing OCU200, which is being developeda novel biologic product candidate, to treat DME, DR, and wet AMD.
COVID-19 Vaccine
In February 2021, we entered into the Covaxin Agreement with Bharat Biotech, pursuant to which we obtained an exclusive right and license under certain of Bharat Biotech's intellectual property rights, with the right to grant sublicenses to develop, manufacture, and commercialize COVAXIN for the prevention of COVID-19 in humans in the United States, its territories, and possessions. The Covaxin Agreement was subsequently amended in June 2021 by which we and Bharat Biotech agreed to expand our rights to develop, manufacture, and commercialize COVAXIN to include Canada in addition to the United States, its territories, and possessions.
COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate and is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. COVAXIN requires a two-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). COVAXIN has been authorized for emergency use in India for ages 18 years and older and the Subject Expert Committee has recommended the Drugs Controller General of India authorize COVAXIN for emergency use in India for children ages two years and older. In November 2021, COVAXIN was awarded an EUL by the WHO. Over 98.0 million doses of COVAXIN globally have been administered to date.
In July 2021, we announced that COVAXIN demonstrated an overall vaccine efficacy against COVID-19 disease of 77.8%, with efficacy against severe COVID-19 disease of 93.4%, and efficacy against asymptomatic COVID-19 disease of 63.6% in the Phase 3 clinical trial conducted by Bharat Biotech in India. The aforementioned efficacy results represent point estimates of vaccine efficacy with a 95% confidence interval of 65.2% to 86.4% against COVID-19 disease, 57.1% to 99.8% against severe COVID-19 disease, and 29.0% to 82.4% against asymptomatic COVID-19 disease. The Phase 3 clinical trial enrolled 25,798 participants over the age of 18 in India, including 10.7% of participants over the age of 60 and 27.5% of participants with at least one pre-existing condition. Adverse events in the COVAXIN and control arms of the Phase 3 clinical trial were observed in 12.4% of subjects, with less than 0.5% of subjects experiencing serious adverse side effects. The majority of the symptomatic cases identified in aggregate in the COVAXIN and control arms in the Phase 3 clinical trial were COVID-19 variants, the majority of which were identified to be the Delta variant, B.1.617.2. Subjects vaccinated with COVAXIN in the Phase 3 clinical trial showed protection against the Delta variant, B.1.617.2, showing a vaccine efficacy of 65.2%, which represents a point estimate of vaccine efficacy with a 95% confidence interval of 33.1% to 83.0%. Additionally, in in-vitro studies conducted by
the ICMR — National Institute of Virology, COVAXIN demonstrated potential effectiveness against the Zeta variant, B.1.1.28.2, the Alpha variant, B.1.1.7, and the Beta variant, B.1.351.
In June 2021, the FDA provided feedback to us regarding the data and information contained in the "Master File" that was previously submitted to the FDA and recommended that we pursue a BLA submission instead of an EUA application for COVAXIN for ages 18 years and older in the United States. As part of the feedback provided by the FDA regarding the "Master File," the FDA also requested additional information and data. We have continued discussions with the FDA regarding the appropriate regulatory pathway for COVAXIN for ages 18 years and older in the United States as well as the data requirements for COVAXIN under a BLA submission. In October 2021, we filed an IND application with the FDA to initiate a Phase 3 immuno-bridging study evaluating COVAXIN for ages 18 years and older. We will also initiate a safety-bridging study under the IND, if required by the FDA, to support a BLA submission. We anticipate filing a BLA submission with the FDA by the end of 2022.
In November 2021, we submitted a request to the FDA for EUA for COVAXIN for pediatric use in children ages two to 18 years in the United States. The EUA submission was based on the results of a Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India.
We are pursuing approval for COVAXIN in Canada. In July 2021, we announced that we had completed our rolling submission to Health Canada for COVAXIN. The rolling submission process, which permits companies to submit safety and efficacy data and information as they become available, was recommended and accepted under the Interim Order and transitioned to an NDS for COVID-19. The submission was conducted through our Canadian affiliate, Vaccigen. The Interim Order expired on September 16, 2021. The expiration of the Interim Order has not impacted our NDS.
We are evaluating our commercialization strategy for COVAXIN in the United States and Canada, if authorized or approved in either jurisdiction. In June 2021, we selected Jubilant HollisterStier as our manufacturing partner for COVAXIN to prepare for the potential commercial manufacturing for the Ocugen Covaxin Territory. We expect to enter into a master services agreement with Jubilant HollisterStier for the manufacture of COVAXIN and the technology transfer process to Jubilant HollisterStier has been initiated.
In September 2021, we entered into the Supply Agreement with Bharat Biotech, pursuant to which Bharat Biotech will supply us with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the completion of our technology transfer to Jubilant HollisterStier. Following the completion of our technology transfer to Jubilant HollisterStier, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval.
Modifier Gene Therapy Platform
We are developing a breakthrough modifier gene therapy platform to generate therapies designed to fulfill unmet medical needs in the area of retinal diseases, including IRDs and dry AMD. Our modifier gene therapy platform is based on NHRs, which have the potential to restore homeostasis, the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our gene therapy platform, through its use of NHRs, represents a novel approach in that it may address multiple retinal diseases with one product. IRDs such as RP, a group of rare genetic disorders that involvesinvolve a breakdown and loss of cells in the retina and can lead to visual impairment and blindness, affect over 1.52.0 million people worldwide. Over 150 gene mutations have been associated with RP and this number represents only 60% of the RP population. The remaining 40% of RP patients cannot be genetically diagnosed, making it difficult to develop individual treatments.
We believe that OCU400, our first product candidate being developed with our modifier gene therapy candidate,platform, has the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including RP and LCA. For example, we believe OCU400 has the potential to eliminate the need for developing more than 150 individual products and provide one treatment option for all RP patients.
