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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, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-36751
___________________________________________________________
https://cdn.kscope.io/faa404b98058b024b70641fd35a04df6-ocgn-20220930_g1.jpg
OCUGEN, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________
Delaware04-3522315
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
11 Great Valley Parkway
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 classTrading
symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.01 per shareOCGN
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 (§ 232.405 of this chapter) 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, a 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 filerAccelerated filer
Non-accelerated filerSmaller 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 13(a) of the Exchange 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 November 1, 2022, there were 218,886,893 outstanding shares of the registrant's common stock, $0.01 par value per share.


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OCUGEN, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
Page
Unless the context otherwise requires, references to the "Company," "we," "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.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical 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 objectives of management are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, 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, many of which cannot be predicted with accuracy and some of which might not even be anticipated.
The forward-looking statements in this Quarterly Report on Form 10-Q and those contained in (i) our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on February 28, 2022 (the "2021 Annual Report") and (ii) our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 filed with the SEC on May 6, 2022 and August 5, 2022, respectively (together with this Quarterly Report on Form 10-Q, the "2022 Quarterly Reports"), include, among other things, statements about:
our estimates regarding expenses, future revenues, capital requirements, as well as the timing and availability of and the need for additional financing to continue to advance our product candidates;
our activities with respect to BBV152, known as COVAXIN, a 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 expectations regarding clinical development, manufacturing, pricing, regulatory review and compliance, reliance on third parties, and commercialization;
our plans regarding a Biologics License Application pathway with the U.S. Food and Drug Administration ("FDA") for COVAXIN for adults ages 18 years and older, including the results from our Phase 2/3 immuno-bridging and broadening clinical trial and our ability to obtain funding from government agencies in the United States to initiate a safety clinical trial;
the ability of our collaboration partner, Bharat Biotech, to successfully respond to the deficiencies identified in an inspection conducted by the World Health Organization and any potential impact of these deficiencies on the regulatory and commercialization pathway, clinical and commercial supply, and the technology transfer for COVAXIN;
our activities with respect to evaluating the requirements for resubmitting an updated New Drug Submission for COVAXIN to Health Canada;
our activities with respect to commercializing COVAXIN in Mexico for use in adults over the age of 18 years and the submission to Comisión Federal para la Protección contra Riesgos Sanitarios for emergency use authorization for COVAXIN in Mexico for pediatric use in ages five to 18 years;
our ability to successfully complete a technology transfer to our third-party manufacturer for COVAXIN, Jubilant HollisterStier, and engage such manufacturer on commercially acceptable terms;
anticipated market demand for our COVID-19 vaccine product candidates for both adult and pediatric populations;
our ability to work with government agencies in the United States, Europe, and Japan to obtain funding to initiate clinical trials and manufacture our mucosal COVID-19 vaccine;
our ability to successfully continue and subsequently complete the Phase 1/2 clinical trial for OCU400;
the uncertainties associated with the clinical development and regulatory approval of our product candidates, including potential delays in the initiation, commencement, enrollment, and completion of current and future clinical trials;
our ability to realize any value from product candidates and preclinical programs being developed and anticipated to be developed in light of the inherent risks and difficulties involved in successfully commercializing products and the risk that our products, if approved, will not achieve broad market acceptance;
the uncertainties in obtaining successful clinical trial results for our product candidates and unexpected costs that may result therefrom;
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our ability to comply with regulatory schemes and other regulatory developments applicable to our business in the United States and foreign countries; including the extent to which developments with respect to the COVID-19 pandemic will affect the regulatory pathway available for COVID-19 vaccines in such countries;
the performance of third-parties upon which we depend, including contract development and manufacturing organizations, suppliers, manufacturers, group purchasing organizations, distributors, and logistics providers;
the pricing and reimbursement of our product candidates, if commercialized;
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 and our ability to establish additional collaborations and partnerships;
our ability to recruit or retain key scientific, technical, commercial, and management personnel and to retain our executive officers;
our ability to comply with stringent United States and applicable foreign government regulations with respect to the manufacturing of pharmaceutical products, including current Good Manufacturing Practice compliance, and other relevant regulatory authorities;
the extent to which health epidemics and other outbreaks of communicable diseases, including the COVID-19 pandemic, geopolitical turmoil, macroeconomic conditions, social unrest, political instability, terrorism, or other acts of war could disrupt our business and operations, including impacts on our development programs, global supply chain, and collaborators and manufacturers; and
other matters discussed under the heading "Risk Factors" contained in the 2021 Annual Report, the 2022 Quarterly Reports, and in any other documents we file with the SEC.
