HYPERION DEFI, INC. quarterly report, Q3 FY2022

Business context and reporting period

The supplied filing is Eyenovia, Inc.’s unaudited Form 10-Q for the quarter and nine months ended September 30, 2022—not a filing for Hyperion DeFi, Inc. Eyenovia is a pre-commercial ophthalmic technology company developing its Optejet drug-delivery system and related drug-device therapies.

Financial results and liquidity

Gross margin is not meaningful for these periods because there was no revenue or cost of revenue. In the first nine months of 2021, the company recognized $4.0 million of license revenue and $1.6 million of related cost of revenue.

• Cash and cash equivalents were $17.40 million at September 30; restricted cash was $7.88 million, for total cash and restricted cash of $25.27 million. Working capital was $18.40 million.
• Operating cash use was $19.70 million for the nine months, versus $15.00 million in 2021. Investing cash use was $0.56 million; financing provided $18.20 million. Total cash and restricted cash declined $2.06 million.
• Gross notes payable were $7.50 million at quarter-end. In November 2022, the company repaid the SVB loan for approximately $8.03 million, including principal, final payment and prepayment fee, using the restricted cash and approximately $0.1 million of unrestricted cash.
• Stockholders’ equity was $20.33 million and accumulated deficit was $112.11 million at September 30.

Material changes versus the prior comparable period

• Third-quarter net loss widened from $5.57 million in 2021 to $7.31 million in 2022; operating expenses increased 22% to $7.23 million. General and administrative expense rose 42%, chiefly from professional fees, staffing, stock compensation and facilities costs. Research and development expense rose 8%, including increased MicroLine Phase III study costs.
• Nine-month net loss increased from $15.76 million to $21.89 million. Operating expenses increased from $18.47 million to $21.54 million, with general and administrative expense up 51%; research and development expense declined 3%.
• There was no 2022 license revenue, compared with $4.0 million in the first nine months of 2021 from an Arctic Vision license milestone/payment recognition. 2021 also included $0.46 million of PPP loan extinguishment income.
• Equity financing included approximately $15.0 million gross proceeds from a March 2022 registered direct offering and approximately $4.1 million gross proceeds from at-the-market sales through September. Common shares outstanding increased to 35.53 million from 28.43 million at year-end 2021.

Outlook, commentary and risks

• Management stated that the company has no recurring revenue, has not achieved profitability, expects continuing operating cash outflows and expects R&D and G&A expenses to increase. The filing says these conditions raise substantial doubt about the company’s ability to continue as a going concern for at least one year from issuance of the financial statements; additional capital or licensing transactions are needed to support operations. Failure to obtain capital could require research and development or other cost reductions.
• Product development remains dependent on clinical, regulatory and commercialization outcomes. The company reported positive Phase III results for Mydcombi’s MIST-1 and MIST-2 studies and said it was preparing an NDA resubmission after an FDA complete response letter concerning device information. It expected to resubmit in November 2022. The filing also reports positive top-line VISION-2 results for MicroLine in the fourth quarter of 2022.
• Bausch + Lomb manages enrollment and costs for the MicroPine CHAPERONE study; Eyenovia reported reliable clinical product supply beginning in the third quarter of 2022. Licensing arrangements may provide milestone and royalty income, but no Arctic Vision or Senju payments were earned or recognized in the 2022 periods.
• Subsequent to quarter-end, the company received approximately $1.3 million net from additional at-the-market share sales and repaid the SVB loan. These actions reduced debt but also used substantially all restricted cash. The filing identifies no material change to previously disclosed risk factors and no material legal proceedings.
• Management expected adoption of lease accounting standard ASC 842 to materially increase reported assets and liabilities, estimating right-of-use assets of approximately $1.3 million and lease liabilities of approximately $1.4 million.

Investor verification points

• Confirm the issuer identity: the source is Eyenovia, Inc., despite the request metadata naming Hyperion DeFi, Inc.
• Review current cash runway and financing needs after the November loan repayment, including unrestricted cash remaining and subsequent capital raised.
• Check the status and outcome of the planned Mydcombi NDA resubmission and FDA review, and verify the reported VISION-2 results and further development plans.
• Assess the potential dilution from outstanding options and warrants; the filing lists 11.75 million potentially dilutive shares excluded from loss-per-share calculations.
• Reconcile the loan repayment amount and components: the subsequent-events note lists $7.5 million principal, $375,000 final payment and $150,000 prepayment fee.