OCU400 has received four ODDs from the FDA for the treatment of certain disease genotypes: NR2E3, CEP290, RHO, and PDE6BPDE6ß mutation-associated RP.inherited retinal degenerations. In November 2021, we filed an IND application with the FDA for OCU400 for the treatment of the NR2E3 and RHO disease genotypes. We are planning to initiate twoa Phase 1/2a2 clinical trial for OCU400 for the treatment of the NR2E3 and RHO disease genotypes in the United States near the end of 2021. OCU400 additionally has received OMPD from the EC, based on the recommendation of the EMA, for RP and LCA, which we believe further supports the potential broad spectrum application of OCU400 to treat many IRDs. We are currently evaluating options to commence OCU400 clinical trials for OCU400 in the second half of 2021.Europe in 2022. Our second gene therapy candidate, OCU410, is being developed to utilize the nuclear receptor genes RORA for the treatment of dry AMD. This candidate is currently in preclinical development. We are planningcurrently executing IND-enabling preclinical studies to initiatesupport a Phase 1/2a2 clinical trialtrial. In 2019, we entered
into the CanSinoBIO Agreement with respect to the development and commercialization of OCU400, which was subsequently amended in September 2021, pursuant to which OCU410 was added to our existing collaboration with CanSinoBIO. CanSinoBIO will be responsible for the CMC development and manufacture of clinical supplies for OCU400 and OCU410 in 2022.and will be responsible for the costs associated with such activities.
We are also conducting preclinical developmentNovel Biologic Therapy for ourRetinal Diseases
Our biologic product candidate, OCU200. OCU200, is a novel fusion protein designedbeing developed to treat DME, DR, and wet AMD. We plan to expand the therapeutic applications of OCU200 beyond DME, DR and wet AMD to potentially include macular edema following retinal vein occlusion and myopic choroidal neovascularization. We expect to initiateare currently executing IND-enabling preclinical studies for OCU200 in 2021 andto support a Phase 1/2a1 clinical trialtrial. We have completed the technology transfer of manufacturing processes to our CDMO that will manufacture OCU200 clinical supplies.
Product Candidate for OCU200 in the first halfTreatment of 2022. In October 2020, we entered into an agreement with Kemwell Biopharma Pvt. Ltd. ("Kemwell") to manufacture OCU200. Under this agreement, Kemwell will manage all chemistry, manufacturing and control and clinical manufacturing activities as well as provide supplies for IND-enabling preclinical studies and our planned Phase 1/2a clinical trials.Ocular Graft-Versus-Host Disease
We were developing OCU300, a small molecule therapeutic for the treatment of symptoms associated with oGVHD. On June 1, 2020, we announced that we had discontinued theocular graft-versus-host disease. The Phase 3 clinical trial offor OCU300 was discontinued in 2020 based on the results of a pre-planned interim sample size analysis conducted by an independent Data Monitoring Committee, which indicated the trial was unlikely to meet its co-primary endpoints upon completion.
Impact of COVID-19 on our Business
The trial wasCOVID-19 pandemic is continually evolving and we are closely monitoring the situation. Impacts from the COVID-19 pandemic remain highly uncertain and subject to change and, as such, we cannot predict the specific duration or impact that the COVID-19 pandemic may have on our operations including our preclinical activities, future clinical trials, and potential commercialization. The extent to which the COVID-19 pandemic may impact our operations is dependent on future developments, including but not stopped basedlimited to: (i) the duration of the spread of the SARS-CoV-2 virus, including the spread of variants, (ii) the future actions taken by governmental authorities and regulators with respect to the COVID-19 pandemic, and (iii) the impact on safety concerns.our partners, collaborators, and suppliers. We are no longer pursuingwill continue to monitor the development of this product candidate.situation closely as these effects could have a material impact on our operations.
We were previously developing OCU310 for patients with dry eye disease. We completed a Phase 3 clinical trial for OCU310 that was initiated in September 2018. Although the trial showed that OCU310 is safe and well-tolerated, it did not meet its co-primary endpoints for symptom and sign. We are no longer pursuing the development of this product candidate.Financial Operations Overview
We have no products approved for commercial sale and have not generated anysignificant revenue from product sales.to date. We have never been profitable and have incurred operatingnet losses in each year since inception. We incurred net losses of approximately $18.0$43.8 million and $32.6$18.0 million for the nine months ended September 30, 20202021 and 2019,2020, respectively. As of September 30, 2020,2021, we had an accumulated deficit of $69.5$117.1 million and a cash, cash equivalents, and restricted cash balance of $19.3$107.5 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
To date, we have viewed our operations and manage our business as one operating segment. As of September 30, 2020, all of our assets were located in the United States. Our headquarters and operations are located in Malvern, Pennsylvania.
Financial Operations Overview
Collaboration revenue
Collaboration revenue consists of royalty payments received in connection with agreements accounted for as collaborative arrangements under ASC 808. The Company assesses whether royalty payments from collaboration partners represent consideration from a customer. If the collaboration partner is considered a customer, the Company accounts for those payments within the scope of ASC 606. However, when the Company concludes that its collaboration partner is not a customer, the Company will record royalty payments received as collaboration revenue in the period in which the underlying sale occurs. See Note 5 to our condensed consolidated financial statements included in this report for additional information.