We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, 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 the 2021 Annual Report and in the 2022 Quarterly Reports, 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 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.
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 Form 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 indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe 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 Quarterly Report on Form 10-Q appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert their rights, to these tradenames or trademarks, as applicable. All tradenames, trademarks, and service marks included or incorporated by reference in this Quarterly Report on Form 10-Q are the property of their respective owners. Further, for ease of reference, the name "COVAXIN" is used throughout this Quarterly Report on Form 10-Q to refer to the vaccine candidate, BBV152. The name COVAXIN has not been evaluated or cleared by the FDA or Health Canada.
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OCUGEN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
September 30, 2022December 31, 2021
Assets
Current assets
Cash and cash equivalents$101,602 $94,958 
Prepaid expenses and other current assets5,895 7,688 
Total current assets107,497 102,646 
Property and equipment, net4,517 1,164 
Restricted cash 151 
Other assets4,225 1,800 
Total assets$116,239 $105,761 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$6,460 $2,312 
Accrued expenses8,004 4,325 
Operating lease obligations443 363 
Total current liabilities14,907 7,000 
Non-current liabilities
Operating lease obligations, less current portion3,764 1,231 
Long term debt, net2,265 1,712 
Total non-current liabilities6,029 2,943 
Total liabilities20,936 9,943 
Commitments and contingencies (Note 12)
Stockholders' equity
Convertible preferred stock; $0.01 par value; 10,000,000 shares authorized at September 30, 2022 and December 31, 2021
Series A; zero and seven shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
  
Series B; 54,745 shares issued and outstanding at September 30, 2022 and December 31, 2021
1 1 
Common stock; $0.01 par value; 295,000,000 shares authorized, 216,809,937 and 199,502,183 shares issued, and 216,688,437 and 199,380,683 shares outstanding at September 30, 2022 and December 31, 2021, respectively
2,168 1,995 
Treasury stock, at cost, 121,500 shares at September 30, 2022 and December 31, 2021
(48)(48)
Additional paid-in capital284,231 225,537 
Accumulated other comprehensive income30  
Accumulated deficit(191,079)(131,667)
Total stockholders' equity95,303 95,818 
Total liabilities and stockholders' equity$116,239 $105,761 
See accompanying notes to condensed consolidated financial statements.
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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,
2022202120222021
Operating expenses
Research and development$15,622 $6,281 $32,544 $28,006 
General and administrative7,497 4,508 28,174 15,450 
Total operating expenses23,119 10,789 60,718 43,456 
Loss from operations(23,119)(10,789)(60,718)(43,456)
Other income (expense), net1,197 (18)1,306 (380)
Loss before income taxes(21,922)(10,807)(59,412)(43,836)
Income tax benefit (52) (52)
Net loss$(21,922)$(10,755)$(59,412)$(43,784)
Other comprehensive income (loss)
Foreign currency translation adjustment20  30  
Comprehensive loss$(21,902)$(10,755)$(59,382)$(43,784)
Shares used in calculating net loss per common share — basic and diluted216,591,011 198,790,980212,755,746193,599,525
Net loss per share of common stock — basic and diluted$(0.10)$(0.05)$(0.28)$(0.23)
See accompanying notes to condensed consolidated financial statements.
