ocgn-20220630

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 June 30, 2022


☐			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.)

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)
___________________________________________________________

263 Great Valley Parkway

Malvern, Pennsylvania 19355

(Former name, former address, and former fiscal year, if changed since last report)

___________________________________________________________

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 (§ 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 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 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 July 29, 2022, there were 216,565,916 outstanding shares of the registrant's common stock, $0.01 par value per share.

Table of Contents

OCUGEN, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022


		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 3 0 , 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 3 0 , 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 3 0 , 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 3 0 , 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II—OTHER INFORMATION		30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

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.

Table of Contents

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 Report on Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 6, 2022 (the "First Quarter 10-Q") 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, 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 expectations regarding clinical development, manufacturing, pricing, regulatory review and compliance, reliance on third parties, and commercialization;

•our plans regarding the submission of a Biologics License Application ("BLA") to the U.S. Food and Drug Administration ("FDA") for adults ages 18 years and older, including the need for a Phase 2/3 immuno-bridging and broadening clinical trial and safety clinical trial to support a BLA submission for COVAXIN;

•the ability of our collaboration partner, Bharat Biotech, to successfully respond to the deficiencies identified in an inspection conducted by the World Health Organization ("WHO") and any potential impact of these deficiencies on the regulatory and commercialization pathway available for COVAXIN;

•our ability to successfully continue dosing participants and subsequently complete the Phase 2/3 immuno-bridging and broadening clinical trial, as well as our ability to initiate the safety clinical trial;

•our activities with respect to assessing a regulatory pathway for the pediatric use of COVAXIN in the United States;

•our activities with respect to resolving the deficiencies communicated by Health Canada in its Notice of Deficiency on our New Drug Submission for COVAXIN, including our responses provided 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 two to 18 years;

•our ability to successfully obtain adequate supply of COVAXIN from Bharat Biotech, including any impact on clinical or commercial supply in light of the deficiencies identified in the inspection by the WHO, as well as to complete a technology transfer to our third-party manufacturer, Jubilant HollisterStier, and engage such manufacturer on commercially acceptable terms;

•anticipated market demand for COVAXIN for the adult and pediatric populations in North America;

•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 bringing product candidates to market and the risk that products will not achieve broad market acceptance;

•uncertainties in obtaining successful clinical trial results for product candidates and unexpected costs that may result therefrom;

Table of Contents

•our ability to comply with regulatory schemes applicable to our business and other regulatory developments in the United States, Canada, Mexico, and other 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, Canadian, Mexican, and other 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, including the ongoing invasion of Ukraine by Russia or increased trade restrictions between the United States, Russia, China, and other countries, 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 First Quarter 10-Q, 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 First Quarter 10-Q, 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.

Table of Contents

OCUGEN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	115,005	$	94,958
Prepaid expenses and other current assets	7,564		7,688
Total current assets	122,569		102,646
Property and equipment, net	3,153		1,164
Restricted cash	—		151
Other assets	4,366		1,800
Total assets	$	130,088	$	105,761
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	5,921	$	2,312
Accrued expenses	4,103		4,325
Operating lease obligations	314		363
Total current liabilities	10,338		7,000
Non-current liabilities
Operating lease obligations, less current portion	3,892		1,231
Long term debt, net	1,750		1,712
Total non-current liabilities	5,642		2,943
Total liabilities	15,980		9,943
Commitments and contingencies (Note 12)
Stockholders' equity
Convertible preferred stock; $0.01 par value; 10,000,000 shares authorized at June 30, 2022 and December 31, 2021
Series A; zero and seven shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—
Series B; 54,745 shares issued and outstanding at June 30, 2022 and December 31, 2021	1		1
Common stock; $0.01 par value; 295,000,000 shares authorized, 216,271,262 and 199,502,183 shares issued, and 216,149,762 and 199,380,683 shares outstanding at June 30, 2022 and December 31, 2021, respectively	2,163		1,995
Treasury stock, at cost, 121,500 shares at June 30, 2022 and December 31, 2021	(48)		(48)
Additional paid-in capital	281,139		225,537
Accumulated other comprehensive income	10		—
Accumulated deficit	(169,157)		(131,667)
Total stockholders' equity	114,108		95,818
Total liabilities and stockholders' equity	$	130,088	$	105,761

See accompanying notes to condensed consolidated financial statements.

Table of Contents

OCUGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Operating expenses
Research and development	$	9,007	$	18,853	$	16,922	$	21,725
General and administrative	10,558		6,757		20,677		10,942
Total operating expenses	19,565		25,610		37,599		32,667
Loss from operations	(19,565)		(25,610)		(37,599)		(32,667)
Other income (expense), net	94		(342)		109		(362)
Net loss	$	(19,471)	$	(25,952)	$	(37,490)	$	(33,029)
Other comprehensive income (loss)
Foreign currency translation adjustment	10		—		10		—
Comprehensive loss	$	(19,461)	$	(25,952)	$	(37,480)	$	(33,029)

Shares used in calculating net loss per common share — basic and diluted	215,862,977		195,572,189		210,806,330		190,960,775
Net loss per share of common stock — basic and diluted	$	(0.09)	$	(0.13)	$	(0.18)	$	(0.17)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

OCUGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share amounts)

(Unaudited)


	Series A Convertible Preferred Stock			Series B Convertible Preferred Stock			Common Stock			Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2021	7	$	—	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, 2022	7	$	—	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

Table of Contents

OCUGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)

(in thousands, except share amounts)

(Unaudited)


	Series A Convertible Preferred Stock			Series B Convertible Preferred Stock			Common Stock			Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income		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 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, 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 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, 2021	7	$	—	54,745	$	1	198,816,745	$	1,988	$	(48)	$	220,799	$	—	$	(106,331)	$	116,409

See accompanying notes to condensed consolidated financial statements.

Table of Contents

OCUGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six months ended June 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(37,490)	$	(33,029)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	166		93
Non-cash interest expense	38		40
Non-cash lease expense	334		134
Stock-based compensation expense	5,378		2,928
Gain on forgiveness of Paycheck Protection Program note	—		(426)
Impairment on note receivable	—		758
Changes in assets and liabilities:
Prepaid expenses and other assets	132		965

SEC Form 10-Q filed by Ocugen Inc.