Research and development expense
Research and development costs are expensed as incurred. These costs consist of internal and external expenses.expenses, as well as depreciation on assets used within our research and development activities. Internal expenses include the cost of salaries, benefits, severance, and other related costs, including stock-based compensation, for personnel serving in our research and development functions, as well as allocated rent and utilities expenses. External expenses include development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. License fees paid to acquire access to proprietary technology are expensed to research and development unless it is determined that the technology is expected to have an alternative future use. All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred to research and development expense due to the uncertainty about the recovery of the expenditure. We record costs for certain development activities, such as preclinical studies and clinical trials, based on our evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to us by our vendors on their actual costs incurred.tasks. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued research and development expense, as applicable. Our recording of costs for certain development activities requires us to use estimates. We believe our estimates and assumptions are reasonable under the casecurrent conditions; however, actual results may be.differ from these estimates.
Research and development expenses account for a significant portion of our operating expenses. We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidates. We anticipate that our research and development expenses excluding charges to in-process researchwill be higher in 2021 and development expense, will increase modestlysubsequent periods as compared to prior periods as we evaluate the regulatory and commercialization path for COVAXIN in the United States and Canada as well as conduct preclinical and clinical activities in preparation for Phase 1/2a trials with respect to OCU400, OCU410,our product candidates.
Our research and OCU200 thatdevelopment expenses are not currently tracked on a program-by-program basis for indirect and overhead costs. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying, developing, and commercializing product candidates.
At this time, due to the inherently unpredictable nature of preclinical and clinical developments as well as regulatory approval (or authorization) and commercialization, we planare unable to commenceestimate with any certainty the costs we will incur and the timelines we will require in 2021our continued development and 2022.commercialization efforts. As a result of these uncertainties, successful development and completion of clinical trials as well as regulatory approval (or authorization) and commercialization are uncertain and may not result in approved (or authorized) and commercialized products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We will continue to make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to our ability to enter into collaborations with respect to each product candidate, the scientific and clinical success of each product candidate as well as ongoing assessments as to the commercial potential of each product candidate.
General and administrative expense
General and administrative expense consists primarily of personnel expenses, including salaries, benefits, severance, insurance, and stock-based compensation expense, for employees in executive, accounting, commercialization, human resources, and other administrative functions. General and administrative expense also includes corporate facility costs, including allocated rent and utilities, insurance premiums, legal fees related to corporate matters, and fees for auditing, accounting, and other consulting services.
We anticipate that our general and administrative expenses will increasebe higher in 2021 as compared to prior periods as a result of higher corporate infrastructure costs including, but not limited to, accounting, legal, human resources, consulting, and investor relations, fees,and public company insurance fees. Additionally, we anticipate an increase in general and administrative expenses as well as increased director and officer insurance premiums, associated with operating as a public company.
COVAXIN, if authorized or approved. Severance-related expense
In June 2020, we communicated notice to five employees of the termination of their employment.employment as a result of the discontinuation of a product candidate. This reduction representsrepresented one-third of our workforce.workforce at the time of communication. All terminations were “without cause” and each employee is entitled to receivereceived termination benefits upon departure. The termination dates varyvaried for each employee and rangeranged from June 30, 2020 to December 31, 2020.
As a result of the workforce reduction, we recognized severance-related chargesexpect to pay severance benefits of $0.4$0.1 million throughout the remainder of 2021. We made severance payments of $0.1 million and $1.1$0.6 million during the three and nine months ended September 30, 2020,2021, respectively. We expect to paymade severance benefitspayments of $0.4$0.2 million during 2020 and $0.7 million during 2021. For the three months ended September 30, 2020, we recognized a de minimis amount of severance-related charges within general and administrative expense and $0.4 million of severance-related charges within research and development expense. For the nine months ended September 30, 2020, we recognized $0.2 million of severance-related charges within general and administrative expense and $0.9 million of severance-related charges within research and development expense. We expect that the workforce reduction will result in approximately $2.0 million in annualized cost savings commencing in 2021.
Change in fair value of derivative liabilities
Change in fair value of derivative liabilities includes the change in fair value each reporting period of (a) the conversion and change in control features embedded in certain convertible notes, which were required to be bifurcated and recognized at fair value, and (b) the change in the fair value of the Company's Series B Warrants.
Interest expense
Interest expense primarily includes debt coupon interest, the amortization of debt issuance costs, and the accretion of debt discounts.2020.
Critical Accounting Policies and Significant Judgments and Estimates
The preparation of financial statements in conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our condensed consolidated financial statements. Actual results could differ from those estimates. There were no material changes to our critical accounting policies and estimates as reported in our 20192020 Annual Report.
Results of Operations
Comparison of the Three Months Ended September 30, 20202021 and 20192020
The following table summarizes the results of Ocugen’sour operations for the three months ended September 30, 2021 and 2020 and 2019:(in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | |
| (in thousands) | | 2020 | | 2019 | | Change |
| | | | | | |
| | | | | | |
| | | | | | |
| Operating expenses: | | | | | | |
| Research and development | | $ | 1,477 | | | $ | 1,306 | | | $ | 171 | |
| In-process research and development | | 7,000 | | | — | | | 7,000 | |
| General and administrative | | 1,705 | | | 1,408 | | | 297 | |
| Total operating expenses | | 10,182 | | | 2,714 | | | 7,468 | |
| Loss from operations | | (10,182) | | | (2,714) | | | (7,468) | |
| Other income (expense): | | | | | | |
| Change in fair value of derivative liability | | — | | | (18,512) | | | 18,512 | |
| | | | | | |
| | | | | | |
| Interest expense | | (292) | | | (796) | | | 504 | |
| Other income (expense) | | — | | | (751) | | | 751 | |
| Total other income (expense) | | (292) | | | (20,059) | | | 19,767 | |
| Net loss | | $ | (10,474) | | | $ | (22,773) | | | $ | 12,299 | |
| | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | |
| 2021 | | 2020 | | Change |
| | | | | |
| | | | | |
| | | | | |
| Operating expenses | | | | | |
| Research and development | $ | 6,281 | | | $ | 1,478 | | | $ | 4,803 | |
| In-process research and development | — | | | 7,000 | | | (7,000) | |
| General and administrative | 4,508 | | | 1,704 | | | 2,804 | |
| Total operating expenses | 10,789 | | | 10,182 | | | 607 | |
| Loss from operations | (10,789) | | | (10,182) | | | (607) | |
| Other income (expense) | | | | | |
| Interest income | 5 | | | — | | | 5 | |
| Interest expense | (19) | | | (292) | | | 273 | |
| Other income (expense) | (4) | | | — | | | (4) | |
| Total other income (expense) | (18) | | | (292) | | | 274 | |
| Loss before income taxes | (10,807) | | | (10,474) | | | (333) | |
| Income tax benefit | (52) | | | — | | | (52) | |
| Net loss | $ | (10,755) | | | $ | (10,474) | | | $ | (281) | |
Research and development expense
Research and development expense increased by $0.2$4.8 million for the three months ended September 30, 20202021 compared to the three months ended September 30, 20192020. The increase was primarily as a resultdue to increases of an increase of $0.4$1.6 million in severance-related charges related to the employee terminations announcedCOVAXIN development and regulatory activities, $1.4 million in June 2020, partially offset by a decrease of $0.2OCU400 preclinical and clinical activities, $1.1 million in employee-related expenses.expenses, and $0.5 million in stock-based compensation expense.