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OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share amounts)
(Unaudited)
Series A Convertible Preferred StockSeries B Convertible Preferred StockCommon StockTreasury StockAdditional
Paid-in Capital
Accumulated Other Comprehensive IncomeAccumulated
Deficit
Total
SharesAmountSharesAmountSharesAmount
Balance at December 31, 20217$ 54,745$1 199,502,183$1,995 $(48)$225,537 $ $(131,667)$95,818 
Stock-based compensation expense— — — — — — — 3,299 — — 3,299 
Issuance of common stock for stock option exercises— — — — 277,323 3 — 177 — — 180 
Issuance of common stock for underwritten offering, net— — — — 15,973,420 160 — 49,691 — — 49,851 
Net loss— — — — — — — — — (18,019)(18,019)
Balance at March 31, 20227 $ 54,745 $1 215,752,926 $2,158 $(48)$278,704 $ $(149,686)$131,129 
Stock-based compensation expense— — — — — — — 2,079 — — 2,079 
Issuance of common stock for stock option exercises— — — — 488,843 5 — 404 — — 409 
Issuance of common stock upon restricted stock unit vesting, net— — — — 26,378 — — (48)— — (48)
Series A convertible preferred stock conversion(7)— — — 3,115 — — — — — — 
Foreign currency translation adjustment— — — — — — — — 10 — 10 
Net loss— — — — — — — — — (19,471)(19,471)
Balance at June 30, 2022 $ 54,745 $1 216,271,262 $2,163 $(48)$281,139 $10 $(169,157)$114,108 
Stock-based compensation expense— — — — — — — 2,495 — — 2,495 
Issuance of common stock for stock option exercises— — — — 529,833 5 — 607 — — 612 
Issuance of common stock upon restricted stock unit vesting, net— — — — 8,842 — — (10)— — (10)
Foreign currency translation adjustment— — — — — — — — 20 — 20 
Net loss— — — — — — — — — (21,922)(21,922)
Balance at September 30, 2022 $ 54,745 $1 216,809,937 $2,168 $(48)$284,231 $30 $(191,079)$95,303 
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OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
(in thousands, except share amounts)
(Unaudited)
Series A Convertible Preferred StockSeries B Convertible Preferred StockCommon StockTreasury StockAdditional
Paid-in Capital
Accumulated Other Comprehensive IncomeAccumulated
Deficit
Total
SharesAmountSharesAmountSharesAmount
Balance at December 31, 20207$  $ 184,133,384$1,841 $(48)$93,059 $ $(73,302)$21,550 
Stock-based compensation expense— — — — — — — 833 — — 833 
Issuance of common stock for stock 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, 20217 $ 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 stock 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, 20217 $ 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 stock option exercises    232,584 2  107  — 109 
Net loss    — —  —  (10,755)(10,755)
Balance at September 30, 20217 $ 54,745 $1 199,049,329 $1,990 $(48)$222,253 $ $(117,086)$107,110 
See accompanying notes to condensed consolidated financial statements.
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OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine months ended September 30,
20222021
Cash flows from operating activities
Net loss$(59,412)$(43,784)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense307 151 
Non-cash interest expense58 59 
Non-cash lease expense463 200 
Stock-based compensation expense7,873 4,275 
Income tax benefit (52)
Gain on forgiveness of Paycheck Protection Program note (426)
Impairment on note receivable 761 
Other(673) 
Changes in assets and liabilities:
Prepaid expenses and other assets1,888 845 
Accounts payable and accrued expenses6,592 2,925 
Lease obligations(261)(191)
Other assets 100 
Net cash used in operating activities(43,165)(35,137)
Cash flows from investing activities
Purchases of property and equipment(2,433)(747)
Asset acquisition (127)
Issuance of note receivable (750)
Repayment of note receivable761  
Net cash used in investing activities(1,672)(1,624)
Cash flows from financing activities
Proceeds from issuance of common stock51,198 128,606 
Tax payments for net share settlement of restricted stock units(57) 
Payment of equity issuance costs(298)(8,525)
Proceeds from issuance of debt500  
Payment of debt issuance costs(43) 
Financing lease principal payments (10)
Net cash provided by financing activities51,300 120,071 
Effect of changes in exchange rate on cash, cash equivalents, and restricted cash30  
Net increase in cash, cash equivalents, and restricted cash6,493 83,310 
Cash, cash equivalents, and restricted cash at beginning of period95,109 24,190 
Cash, cash equivalents, and restricted cash at end of period$101,602 $107,500 
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OCUGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
(Unaudited)
Nine months ended September 30,
20222021
Supplemental disclosure of non-cash investing and financing transactions:
Series B Convertible Preferred Stock issuance$ $4,988 
Exercise of warrants$ $603 
Forgiveness of Paycheck Protection Program note$ $426 
Equity issuance costs$2 $ 
Purchases of property and equipment$1,231 $9 
Right-of-use asset related to operating leases$2,916 $926 
Debt issuance costs$19 $ 
See accompanying notes to condensed consolidated financial statements.
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OCUGEN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    Nature of Business
Ocugen, Inc., together with its wholly owned subsidiaries ("Ocugen" or the "Company"), is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe. The Company is headquartered in Malvern, Pennsylvania, and manages its business as one operating segment.
Vaccines
Intramuscular COVID-19 Vaccine Candidate
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, for the prevention of COVID-19 caused by SARS-CoV-2 in the United States, its territories, and possessions. In June 2021 and April 2022, the Company entered into amendments 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 and Mexico, respectively, 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.
The Company has completed enrollment in a Phase 2/3 immuno-bridging and broadening clinical trial evaluating COVAXIN for adults ages 18 years and older, pursuant to an Investigational New Drug ("IND") application cleared by the U.S. Food and Drug Administration ("FDA"). The clinical trial was designed to evaluate whether the immune response observed in participants in a completed Phase 3 clinical trial in India is similar to a demographically representative, adult population in the United States. The Company intends to work with government agencies in the United States to obtain funding in order to comply with the requirements of a Biologics License Application ("BLA") submission.
