EYEGATE PHARMACEUTICALS INC

This Quarterly Report on Form 10-Q contains statements that are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The forward-looking statements are principally, but not exclusively, contained in “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other 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. Forward-looking statements include, but are not limited to, statements about management’s confidence or expectations, and our plans, objectives, expectations and intentions that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “goals,” “sees,” “estimates,” “projects,” “predicts,” “intends,” “think,” “potential,” “objectives,” “optimistic,” “strategy,” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

The Company has entered into certain related-party transactions, making payments for services to one vendor, five consultants and two public universities for the three months ended September 30, 2020, all of whom also are stockholders of the Company. These transactions generally are ones that involve a stockholder or option holder of the Company to whom we also make payments during the year, typically as a consultant or a service provider. The amounts recorded or paid are not material to the accompanying Condensed Consolidated Financial Statements, with the exception of payments related to manufacturing services to one vendor in the amount of approximately $280,000 during the three months ended September 30, 2020. Payments to this vendor in the comparative periods were approximately $3,000 for the three months ended September 30, 2019 and $286,000 and $188,000 for the nine months ended September 30, 2020 and 2019, respectively.

The fair value of options granted for the nine months ended September 30, 2020 and September 30, 2019 was approximately $580,000 and $355,000, respectively. The fair value of restricted stock granted for the nine months ended September 30, 2020 and September 30, 2019 was approximately $321,000 and $0. As of September 30, 2020 and September 30, 2019, there was approximately $973,000 and $830,000 of total unrecognized compensation expense related to unvested stock-based compensation arrangements granted, which cost is expected to be recognized over a weighted-average period of 2.12 and 1.81 years, respectively. The aggregate intrinsic value of stock options outstanding and exercisable at September 30, 2020 and September 30, 2019 was approximately $0 and $0, respectively.

The Company is a party to a real property operating lease for the rental of office space in Waltham, Massachusetts of up to 4,516 square feet that is used for its corporate headquarters. This lease was amended during the first quarter of 2020 to extend its term through March 31, 2021.

On July 6, 2016, the Company entered into a real property operating lease for office and laboratory space of approximately 2,300 square feet in Salt Lake City, Utah. This lease was amended during the first quarter of 2020 to extend its term through October 31, 2020, and subsequently amended again in the fourth quarter of 2020 to extend its final term through December 31, 2020. Additionally, during the fourth quarter of 2020, the Company entered into a real property operating lease for new office and laboratory space of approximately 3,540 square feet in Salt Lake City, Utah, with a term through November 30, 2023. The Company anticipates moving into this office space by January 1, 2021.

The continued spread of the COVID-19 pandemic could adversely impact our clinical studies. In addition, COVID-19 has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, and business shutdowns. COVID-19 has also caused volatility in the global financial markets and threatened a slowdown in the global economy, which could negatively affect our ability to raise additional capital on attractive terms or at all. See Part II, Item 1A - “Risk Factors—The coronavirus pandemic could adversely impact our business, including clinical trials” in our Quarterly Report on Form 10-Q filed May 6, 2020. The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the severity of COVID-19 and the effectiveness of actions to contain and treat COVID-19. We cannot presently predict the scope and severity of any potential disruptions to our business, including to our ongoing and planned clinical studies. Any such shutdowns or other business interruptions could result in material and negative effects to our ability to conduct our business in the manner and on the timelines presently planned, which could have a material adverse impact on our business, results of operation, and financial condition. As of the date of this report, there have been no material adverse effects to our ongoing business operations from COVID-19.