In-process research and development
In-process research and development expense
In-process research and development expense increased decreased by $7.0 million for the three months ended September 30, 20202021 compared to the three months ended September 30, 2019 as a result2020. The decrease was due to the write-off of the NeoCart®an intangible asset which ceased to meet the criteria to be classified as held for sale during the three months ended September 30, 2020.2020 as a sale of the intangible asset was deemed not probable to be completed within one year from the date the intangible asset was initially recorded as held for sale.
General and administrative expense
General and administrative expense increased by $2.8 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. The increase was primarily due to increases of $0.8 million in employee-related expenses, increased$0.7 million in stock-based compensation expense, and $0.7 million in professional fees.
Interest expense
Interest expense decreased by $0.3 million for the three months ended September 30, 20202021 compared to the three months ended September 30, 2019 primarily as a result of increases of $0.3 million in insurance premiums, $0.2 million in employee-related expenses, and $0.1 million in consulting fees, partially offset by a decrease of $0.3 million in professional fees.
Change in fair value of derivative liability
The change in fair value of derivative liability was zero for the three months ended September 30, 2020 compared to a loss of $18.5 million primarily due to the remeasurement of the Series B Warrant liability2020. Interest expense during the three months ended September 30, 2019.
Interest expense
2021 primarily includes debt coupon interest and amortization of debt issuance costs. Interest expense was $0.3 million for the three months ended September 30, 2020 and $0.8 million for the three months ended September 30, 2019. The decrease in interest expense was primarily due to the conversions of all previously issued convertible debt during 2019. Interest expense for the three months ended September 30, 2020 primarily relatesrelated to the accretion of the debt discount on the Warrant Exchange Promissory Notes.
Comparison of the Nine Months Ended September 30, 2021 and 2020
The following table summarizes the results of our operations for the nine months ended September 30, 2021 and 2020 (in thousands):
| | | | | | | | | | | | | | | | | |
| Nine months ended September 30, | | |
| 2021 | | 2020 | | Change |
| Revenues | | | | | |
| Collaboration revenue | $ | — | | | $ | 43 | | | $ | (43) | |
| Total revenues | — | | | 43 | | | (43) | |
| Operating expenses | | | | | |
| Research and development | 28,006 | | | 4,760 | | | 23,246 | |
| In-process research and development | — | | | 7,000 | | | (7,000) | |
| General and administrative | 15,450 | | | 5,760 | | | 9,690 | |
| Total operating expenses | 43,456 | | | 17,520 | | | 25,936 | |
| Loss from operations | (43,456) | | | (17,477) | | | (25,979) | |
| Other income (expense) | | | | | |
| Interest income | 15 | | | — | | | 15 | |
| Interest expense | (59) | | | (555) | | | 496 | |
| Other income (expense) | (336) | | | — | | | (336) | |
| Total other income (expense) | (380) | | | (555) | | | 175 | |
| Loss before income taxes | (43,836) | | | (18,032) | | | (25,804) | |
| Income tax benefit | (52) | | | — | | | (52) | |
| Net loss | $ | (43,784) | | | $ | (18,032) | | | $ | (25,752) | |
Research and development expense
Research and development expense increased by $23.2 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase was primarily due to the $15.0 million upfront payment to Bharat Biotech in connection with the amendment to the Covaxin Agreement to add rights to the Canadian market in June 2021 as well as increases of $2.9 million in OCU400 preclinical and clinical activities, $2.5 million in COVAXIN development and regulatory activities, $1.4 million in employee-related expenses, $1.1 million in stock-based compensation expense, and $1.0 million in OCU200 preclinical activities. The increases were partially offset by a $1.1 million decrease for the discontinuation of OCU300 clinical trial activities in 2020.
In-process research and development
In-process research and development expense decreased by $7.0 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The decrease was due to the write-off of an intangible asset held for sale during the nine months ended September 30, 2020 as a sale of the intangible asset was deemed not probable to be completed within one year from the date the intangible asset was initially recorded as held for sale.
General and administrative expense
General and administrative expense increased by $9.7 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase was primarily due to increases of $3.1 million in expenses for stockholder meetings and proxy solicitation, $2.7 million in stock-based compensation expense, $1.5 million in professional fees, and $1.3 million in employee-related expenses.