Mucosal COVID-19 Vaccine Candidate
In September 2022, the Company entered into an exclusive license agreement ("WU License Agreement") with The Washington University ("Washington University"), pursuant to which the Company obtained the rights to develop, manufacture, and commercialize a mucosal COVID-19 vaccine, OCU500, in the United States, Europe, and Japan (collectively, the "Mucosal COVID-19 Vaccine Territory"). OCU500 is a recombinant, replication-deficient, adenovirus-vectored vaccine with a prefusion stabilized spike protein. As this vaccine can potentially be delivered through the mucosal route (intranasal or inhalation), the Company believes that OCU500 has the potential to generate rapid local immunity in the nose, mouth, upper airways, and lungs where SARS-CoV-2 enters and infects the body, which the Company believes may help reduce or prevent infection and transmission as well as provide protection against new COVID-19 variants. The Company intends to work closely with government agencies in the Mucosal COVID-19 Vaccine Territory to obtain funding to initiate clinical trials and manufacture OCU500.
Modifier Gene Therapy Platform
The Company is developing a modifier gene therapy platform designed to fulfill unmet medical needs in retinal diseases, including inherited retinal diseases ("IRDs"), such as retinitis pigmentosa ("RP"), Leber congenital amaurosis ("LCA"), dry age-related macular degeneration ("AMD"), and Stargardt disease. The Company's modifier gene therapy platform is based on nuclear hormone receptors ("NHRs"), which have the potential to restore homeostasis, the basic biological processes in the retina. The Company believes that its modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential to address multiple retinal diseases caused by mutations in multiple genes with one product, and potentially address complex diseases that are potentially caused by imbalances in multiple gene networks.
The Company believes that OCU400, its first product candidate being developed with its modifier gene therapy platform, has the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs,
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including RP and LCA. OCU400 has received Orphan Drug Designations ("ODDs") from the 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 ("PDE6ß") mutation-associated inherited retinal degenerations. Additionally, OCU400 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.
The Company has initiated a Phase 1/2 clinical trial, a multicenter, open-label, dose ranging study to assess the safety of unilateral subretinal administration of OCU400 in subjects with NR2E3 and RHO-related RP in the United States, pursuant to an IND application cleared by the FDA. The first patient was dosed in March 2022 and the Company has completed dosing patients in two out of three cohorts. The Company initiated dosing in the third cohort in October 2022. The Company expects to complete enrollment in the third cohort by the end of 2022. Patients with LCA associated with CEP290 mutations will be included in the current Phase 1/2 clinical trial.
The Company is also developing OCU410 and OCU410ST to utilize the nuclear receptor genes RAR-related orphan receptor A ("RORA") for the treatment of dry AMD and Stargardt disease, respectively. The Company is currently executing IND-enabling studies for OCU410 consistent with FDA discussions. The Company intends to submit IND applications in the second quarter of 2023 to initiate Phase 1/2 clinical trials. The Company has engaged CanSino Biologics, Inc. ("CanSinoBIO") as its manufacturing partner for its modifier gene therapy platform. CanSinoBIO has produced the clinical trial supplies for use in the Phase 1/2 clinical trials.
Novel Biologic Therapy for Retinal Diseases
The Company's biologic product candidate, OCU200, is a novel fusion protein designed to treat severely sight-threatening diseases, such as diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet AMD. The Company has completed the technology transfer of manufacturing processes to its contract development and manufacturing organization ("CDMO") and has produced clinical trial supplies to initiate a Phase 1 clinical trial. The Company is currently executing IND-enabling studies consistent with FDA discussions. The Company intends to submit an IND application in the first quarter of 2023 to initiate a Phase 1 clinical trial targeting DME.
Regenerative Medicine – Cell Therapy Platform
NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing chondrocytes, the cells responsible for maintaining cartilage health. The chondrocytes are derived from the patient on a unique scaffold. The Company believes NeoCart has the potential to accelerate healing and reduce pain by reconstructing a patient's previously damaged knee cartilage. It treats pain at the source, creating a similar, functional joint surface as it was before the injury. Ultimately, the therapy's goal is to prevent a patient's progression toward osteoarthritis, reduce pain, and improve function of the joint. In May 2022, the FDA granted a Regenerative Medicine Advanced Therapy ("RMAT") designation to NeoCart for the repair of knee cartilage injuries in adults. The Company is currently working with the FDA to finalize the Phase 3 clinical trial protocol necessary to advance the clinical development of NeoCart for eventual market authorization.