Interest expense
Interest expense decreased by $0.5 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Interest expense during the nine months ended September 30, 2021 primarily includes debt coupon interest
and amortization of debt issuance costs. Interest expense during the nine months ended September 30, 2020 primarily related to the accretion of the debt discount on the Warrant Exchange Promissory Notes.
Other income (expense)
Other income (expense) was zero for the three months ended September 30, 2020 and $0.8 million for the three months ended September 30, 2019. The decrease in other expense was primarily due to equity issuance costs related to the Series B Warrants which were expensed during the three months ended September 30, 2019 since the Series B Warrants were liability-classified.
Comparison of the Nine Months Ended September 30, 2020 and 2019
The following table summarizes the results of Ocugen's operations for the nine months ended September 30, 2020 and 2019:
| | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | |
| (in thousands) | | 2020 | | 2019 | | Change |
| Revenues: | | | | | | |
| Collaboration revenue | | $ | 43 | | | $ | — | | | $ | 43 | |
| Total revenues | | 43 | | | — | | | 43 | |
| Operating expenses: | | | | | | |
| Research and development | | 4,760 | | | 6,338 | | | (1,578) | |
| In-process research and development | | 7,000 | | | — | | | 7,000 | |
| General and administrative | | 5,760 | | | 3,545 | | | 2,215 | |
| Total operating expenses | | 17,520 | | | 9,883 | | | 7,637 | |
| Loss from operations | | (17,477) | | | (9,883) | | | (7,594) | |
| Other income (expense): | | | | | | |
| Change in fair value of derivative liability | | — | | | (19,897) | | | 19,897 | |
| Loss on debt conversion | | — | | | (341) | | | 341 | |
| | | | | | |
| Interest expense | | (555) | | | (1,753) | | | 1,198 | |
| Other income (expense) | | — | | | (751) | | | 751 | |
| Total other income (expense) | | (555) | | | (22,742) | | | 22,187 | |
| Net loss | | $ | (18,032) | | | $ | (32,625) | | | $ | 14,593 | |
Collaboration revenue
Collaboration revenue increased by $42,620 for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 as a result of collaboration revenue generated from Advaite Agreement, which commenced in April 2020. We did not have any collaboration revenue in 2019.
Research and development expense
Research and development expense decreased by $1.6 million for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 primarily as a result of a decrease of $2.5 million related to the discontinuation of OCU310 clinical trial activities in the first quarter of 2019 and $0.2 million in employee-related expenses, partially offset by an increase of $0.9 million in severance-related charges related to the employee terminations announced in June 2020 and $0.6 million related to OCU300 clinical trial activities conducted in 2020.
In-process research and development expense
In-process research and development expense increased by $7.0 million for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 as a result of the NeoCart® asset, which ceased to meet the criteria to be classified as held for sale during the nine months ended September 30, 2020.
General and administrative expense
General and administrative expenses increased by $2.2 million for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 primarily as a result of an increase of $0.8 million in insurance premiums, $0.5 million in professional and consulting fees, $0.4 million in employee-related expenses, $0.3 million in Board of Director fees, and $0.2 million in severance-related charges related to the employee terminations announced in June 2020.
Change in fair value of derivative liability
The change in fair value of derivative liability was zero for the nine months ended September 30, 2020 compared to a loss of $19.9 million for the nine months ended September 30, 2019 primarily due to the remeasurement of the Series B Warrant liability during the nine months ended September 30, 2019.
Loss on Debt Conversion
The loss on debt conversion was zero for the nine months ended September 30, 2020 compared to a loss of $0.3 million for the nine months ended September 30, 2019 relating2021 compared to conversions in 2019 of all previously issued convertible debt.
Interest expense
Interest expense was $0.6 million for the nine months ended September 30, 2020 compared to $1.8 million for the nine months ended September 30, 2019.2020. The decrease in interest expenseincrease was primarily due to the conversions of all previously issued convertible debt during 2019. Interest expense for the nine months ended September 30, 2020 primarily relates to the Warrant Exchange Promissory Notes.
Other income (expense)
Other income (expense) was a de minimis amount for the nine months ended September 30, 2020 compared to $0.8 million for the nine months ended September 30, 2019. The decrease in other income (expense) was primarily due to equity issuance costs related to a loss on the Series B Warrants which were expensed duringwrite-off of the nine months ended September 30, 2019 since the Series B Warrants were liability-classified.Promissory Note deemed uncollectible, partially offset by a gain on loan extinguishment of $0.4 million for PPP Note forgiveness obtained in May 2021.
Liquidity and Capital Resources
As of September 30, 2020,2021, we had $19.3$107.5 million in cash, cash equivalents, and restricted cash. We have not generated anysignificant revenue from product sales to date and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes, debt, and grant proceeds. Specifically, sinceSince our inception and through September 30, 2020,2021, we have raised an aggregate of $79.1$218.9 million to fund our operations, of which $66.5$206.3 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $2.1 million was from debt, and $0.2 million was from grant proceeds.
DuringIn April 2021, we issued and sold 10.0 million shares of our common stock at an offering price of $10.00 per share in the April 2021 Registered Direct Offering pursuant to a securities purchase agreement with certain institutional investors. We received net proceeds of $93.4 million. In February 2021, we issued and sold 3.0 million shares of our common stock at an offering price of $7.65 per share in the February 2021 Registered Direct Offering pursuant to a securities purchase agreement with certain institutional investors. We received net proceeds of $21.2 million. For additional information about the April 2021 Registered Direct Offering and the February 2021 Registered Direct Offering, see Note 9 in the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Additionally, during the nine months ended September 30, 2020,2021, we sold an aggregate of 86.21.0 million shares of our common stock in separate at-the-market offerings (“ATMs”) commenced in May 2020, June 2020 and August 2020. We sold 34.4 million shares under the May 2020 ATM, 24.8 million shares under the June 2020 ATM and 27.0 million shares under the August 2020 ATM. During the nine months ended September 30, 2020, weATM and received net proceeds of $25.6 million from the ATMs, after deducting commissions, fees and expenses of $1.1$4.8 million. The offerings wereoffering was made pursuant to our effective "shelf" registration statement on Form S-3 filed with the SEC on March 27, 2020, the base prospectus contained therein dated May 5, 2020, and the prospectus supplementssupplement related to the offeringsoffering dated May 8, 2020, June 12, 2020 and August 17, 2020. As of September 30, 2020, we had sold all of the shares of common stock available for issuance under the prospectus supplements filed on May 8, 2020 and June 12, 2020 in connection with the May 2020 and June 2020 ATMs. As of September 30, 2020, we had remaining capacity to issue up to $19.5 million of common stock under the prospectus supplement filed on August 17, 2020 in connection with the August 2020 ATM.
Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and expect tomay continue to incur net losses forin the foreseeable future. We incurred net losses of approximately $18.0$43.8 million and $32.6$18.0 million for the nine months ended September 30, 20202021 and 2019,2020, respectively. As of September 30, 2020,2021, we had an accumulated deficit of $69.5$117.1 million. In addition, as of September 30, 2020, we had accounts payable and accrued expenses of $2.6 million and indebtedness of $3.2 million.
The following table shows a summary of our cash flows for the periods indicated:nine months ended September 30, 2021 and 2020 (in thousands):
| | | Nine months ended September 30, | | Nine months ended September 30, |
| (in thousands) | 2020 | | 2019 | |
| | | 2021 | | 2020 |
| Net cash used in operating activities | Net cash used in operating activities | $ | (10,426) | | | $ | (8,150) | | Net cash used in operating activities | $ | (35,137) | | | $ | (10,426) | |
| Net cash used in investing activities | Net cash used in investing activities | (56) | | | (2,336) | | Net cash used in investing activities | (1,624) | | | (56) | |
| Net cash provided by financing activities | Net cash provided by financing activities | 22,144 | | | 24,159 | | Net cash provided by financing activities | 120,071 | | | 22,144 | |
| Net increase in cash, cash equivalents and restricted cash | $ | 11,662 | | | $ | 13,673 | | |
| Net increase in cash, cash equivalents, and restricted cash | | Net increase in cash, cash equivalents, and restricted cash | $ | 83,310 | | | $ | 11,662 | |
Operating activities
Cash used in operating activities was $35.1 million for the nine months ended September 30, 2021 compared to $10.4 million for the nine months ended September 30, 2020 compared $8.1 million for the nine months ended September 30, 2019.2020. The increase in cash used in operating activities was primarily driven by the decrease$15.0 million upfront payment to Bharat Biotech in accounts payable and accrued expenses andconnection with the amendment to the Covaxin Agreement to add rights to the Canadian market in June 2021, an increase in prepayments, currentour research and other assets during the nine months ended September 30, 2020development expenses for our product candidates, an increase in employee-related expenses as comparedwe expand our headcount to the nine months ended September 30, 2019.support our development, commercialization, and business efforts, and an increase in expenses for stockholder meetings and proxy solicitation.
Investing activities
Cash used in investing activities was $1.6 million for the nine months ended September 30, 2021 compared to $0.1 million for the nine months ended September 30, 2020 compared with $2.3 million for the nine months ended September 30, 2019.2020. The decreaseincrease in cash used in investing activities was primarily driven by the paymentreceipt of the Promissory Note of $0.8 million in April 2021, an increase of $0.7 million in purchases of property and equipment, and the acquisition costs during the nine months ended September 30, 2019 with no comparable payments made during the nine months ended September 30, 2020.of an intangible asset of $0.1 million.
Financing activities
Cash provided by financing activities was $120.1 million for the nine months ended September 30, 2021 compared to $22.1 million for the nine months ended September 30, 2020 compared to $24.2 million for2020. During the nine months ended September 30, 2019.2021, cash provided by financing activities primarily consisted of gross proceeds of $100.0 million and $22.9 million received from the April 2021 Registered Direct Offering and the February 2021 Registered Direct Offering, respectively, and gross proceeds of $5.0 million received under the August 2020 ATM, partially offset by payments of equity issuance costs of $8.5 million. During the nine months ended September 30, 2020, cash provided by financing activities was primarily driven byconsisted of gross proceeds of $26.7 million received under May 2020, June 2020, and August 2020the ATMs and $0.9 million in proceeds from the issuance of debt, partially offset by payments of equity issuance costs of $1.1 million and repayments of debt of $4.4 million. During the nine months ended September 30, 2019, cash provided by financing activities included proceeds from the Pre-Merger Financing of $22.4 million, proceeds from the issuance of convertible debt of $6.8 million, and proceeds from an April 2019 stock subscription agreement of $1.0 million, partially offset by payments of equity issuance costs of $0.6 million and repayments of debt of $5.3 million
Indebtedness
On March 27, 2020, the President of the United States signed into law the CARES Act, a sweeping stimulus bill intended to bolster the U.S. economy, among other things, and provide emergency assistance to qualifying businesses and individuals. On April 30, 2020, we were granted a loan from SVB in the aggregate amount of $0.4 million, pursuant to the PPP of the CARES Act. Certain amounts of the loan may be forgiven if they are used for qualifying expenses as described by the CARES Act. The loan was in the form of a promissory note which matures on April 30, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on the date the SBA compensates SVB for amounts forgiven or within 10 months following the expiration of the 24-week covered period for qualifying expenses if we have not applied for forgiveness. At September 30, 2020, there was $0.4 million of principal outstanding under the PPP loan.