Going Concern Consideration
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") assuming the Company will continue as a going concern. As of September 30, 2022, the Company had cash and cash equivalents of approximately $101.6 million, which the Company believes will enable it to fund its operations into the fourth quarter of 2023. The cash runway is based on management's updated projections, including the removal of external expenditures for COVAXIN beyond the ongoing Phase 2/3 immuno-bridging and broadening clinical trial. The Company anticipates that the continued development of its COVID-19 vaccine candidates will require government funding to support the regulatory pathway of such candidates. There can be no assurance, however, that the Company will be successful in obtaining such funding in sufficient amounts, on terms acceptable to the Company, or at all. As the result of the updated projections, the Company believes that its cash and cash equivalents will enable the funding of its operating expenses and capital expenditure requirements through at least one year from the date the condensed consolidated financial statements are issued.
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2.    Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements included herein have been prepared in conformity with GAAP and under the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim reporting. The accompanying 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, 2021, included in the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2022 (the "2021 Annual Report"). The condensed consolidated financial statements include the accounts of Ocugen and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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 the 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 include those used in the accounting for research and development contracts, including clinical trial accruals, and the accounting and fair value measurement of equity instruments.
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 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 U.S. government and U.S. government agency obligations. The Company earns interest on its cash equivalents balance which is recorded as interest income in other income (expense), net within the condensed consolidated statements of operations and comprehensive loss. The Company recorded $0.5 million and $0.6 million as interest income for the three and nine months ended September 30, 2022, respectively. The Company's restricted cash balance consisted of cash held to collateralize a corporate credit card account.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash from the condensed consolidated balance sheets to the total amount shown in the condensed consolidated statements of cash flows (in thousands):
As of September 30,
20222021
Cash and cash equivalents$101,602 $107,349 
Restricted cash 151 
Total cash, cash equivalents, and restricted cash$101,602 $107,500 
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's lease agreements include lease and non-lease components, which the Company has elected not to account for separately for all classes of underlying assets. Lease expense for variable lease components is recognized when the obligation is probable.
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Operating leases are included in other assets and operating lease obligations in 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 and recognized as research and development expense or general and administrative expense based on the underlying nature of the expense. The Company currently leases real estate classified as operating leases. Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842, Leases, 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. The implicit interest rates were not readily determinable in the Company's current operating leases. As such, the incremental borrowing rates were used based on the information available at the commencement dates in determining the present value of the lease payments.
The lease term for the Company's leases includes the non-cancellable period of the lease plus any additional periods covered by either an 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.
Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on an index or rate, and amounts probable to be payable under the exercise of an option to purchase the underlying asset if reasonably certain.
Variable payments not dependent on an index or rate associated with the Company's leases are recognized when the event, activity, or circumstance is probable. Variable 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 payments.
Fair Value Measurements
The Company follows the provisions of FASB ASC Topic 820, Fair Value Measurements ("ASC 820"), which 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 carrying value of certain financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses, approximates their fair value due to the short-term nature of these instruments. As of September 30, 2022, the Company believes the fair value using Level 2 inputs of the borrowings under the EB-5 Loan Agreement (as defined in Note 7) approximate their carrying value. See Note 7 for additional information.
Stock-Based Compensation
The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, 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, including grants of stock options and 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 RSU is determined by the market price of a share of the Company's common stock on the grant date. The Company recognizes forfeitures as they occur.
Expense related to stock-based compensation awards granted 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. Stock options have a contractual term of 10 years. Expense for stock-based compensation awards with performance-based vesting conditions is only
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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, 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.
Recently Adopted Accounting Standards
In November 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This standard increases the transparency of transactions with the government that are accounted for by applying a grant or contribution accounting model, and aims to reduce diversity that currently exists in the recognition, measurement, presentation, and disclosure of government assistance received by business entities due to the lack of specific authoritative guidance in GAAP. This standard requires an entity to provide information regarding the nature of the transaction with a government and the related accounting policy used to account for this transaction, the line items on the consolidated balance sheet and consolidated statement of operations and comprehensive loss that are affected by the transaction and the amounts applicable to each financial statement line item, and the significant terms and conditions of the transaction, including commitments and contingencies. The standard was effective for the Company on January 1, 2022. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.
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 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 the 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 standard was effective for the Company on January 1, 2022. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) 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, 2024. Early adoption is currently permitted. This standard simplifies an issuer's accounting for convertible instruments by eliminating two of the three models 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 that 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 the 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.
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3.    License and Development Agreements
Exclusive License Agreement with Washington University
In September 2022, the Company entered into the WU License Agreement with Washington University, pursuant to which the Company was granted an exclusive, sublicensable, royalty-bearing license to patent rights for a mucosal COVID-19 vaccine, OCU500, as well as a license to certain tangible research property and technical information necessary to exploit the patent rights within the Mucosal COVID-19 Vaccine Territory. The Company paid Washington University an initial license issuance fee of $1.0 million, which was recognized as research and development expense in the condensed consolidated statement of operations and comprehensive loss during the three and nine months ended September 30, 2022. In addition, the Company is required to pay Washington University an annual license maintenance fee, payments upon the achievement of regulatory and commercial milestones in the aggregate amount of up to $37.0 million, and low single-digit percentage royalties on net sales of licensed products (as defined in the WU License Agreement).
Pursuant to the WU License Agreement, the Company may make, have made, sell, offer for sale, use, market, promote, distribute, export, and import licensed products in the Mucosal COVID-19 Vaccine Territory. The Company will use commercially reasonable efforts to develop, manufacture, promote, and sell the licensed products in the Mucosal COVID-19 Vaccine Territory.
Washington University maintains control of patent preparation, filing, prosecution, and maintenance. The Company is responsible for Washington University's out-of-pocket expenses related to the preparation, filing, prosecution, issuance, and maintenance of the licensed patent rights incurred pursuant to the WU License Agreement.
The WU License Agreement will expire on a country-by-country basis and a licensed product-by-licensed product basis and end, separately in each such country and for each such licensed product, upon the latter of (a) the expiration date of the last valid claim, (b) the fifteenth (15th) anniversary of the date of the first commercial sale of a licensed product, or (c) the expiration of the last form of Market Exclusivity (as defined in the WU License Agreement), subject to the earlier termination of the WU License Agreement in accordance with its terms. In addition, the Company may terminate the WU License Agreement without cause by giving at least ninety days' written notice. The WU License Agreement contains customary termination provisions in the event of an uncured material breach or upon certain corporate actions, including bankruptcy, receivership, or liquidation.
Co-Development, Supply and Commercialization Agreement with Bharat Biotech
The Company entered into the Covaxin Agreement with Bharat Biotech to co-develop COVAXIN for the Ocugen Covaxin Territory. The Covaxin Agreement was 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 Canadian market, for which the Company paid Bharat Biotech a non-refundable, upfront payment of $15.0 million at the execution of the amendment, 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 was amended a second time in April 2022 to add rights to the Mexican market. The Covaxin Agreement is a collaboration arrangement within the scope of ASC 808.
Pursuant to the Covaxin 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 rights granted to the Company by Bharat Biotech, the parties agreed to share any Operating Profits (as defined in the Covaxin Agreement) 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.
Under the Covaxin Agreement, the Company is collaborating with Bharat Biotech 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 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 potential commercial sale in the Ocugen Covaxin Territory.
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The Company has selected Jubilant HollisterStier as a manufacturing partner to prepare for the commercial manufacturing of COVAXIN. 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 a technology transfer. Following the completion of the technology transfer to Jubilant HollisterStier, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for the commercial manufacture and supply of COVAXIN. In March 2021, the Company issued shares of Series B Convertible Preferred Stock (as defined in Note 8) as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech under the Supply Agreement. See Note 8 for additional information about the Series B Convertible Preferred Stock issuance to Bharat Biotech.
The Covaxin Agreement continues in effect for the commercial life of COVAXIN, subject to the earlier termination of the Covaxin 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 the expiration of the Covaxin Agreement and may be earlier terminated by either party in the event of an uncured material breach or bankruptcy of the other party.
4.    Property and Equipment
The following table provides a summary of the major components of property and equipment as reflected on the condensed consolidated balance sheets (in thousands):
September 30, 2022December 31, 2021
Furniture and fixtures$333 $284 
Machinery and equipment1,505 855 
Leasehold improvements1,597 167 
Construction in progress1,660 232 
Total property and equipment5,095 1,538 
Less: accumulated depreciation(578)(374)
Total property and equipment, net$4,517 $1,164 
5.    Operating Leases
The Company has commitments under operating leases for office and laboratory space located in Malvern, Pennsylvania. The Company's leases have initial terms of approximately seven years and include options to extend the operating leases for up to 10 years. The options for extension have been excluded from the lease terms (and lease liabilities) as it is not reasonably certain that the Company will exercise such options.
The components of lease expense were as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2022202120222021
Operating lease cost$196 $66 $578 $200 
Variable lease cost36 26 89 79 
Total lease cost$232 $92 $667 $279 
Supplemental balance sheet information related to leases was as follows (in thousands):
September 30, 2022December 31, 2021
Right-of-use assets, net$4,040 $1,587 
Current lease obligations$443 $363 
Non-current lease obligations3,764 1,231 
Total lease liabilities$4,207 $1,594 
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Supplemental information related to leases was as follows:
Nine months ended September 30,
20222021
Weighted-average remaining lease term (years)6.56.2
Weighted-average discount rate6.4 %4.6 %
Future minimum base rent payments are approximately as follows (in thousands):
For the Years Ending December 31,Amount
Remainder of 2022$147 
2023762 
2024785 
2025809 
2026833 
Thereafter1,859 
Total$5,195 
Less: present value adjustment(988)
Present value of minimum lease payments$4,207 
6.    Accrued Expenses
The following table provides a summary of the major components of accrued expenses as reflected on the condensed consolidated balance sheets (in thousands):
September 30, 2022December 31, 2021
Research and development$1,379 $866 
Clinical2,199 703 
Professional fees494 747 
Employee-related2,363 1,716 
Other1,569 293 
Total accrued expenses$8,004 $4,325 
7.    Debt
In September 2016, pursuant to the U.S. government's Immigrant Investor Program, commonly known as 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") in $0.5 million increments. Borrowings may be limited by the amount of funds 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 $1.5 million prior to 2022 and an additional $0.5 million in September 2022. Issuance costs were recognized as a reduction to the loan balance and are amortized to interest expense over the term of the loan.
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The carrying values of the EB-5 Loan Agreement borrowings as of September 30, 2022 and December 31, 2021 are summarized below (in thousands):
September 30, 2022December 31, 2021
Principal outstanding$2,000 $1,500 
Plus: accrued interest287 241 
Less: unamortized debt issuance costs(22)(29)
Carrying value, net$2,265 $1,712 
8.    Equity
COVAXIN Preferred Stock Purchase Agreement
On March 1, 2021, the Company entered into a preferred stock purchase agreement with Bharat Biotech, 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 of $6.0 million 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 under its Sixth Amended and Restated Certificate of Incorporation, which the Company received in April 2021, 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. As of September 30, 2022, 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.
The Company accounted for the issuance of the Series B Convertible Preferred Stock in accordance with ASC 718 and recorded its grant date 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 supply of COVAXIN included in prepaid expenses and other current assets in the condensed consolidated balance sheet as of December 31, 2021. 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 incorporated 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.
As of September 30, 2022 and December 31, 2021, the remaining balance of the short-term asset for the advanced payment for the supply of COVAXIN was $4.1 million and $5.0 million, respectively. The reduction in the advanced payment resulted from the Company's receipt of COVAXIN drug product components from Bharat Biotech, which the Company utilized to produce the demonstration batch at Jubilant HollisterStier during the three months ended September 30, 2022. In February 2022, the Company entered into a supply commitment to purchase $14.3 million of COVAXIN drug product components from Bharat Biotech to utilize in the Process Performance Qualification ("PPQ") runs. The doses produced in the PPQ runs, if successfully completed, are expected to be commercially salable following regulatory approval. Subsequent to September 30, 2022, the Company withdrew this supply commitment as a result of the deficiencies identified in an inspection conducted by the World Health Organization ("WHO").
Offerings of Common Stock
Public Offering
In February 2022, the Company entered into an underwriting agreement with Cantor Fitzgerald & Co., pursuant to which the Company sold 16.0 million shares of its common stock at a public offering price of $3.13 per share (the "Public Offering"). Upon the closing of the Public Offering, the Company received net proceeds of $49.8 million, after deducting equity issuance costs payable by the Company.
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Registered Direct Offerings
In April 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company sold 10.0 million shares of its common stock at an offering price of $10.00 per share in a registered direct offering (the "April 2021 Registered Direct Offering"). Upon the closing of the April 2021 Registered Direct Offering, the Company received net proceeds of $93.4 million after deducting equity issuance costs of $6.6 million.
In February 2021, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which the Company sold 3.0 million shares of its common stock at an offering price of $7.65 per share in a registered direct offering (the "February 2021 Registered Direct Offering"). Upon the closing of the February 2021 Registered Direct Offering, the Company received net proceeds of $21.2 million after deducting equity issuance costs of $1.7 million.
At-the-Market Offering
During the nine months ended September 30, 2021, the Company sold 1.0 million shares of the Company's common stock in an at-the-market offering and received net proceeds of $4.8 million after deducting equity issuance costs of $0.1 million.
9.    Warrants
Liminal Warrants
On January 24, 2022, the Company entered into a non-binding letter of intent ("LOI") with Liminal Biosciences Inc. ("Liminal") for the acquisition of Liminal's manufacturing site in Belleville, Ontario, Canada for a combination of cash and warrants to purchase the Company's common stock. Pursuant to the LOI, the Company issued warrants to purchase 2.3 million shares of the Company's common stock at an exercise price of $3.76 per share, subject to certain adjustments (the "Liminal Warrants"). As of September 30, 2022, the Liminal Warrants were cancelled as a result of the termination of the LOI.
Canada Warrants
In July 2021, the Company entered into a consulting agreement with an individual to provide services to the Company with regard to the Company's Canadian operations (the "Canada Consulting Agreement"). Compensation under the Canada Consulting Agreement includes, among other forms of compensation, the issuance of warrants to purchase up to 0.2 million shares of the Company's common stock (the "Canada Warrants") and cash payments of up to $3.0 million upon the achievement of certain milestones related to COVAXIN. The Canada Consulting Agreement terminates in July 2023, unless earlier terminated in accordance with its terms.
The Canada Warrants were issued on July 15, 2021 in a private placement transaction. The warrant holder has the right to exercise the Canada Warrants to purchase up to 0.2 million shares of the Company'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, 2022 and December 31, 2021, all of the Canada Warrants were outstanding and unvested. The Canada Warrants are accounted for in accordance with ASC 718.
OpCo Warrants
Beginning in 2016, OpCo issued warrants to purchase the Company's common stock (the "OpCo Warrants"). As of September 30, 2022 and December 31, 2021, 0.6 million OpCo Warrants were outstanding. As of September 30, 2022, the outstanding OpCo Warrants had a weighted-average exercise price of $6.23 per share and expire between 2026 and 2027.
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10.    Stock-Based Compensation
Stock-based compensation expense for stock options and RSUs is reflected in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2022202120222021
General and administrative$2,057 $840 $5,769 $2,957 
Research and development438 507 2,104 1,318 
Total$2,495 $1,347 $7,873 $4,275 
As of September 30, 2022, the Company had $18.0 million of unrecognized stock-based compensation expense related to stock options and RSUs outstanding, which is expected to be recognized over a weighted-average period of 2.0 years.
Equity Plans
The Company maintains two 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"). As of September 30, 2022, the 2014 Plan and the 2019 Plan authorize for the granting of up to 0.8 million and 19.5 million equity awards with respect to the Company's common stock, respectively. In addition to stock options and RSUs granted under the Plans, the Company has granted certain stock options and RSUs as material inducements to employment in accordance with Nasdaq Listing Rule 5635(c)(4), which were granted outside of the Plans.
Stock Options to Purchase Common Stock
The following table summarizes the stock option activity:
Number of SharesWeighted-Average Exercise PriceWeighted Average Remaining Contractual Life (years)Aggregate Intrinsic Value
(in thousands)
Stock options outstanding at December 31, 2021
10,086,167 $2.59 8.8$24,664 
Granted5,809,257 $3.90 
Exercised(1,295,999)$0.93 
Forfeited(2,872,488)$4.10 
Stock options outstanding at September 30, 2022
11,726,937 $3.06 8.5$2,448 
Stock options exercisable at September 30, 2022
2,982,799 $2.56 7.5$1,089 
As of September 30, 2022 and December 31, 2021, there were 0.9 million and 1.2 million of stock options with performance-based vesting conditions outstanding, of which 0.7 million and 0.9 million were not yet vested and exercisable, respectively. The weighted-average grant date fair values of stock options granted during the three and nine months ended September 30, 2022 were $2.01 and $3.19, respectively. The weighted-average grant date fair values of stock options granted during the three and nine months ended September 30, 2021 were $5.97 and $2.77, respectively. The total fair values of stock options vested during the three and nine months ended September 30, 2022 were $0.6 million and $4.6 million, respectively. 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.
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RSUs
The following table summarizes the RSU activity:
Number of SharesWeighted-Average Grant-Date Fair Value
RSUs outstanding at December 31, 2021
191,811 $6.79 
Granted1,304,902 $4.16 
Vested(56,807)$6.42 
Forfeited(507,027)$4.75 
RSUs outstanding at September 30, 2022
932,879 $4.24 
11.    Net Loss Per Share of Common Stock
The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except share and per share amounts):
Three months ended September 30,Nine months ended September 30,
2022202120222021
Net loss — basic and diluted$(21,922)$(10,755)$(59,412)