On April 22, 2020, we issued the Warrant Exchange Promissory Notes with an aggregate principal amount of $5.6 million to existing investors in connection with an exchange of our Series A Warrants. The Warrant Exchange Promissory Notes had a maturity date of April 21, 2021 and did not bear interest. The Warrant Exchange Promissory Notes permitted prepayment in whole or in part at any time without penalty or premium. In the event that we consummated a financing transaction that generated cash to us, we were required to use 20% of the net proceeds of such transaction to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurred on or prior to August 22, 2020, and 30% of the net proceeds to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurred after August 22, 2020. As of September 30, 2020, there was $1.3 million of principal outstanding under the
Warrant Exchange Promissory Notes. On October 2, 2020, we made additional payments of $1.3 million causing the Warrant Exchange Promissory Notes to be repaid in full and no longer outstanding.
In September 2016, pursuant to the EB-5 Program,program, we entered into the EB-5 Loan Agreement to borrow up to $10.0 million from EB5EB-5 Life Sciences in $0.5 million increments. Borrowings are at a fixed interest rate of 4.0% per annum and are to be utilized in the clinical development, manufacturing, and commercialization of our productsproduct candidates and for our general working capital needs. Outstanding borrowings pursuant to the EB-5 Program become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. Under the terms and conditionsAs of the EB-5 Loan Agreement, we borrowed $0.5 million on March 26, 2020. At September 30, 2020,2021, there was $1.5 million of principal outstanding under the EB-5 program.Loan Agreement.
Funding requirements
We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development activities of our product candidates, andcontract to manufacture our product candidates, prepare for potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, contractexpand headcount to manufacturesupport our product candidatesdevelopment, commercialization, and business efforts, and operate as a public company.
OurFor additional information regarding our commitments and contingencies, see Note 13 in the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Factors impacting our future funding requirements both near- and long-term, will depend on many factors, including, but not limited to:include, without limitation, the following:
•the initiation, progress, timing, costs, and results of clinical trials for our product candidates;candidates, including the need for a Phase 3 immuno-bridging study to support a BLA submission for COVAXIN for ages 18 years and older as well as a safety-bridging study if required by the FDA;
•the outcome, timing, and cost of the regulatory authorization or approval process for our product candidates bycandidates; including with respect to COVAXIN in the FDA;United States and Canada;
•futurethe costs of manufacturing and commercialization;commercialization, including with respect to COVAXIN, if authorized or approved;
•costs related to doing business internationally with respect to our proposed development and commercialization of COVAXIN in Canada;
•the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights;
•the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;
•the costs of expanding infrastructure as well as to support our development, commercialization, and business efforts;
•the higher corporate infrastructure costs associated with operating as a public company;expenses needed to attract and retain skilled personnel;
•the extent to which we in-license or acquire other products, product candidates, or technologies.technologies; and
•the impact of the COVID-19 pandemic.
As of September 30, 2020,2021, we had $19.3$107.5 million in cash, cash equivalents, and restricted cash. This amount is unlikely to meet our near-term capital requirements and will not meet our capital requirements over the next 12 months. Our management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development salearrangements, sales of assets, andgovernment grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions.institutions, or other funding from the government or other third parties. There can be no assurance that these future funding efforts will be successful. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.
As previously disclosed, on December 27, 2019, we received a deficiency letter from the NASDAQ Capital Market ("Nasdaq") due to the bid price of our common stock falling below the minimum bid price for continued listing under Nasdaq listing rules for 30 consecutive days. In response to the COVID-19 pandemic and related extraordinary market conditions, Nasdaq tolled the compliance period for non-compliance with the minimum bid price listing requirement, effective April 16, 2020, until June 30, 2020 (the "Tolling Period"). Following the Tolling Period, we had until September 7, 2020 to regain compliance with the minimum bid price requirement. We did not regain compliance with the minimum bid price requirement as of September 7, 2020 and provided written notice to Nasdaq stating that we met the other continued listing requirements of Nasdaq and requesting an extension of the compliance period. On September 8, 2020, we received a written notice from the Nasdaq that we have been granted an additional 180 calendar days, or until March 8, 2021, to regain compliance with the minimum bid price requirement. If we are unable to regain compliance with Nasdaq listing rules regarding the price of our common stock in a timely manner, our common stock may become subject to delisting and we may find it difficult or impracticable to raise additional funds through public equity offerings.
As a result of these factors, together with the anticipated increase in spending that will be necessary to continue to develop and commercialize our products, we have concluded thatproduct candidates, there is substantial doubt about our ability to continue as a going concern within one year
after the date that the condensed consolidated financial statements included in this reportQuarterly Report on Form 10-Q are issued. See Note 1 to our condensed consolidated financial statements included in this reportQuarterly Report on Form 10-Q for additional information.
Off-Balance Sheet Arrangements
We dodid not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Recently Adopted Accounting Pronouncements
For a discussion of recently adopted accounting pronouncements, see Note 2 in the notes to ourthe condensed consolidated financial statements included in this report.Quarterly Report on Form 10-Q.
Other Company Information
None.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We have 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) under the Exchange Act,Act), as of September 30, 2020.2021. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (b) 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 disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are subject to claims inFor a discussion of legal proceedings, arisingsee Note 13 in the normal course of business. To our knowledge, there are no threatened or pending legal actions that could reasonably be expectednotes to have a material adverse effectthe condensed consolidated financial statements included in this Quarterly Report on our business, financial condition, results of operations or cash flows.Form 10-Q.
Item 1A. Risk Factors.
ThereExcept as set forth below and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, there have been no material changes in our risk factors as previously disclosed in our 20192020 Annual Report and in our Quarterly Report on Form 10-Q filed with the SEC on May 8, 2020.Report. The risks described in our 20192020 Annual Report, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and suchJune 30, 2021, and this Quarterly Report on Form 10-Q are not the only risks facing our company.Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.
We have submitted an EUA application for COVAXIN for pediatric use. The FDA may not grant us the EUA for pediatric use, and, even if they do, absent supplemental Biologics License Application approval for that indication, such EUA would be revoked when the COVID-19 emergency terminates, and, prior to that time, we would face significant competition from other pharmaceutical and biotechnology companies, and may not be able to compete effectively.
In November 2021, we submitted a request to the FDA for EUA for COVAXIN for pediatric use in children ages two to 18 years in the United States. The EUA submission was based on the results of a Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India.
The FDA has the authority to grant an EUA to allow unapproved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when there are no adequate, approved, and available alternatives. Generally, EUAs for unapproved products require that manufacturers distribute factsheets for healthcare providers, addressing significant known and potential benefits and risks, and the extent to which benefits and risks are unknown, and the fact that the FDA has authorized emergency use; and, distribution of factsheets for recipients of the product, addressing significant known and potential benefits and risks, and the extent to which benefits and risks are unknown, the option to accept or refuse the product, the consequences of refusing, available alternatives, and the fact that FDA has authorized emergency use.
EUAs for unapproved products also include requirements for adverse event monitoring and reporting, and other recordkeeping and reporting requirements. In addition, the FDA may include various requirements in an EUA as a matter of discretion as deemed necessary to protect the public health, including restrictions on which entities may distribute the product, and how to perform distribution (including requiring that distribution be limited to government entities), restrictions on who may administer the product, requirements for collection and analysis of safety and effectiveness data, waivers of Current Good Manufacturing Practice, and restrictions applicable to prescription drugs or restricted devices (including advertising and promotion restrictions).
As of the date of this Quarterly Report on Form 10-Q, we have not received any correspondence from the FDA regarding the EUA, other than an acknowledgement of the submission. Therefore, the timing of a potential grant of EUA for pediatric use, if at all, is currently unknown. In addition, there can be no guarantee that the data and results from the preclinical and clinical studies of COVAXIN, which have been conducted by Bharat Biotech in India, will be accepted by the FDA or otherwise sufficient to support our EUA submission.
If we are granted an EUA by the FDA for COVAXIN for pediatric use, we would be able to commercialize it for that use without FDA approval. However, the FDA may revoke the EUA where it is determined that the COVID-19 public health emergency no longer exists or warrants such authorization, and we cannot predict how long, if ever, an EUA would remain in place. Such revocation could adversely impact our business in a variety of ways including if we, Bharat Biotech, and our manufacturing partners have invested in the supply chain to provide COVAXIN for pediatric use under an EUA in the United States. In addition, the FDA may revoke or terminate the EUA sooner if, for example, we fail to comply with the conditions of authorization or other terms of the EUA or if COVAXIN is determined to be less effective or safe than it was initially believed to be. We cannot predict how long, if ever, an EUA for the pediatric use of COVAXIN would remain in place.
Furthermore, many biotechnology and pharmaceutical companies are developing treatments for COVID-19 or vaccines against SARS-CoV-2, the virus that causes COVID-19. Many of these companies, which include large pharmaceutical companies, have greater resources for development and established commercialization capabilities than us. In addition, some of these companies
have already received regulatory approval or a grant of EUA for their respective products, some of which include authorization for the administration of COVID-19 vaccines in certain pediatric patient populations. Given the products currently approved or authorized for use as well as those in development by others, even if our EUA is approved for pediatric use, we will face significant competition. If existing vaccines in the market or if competitors develop and commercialize additional COVID-19 vaccines before we can complete regulatory review and obtain an EUA for pediatric use or regulatory approval for COVAXIN, or if they develop and commercialize one or more COVID-19 vaccines that are safer, more effective, have fewer or less severe side effects, have broader market acceptance, are more convenient, or are less expensive than COVAXIN, our business, financial condition, and results of operations would be materially adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
ThereOn July 15, 2021, we entered into the Canada Consulting Agreement with an individual to provide services to us with regard to our Canadian operations. In connection therewith, we issued to such individual the Canada Warrants to purchase up to 0.2 million shares of our common stock at an exercise price of $6.36 per share upon the achievement of certain milestones related to COVAXIN. The Canada Warrants terminate on July 15, 2031, unless earlier terminated in accordance with their terms.
The Canada Warrants were no unregistered salesissued on July 15, 2021 in a private placement transaction pursuant to Rule 4(a)(2) of equity securities during the three months ended September 30, 2020.Securities Act. We did not receive any proceeds from the issuance of the Canada Warrants. See Note 10 in the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
Not Applicable.
Item 6. Exhibits.
| | | | | | | | |
| Exhibit | | Description |
| | |
10.110.1*# | | |
| | |
| 10.2*# | | |
| | |
| 31.1* | | |
| | |
| 31.2* | | |
| | |
| 32.1** | | |
| | |
| 101.INS* | | Inline XBRL Instance Document |
| | |
| 101.SCH* | | Inline XBRL Taxonomy Extension Schema Document |
| | |
| 101.CAL* | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| | |
| 101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| | |
| 101.LAB* | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| | |
| 101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| | |
| 104 | | The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL |
_______________________
* Filed herewith.
** Furnished herewith.
# Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | |
| Ocugen, Inc. |
| |
Dated: November 6, 20209, 2021 | /s/ Shankar Musunuri |
| Shankar Musunuri, Ph.D., MBA
Chief Executive Officer and Chairman
(Principal Executive Officer) |
| |
Dated: November 6, 20209, 2021 | /s/ Sanjay Subramanian |
| Sanjay Subramanian
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |