Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. We undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the “Risk Factors” and “Special Note Regarding Forward-Looking Statements” sections of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

On September 27, 2019, we completed a reverse merger (the "Merger") with Ocugen OpCo, Inc. ("OpCo") in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of April 5, 2019, by and among OpCo, Restore Merger Sub, Inc., our wholly owned subsidiary ("Merger Sub"), and us, as amended, pursuant to which Merger Sub merged with and into OpCo, with OpCo surviving as our wholly owned subsidiary. Immediately after completion of the Merger, we changed our name to Ocugen, Inc. For accounting purposes, the Merger is treated as a “reverse asset acquisition” under generally acceptable accounting principles in the United States (“GAAP”) and OpCo is considered the accounting acquirer. Accordingly, OpCo’s historical results of operations replaced the our historical results of operations for all periods prior to the Merger and, for all periods following the Merger, the results of operations of the combined company will be included in our financial statements.

Overview

We are a biopharmaceutical company focused on developing gene therapies to cure blindness diseases and developing a vaccine to save lives from COVID-19.

Our cutting-edge technology pipeline includes:

•COVID-19 Vaccine — COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate being developed to prevent COVID-19 infection in humans. We are co-developing COVAXIN with Bharat Biotech International Limited (“Bharat Biotech”) for the U.S. market.

•Modifier Gene Therapy Platform — Based on nuclear hormone receptors ("NHRs"), we believe our gene therapy platform has the potential to address many retinal diseases, including retinitis pigmentosa ("RP"), leber congenital amaurosis ("LCA"), and dry age-related macular degeneration (“AMD”).

•Novel Biologic Therapies for Retinal Diseases — We are developing OCU200, a novel biologic product candidate, to treat diabetic macular edema (“DME”), diabetic retinopathy (“DR”), and wet AMD.

COVID-19 Vaccine

In February 2021, we entered into a Co-Development, Supply and Commercialization Agreement (the “Covaxin Agreement”) with Bharat Biotech, pursuant to which we obtained an exclusive right and license under certain of Bharat Biotech’s intellectual property rights, with the right to grant sublicenses, to develop, manufacture and commercialize COVAXIN for the prevention of COVID-19 in humans in the United States, its territories and possessions (the “Ocugen Covaxin Territory”). Under the Covaxin Agreement, we will be solely responsible for such activities for the Ocugen Covaxin Territory.

COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate being developed by Bharat Biotech, a global leader in vaccine innovation, and has been granted approval for emergency use in India. COVAXIN is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant therefore utilizing a historically proven approach to vaccine design. COVAXIN requires a two-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). The Phase 1 and Phase 2 clinical trials conducted in India reported strong Immunoglobulin G responses against the spike protein, receptor-binding domain, and the nucleocapsid protein of the SARS-CoV-2 virus, along with strong cellular responses. Strong cellular responses are necessary for memory and long-term durability of vaccines. In an analysis from the National Institute of Virology, serum samples collected from individuals vaccinated with COVAXIN showed similar neutralization titer to the U.K. strain as to the original strain. No statistical difference was observed in neutralizing antibodies titer between the U.K. strain and the original strain. These results support COVAXIN's potential to generate immune responses to multiple protein antigens of the virus and thereby potentially reducing or eliminating potential viral escape.

Table of Contents

Bharat Biotech is conducting a Phase 3 clinical trial in India. Enrollment in the Phase 3 clinical trial is complete. COVAXIN demonstrated a vaccine efficacy of 81% in the first interim analysis of the Phase 3 clinical trial, and an analysis from the National Institute of Virology indicated potential significant immunogenicity against the U.K. variant and other heterologous strains. We are currently evaluating the clinical and regulatory path for COVAXIN in the United States including obtaining Emergency Use Authorization ("EUA") from the U.S. Food and Drug Administration (the "FDA") and, eventually, biologic license application approval in the U.S. market, as well as our commercialization strategy, if authorized or approved. We have initiated discussions with the FDA regarding the development of COVAXIN, but an EUA application has not been submitted at this time. We are also in active discussions with manufacturers in the United States to produce a significant number of doses of COVAXIN to support commercialization of the vaccine in the United States, if authorized or approved.

Modifier Gene Therapy Platform

We are developing a breakthrough modifier gene therapy platform to generate therapies designed to fulfill unmet medical needs in the area of retinal diseases, including inherited retinal diseases ("IRDs") and dry AMD. Our modifier gene therapy platform is based on NHRs, which have the potential to restore homeostasis, the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our gene therapy platform, through its use of NHRs, represents a novel approach in that it may address multiple retinal diseases with one product. IRDs such as RP, a group of rare genetic disorders that involve a breakdown and loss of cells in the retina and can lead to visual impairment and blindness, affect over 2.0 million people worldwide. Over 150 gene mutations have been associated with RP and this number represents only 60% of the RP population. The remaining 40% of RP patients cannot be genetically diagnosed, making it difficult to develop individual treatments. We believe our first gene therapy candidate, OCU400, has the potential to be broadly effective in restoring retinal integrity and function across a range of IRDs. For example, we believe OCU400 has the potential to eliminate the need for developing more than 150 individual products and provide one treatment option for all RP patients.

OCU400 has received four Orphan Drug Designations 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. We are planning to initiate two Phase 1/2a clinical trials for OCU400 in the United States in the second half of 2021. OCU400 additionally received Orphan Medicinal Product Designation from the European Commission, based on the recommendation of the European Medicines Agency, for RP and LCA in February 2021, which we believe further supports the potential broad spectrum application of OCU400 to treat many IRDs. We are currently evaluating options to commence OCU400 clinical trials in Europe in 2022. Our second gene therapy candidate, OCU410, is being developed to utilize the nuclear receptor genes RAR-related orphan receptor A for the treatment of dry AMD. This candidate is currently in preclinical development. We are planning to initiate a Phase 1/2a clinical trial for OCU410 in 2022.

Novel Biologic Therapies for Retinal Diseases

We are also conducting preclinical development for our biologic product candidate, OCU200. OCU200 is a novel fusion protein designed to treat DME, DR and wet AMD. We had a pre-Investigational New Drug ("IND") meeting with the FDA in November 2020 and received guidance on IND-enabling preclinical studies to support the Phase 1/2a study. We expect to initiate IND-enabling preclinical studies for OCU200 in 2021 and initiate a Phase 1/2a clinical trial for OCU200 in 2022.

Product Candidates for the Treatment of Ocular Surface Diseases

We were developing OCU300, a small molecule therapeutic for the treatment of symptoms associated with ocular graft-versus-host disease, and OCU310, a treatment for patients with dry eye disease. The Phase 3 clinical trial for OCU300 was discontinued in 2020 based on results of a pre-planned interim sample size analysis conducted by an independent Data Monitoring Committee, which indicated the trial was unlikely to meet its co-primary endpoints upon completion. A Phase 3 clinical trial for OCU310 was completed in 2019 but results of the trial showed OCU310 did not meet its co-primary endpoints. We are no longer pursuing the development of either of these ocular surface diseases product candidates.

Impact of COVID-19 on our Business

The COVID-19 pandemic continues to evolve and we are closely monitoring the situation. If the number of active cases of COVID-19 continues to be high in the United States and elsewhere, the pandemic may delay enrollment in our planned clinical trials. Among other things, continued spread of COVID-19 may result in limitations on global international travel, which may delay key trial activities including necessary interactions with regulators. We may be faced with limitations in employee resources that would otherwise be focused on the conduct of clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people. Moreover, we may experience additional

Table of Contents

disruptions that could severely impact our business and development activities, including, but not limited to, strain on our suppliers and other third parties and the disruption of our ability to raise capital when needed on acceptable terms, if at all. Disruptions in our operations or supply chain, whether as a result of restricted travel, quarantine requirements or otherwise, could negatively impact our ability to proceed with our clinical trials, preclinical development, and other activities and delay our ability to receive product approval and generate revenue. Impacts that may result from the COVID-19 pandemic remain highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our preclinical development efforts, healthcare systems or the global economy as a whole. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

Financial Operations Overview

We have no products approved for commercial sale and have not generated significant revenue to date. We have never been profitable and have incurred operating losses in each year since inception. We incurred net losses of approximately $21.8 million and $20.2 million for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, we had an accumulated deficit of $73.3 million and a cash, cash equivalents, and restricted cash balance of $24.2 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

As of December 31, 2020, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2020, substantially all of our assets were located in the United States. Our headquarters and operations are located in Malvern, Pennsylvania.

Collaboration revenue

Collaboration revenue consists of royalty payments received in connection with agreements accounted for as collaborative arrangements under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 808, Collaborative Arrangements. We assess whether royalty payments from collaboration partners represent consideration from a customer. If the collaboration partner is considered a customer, we account for those payments within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers. However, if we conclude that our collaboration partner is not a customer, we will record royalty payments received as collaboration revenue in the period in which the underlying sale occurs and record expenses and expense reimbursements as either research and development expense or general and administrative expense, or a reduction thereof, based on the underlying nature of the expense or expense reimbursement. See Note 4 in the notes to the consolidated financial statements included in this report for additional information.

Research and development expense

Research and development costs are expensed as incurred. These costs consist of internal and external expenses. Internal expenses include the cost of salaries, benefits, severance, and other related costs, including stock-based compensation, for personnel serving in our research and development functions, as well as allocated rent and utilities expenses. External expenses include development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. License fees paid to acquire access to proprietary technology are expensed to research and development unless it is determined that the technology is expected to have an alternative future use. All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred to research and development expense due to the uncertainty about the recovery of the expenditure. We record costs for certain development activities, such as clinical trials, based on our evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development expense, as the case may be.

Research and development expenses account for a significant portion of our operating expenses. We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidate. We anticipate that our research and development expenses, excluding charges to in-process research and development expense, will increase in 2021 as compared to 2020 as we evaluate the clinical, regulatory, and commercialization path for COVAXIN in the United States as well as conduct preclinical and clinical activities with respect to our other product candidates. We are planning to initiate two Phase 1/2a clinical trials for OCU400 in the United States in the second half of 2021 and Phase 1/2a clinical trials for OCU410 and OCU200 in 2022. We are also currently evaluating options to commence OCU400 clinical trials in Europe in 2022.

Table of Contents

Our research and development expenses are not currently tracked on a program-by-program basis for indirect and overhead costs. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying, developing, and commercializing product candidates.

At this time, due to the inherently unpredictable nature of preclinical and clinical development as well as regulatory approval and commercialization, we are unable to estimate with any certainty the costs we will incur and the timelines we will require in our continued development and commercialization efforts. As a result of these uncertainties, successful development and completion of clinical trials as well a regulatory approval and commercialization are uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each future product candidate and are difficult to predict. We will continue to make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to our ability to enter into collaborations with respect to each product candidate, the scientific and clinical success of each product candidate as well as ongoing assessments as to the commercial potential of each product candidates.

General and administrative expense

General and administrative expense consists primarily of personnel expenses, including salaries, benefits, severance, insurance, and stock-based compensation expense, for employees in executive, accounting, and other administrative functions. General and administrative expense also includes corporate facility costs, including rent and utilities, insurance premiums, legal fees related to corporate matters, and fees for auditing, accounting, and other consulting services.

We anticipate that our general and administrative expenses will increase in 2021 as compared to 2020 as a result of higher corporate infrastructure costs including, but not limited to accounting, legal, human resources, consulting, and investor relations fees. Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and expense as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.

Severance-related expense

In June 2020, we communicated notice to five employees of termination of their employment. This reduction represented one-third of our workforce at the time of communication. All terminations were “without cause” and each employee received termination benefits upon departure. The termination dates varied for each employee and ranged from June 30, 2020 to December 31, 2020.

As a result of the workforce reduction, we recognized severance-related charges of $1.1 million during the year ended December 31, 2020. For the year ended December 31, 2020, we recognized $0.2 million of severance-related charges within general and administrative expense and $0.9 million of severance-related charges within research and development expense. We expect to pay severance benefits of $0.7 million in 2021.

Change in fair value of derivative liabilities

Change in fair value of derivative liabilities includes the change in fair value each reporting period of (a) the conversion and change in control features embedded in certain convertible notes, which were required to be bifurcated and recognized at fair value, and (b) the change in the fair value of the Series B Warrants that were issued in connection with a Securities Purchase Agreement entered into with certain accredited investors in June 2019. The change in fair value of derivative liabilities was $3.2 million during the year ended December 31, 2019. There were no derivative instruments fair valued on a recurring basis during the year ended December 31, 2020.

Interest expense

Interest expense primarily includes debt coupon interest, the amortization of debt issuance costs, and the accretion of debt discounts.

Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reported period. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable

Table of Contents

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

While our significant accounting policies are described in more detail in the notes to the consolidated financial statements appearing elsewhere in this report, we believe that the following accounting policies and estimates are those most critical to the preparation of our consolidated financial statements:

Stock-based compensation

We account for our stock-based compensation awards in accordance with the FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, including grants of employee stock options and modifications to existing agreements, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. We recognize forfeitures as they occur.

Our stock-based awards are subject to service-based vesting conditions. Compensation expense related to awards to employees and directors 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 awards generally vest over a one to three year requisite service period and have a contractual term of 10 years.

Estimating the fair value of options requires the input of subjective assumptions, including expected life of the option, stock price volatility, the risk-free interest rate, and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent our best estimates and involve a number of variables, uncertainties, assumptions, and the application of our judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.

These assumptions used in our Black-Scholes option-pricing model are as follows:

Expected Term. Due to the historical lack of a public market for the trading of our common stock and the lack of sufficient company-specific historical data, the expected term of employee options is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option.

Expected Volatility. The expected volatility is based on historical volatilities of us and similar entities within our industry for periods commensurate with the expected term assumption.

Risk-Free Interest Rate. The risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.

Expected Dividends. The expected dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock.

Stock-based compensation expense was $0.7 million and $0.9 million for the years ended December 31, 2020 and 2019, respectively. At December 31, 2020, we had $1.1 million of unamortized stock-based compensation expense related to unvested service-based stock options, which is expected to be recognized over a remaining weighted-average vesting period of two years.

Change in Fair Value of Derivative Liabilities

We issued convertible notes in 2018 and 2019 that contained embedded conversion and change in control features. The fair values of the embedded conversion and change in control features at the issuance of each convertible note and at the end of each reporting period were estimated using an income approach model. Inputs into this model included the expected time until conversion or change in control and our estimates of probability of conversion or change in control occurring, which were classified as Level 3 fair value inputs. There were no such derivatives valued as of December 31, 2020 and 2019, due to either the payment or conversion of the related convertible note. The change in fair value of the embedded conversion and change in control features was recognized within other income (expense) in the consolidated statements of operations and comprehensive loss until the payment or conversion of each convertible note. The change in fair value of derivative liabilities for the convertible notes was $1.3 million during the year ended December 31, 2019. Due to the conversions and payments of the

Table of Contents

convertible notes during 2019, no change in fair value of derivative liabilities was recorded during the year ended December 31, 2020 for the convertible notes.

In 2019, we also issued warrants to purchase our common stock: the Series A Warrants, Series B Warrants, and Series C Warrants (collectively the "Pre-Merger Financing Warrants") and we accounted for these warrants in accordance with FASB ASC Topic 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. The Series A Warrants and Series C Warrants were determined to meet the criteria for equity classification. The Series B Warrants were recognized as a derivative liability at fair value as the Series B Warrants did not meet the criteria related to equity indexation. The fair value of Series B Warrants was estimated using the Monte Carlo simulation model. Key fair value inputs included the starting stock price, expected stock price volatility during the Reset Period (as defined in the Series B Warrants), and additional shares issued from escrow. The methodology for measuring fair value was sensitive to the expected stock volatility assumption input. Upon conclusion of the Reset Period, we estimated the fair value of the Series B Warrants using a Black-Scholes valuation model. Inputs used in the valuation were unobservable and were therefore classified as Level 3 fair value inputs.

The Series B Warrants change in fair value each reporting period for the derivative liability was recognized within the consolidated statements of operations and comprehensive loss until the Series B Warrants were reclassified as equity in November 2019 following a final mark to market upon the completion of a Reset Period (as defined in the Series B Warrants) pursuant to which the number of shares of common stock underlying the Series B Warrants was increased based on the trading price for the common stock. The change in fair value of derivative liability for the Series B Warrants was $1.9 million during the year ended December 31, 2019. Due to the Series B Warrants reclassification as equity during 2019, no change in fair value of derivative liabilities was recorded during the year ended December 31, 2020 for the Series B Warrants.

Accounting for the Warrant Exchange

On April 22, 2020, we and OpCo entered into Amendment and Exchange Agreements (each an "Exchange Agreement" and collectively, the "Exchange Agreements") with the Series A Warrants holders. Pursuant to the Exchange Agreements, among other things, the number of common stock issuable upon the exercise of the Series A Warrants was adjusted. Concurrently with the Exchange Agreements, the Series A Warrants holders exchanged the Series A Warrants for shares of common stock and promissory notes (the "Warrant Exchange Promissory Notes") (collectively, the "Warrant Exchange").

We accounted for the Warrant Exchange by recognizing the fair value of the consideration transferred in excess of the carrying value of the Series A Warrants as a reduction of additional paid-in capital. The fair value of the consideration transferred was comprised of (i) the fair value of the common stock issued based on the number of shares issued and our stock price on the date of issuance and (ii) the fair value of the Warrant Exchange Promissory Notes at the date of issuance based on Level 2 fair value inputs. The fair value of the consideration transferred was in excess of the fair value of the Series A Warrants immediately prior to the consideration transfer. The excess consideration was accounted for as a deemed dividend to the Series A Warrant holders and is reflected as an additional net loss attributed to common stockholders in the calculation of basic and diluted net loss per common share for the year ended December 31, 2020. The fair value of the Series A Warrants immediately prior to the consideration transfer was estimated using a Black-Scholes valuation model. Inputs used in the valuation were unobservable and were therefore classified as Level 3 fair value inputs. See Note 11 in the notes to the consolidated financial statements included in this report for additional information.

Table of Contents

Results of Operations

Comparison of the Years Ended December 31, 2020 and 2019

The following table summarizes the results of our operations for the years ended December 31, 2020 and 2019:

Year ended December 31,

Revenues

Collaboration revenue $ 43 $ — $ 43

Total revenues 43 — 43

Operating expenses

In-process research and development 7,000 — 7,000

Other income (expense)

Change in fair value of derivative liabilities — (3,187) 3,187

Loss on debt conversion — (341) 341

Interest income 1 1 —

Collaboration revenue

Collaboration revenue increased by $42,620 for the year ended December 31, 2020 compared to the year ended December 31, 2019 as a result of a collaboration agreement with Advaite, Inc. for the development of Advaite's RapCov COVID-19 Testing Kit, which commenced in April 2020. We did not have any collaboration revenue during the year ended December 31, 2019.

Research and development expense

Research and development expense decreased by $1.7 million for the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease was primarily due to a decrease of $2.5 million related to the discontinuation of OCU310 clinical trial activities in 2019 and a decrease of $0.3 million in employee-related expenses, partially offset by an increase of $0.9 million in severance-related charges related to the employee terminations announced in June 2020 and $0.2 million related to consulting fees.

In-process research and development expense

In-process research and development expense increased by $7.0 million for the year ended December 31, 2020 compared to the year ended December 31, 2019 as a result of the NeoCart asset, which ceased to meet the criteria to be classified as held for sale during the year ended December 31, 2020. See Note 3 in the notes to the consolidated financial statements included in this report for additional information.

General and administrative expense

General and administrative expenses increased by $1.9 million, for the year ended December 31, 2020 compared to the year ended December 31, 2019. The increase was primarily due to an increase of $0.9 million in insurance premiums, $0.5 million in employee-related expenses, $0.3 million in Board of Director fees, and $0.2 million in severance-related charges related to the employee terminations announced in June 2020, partially offset by a decrease of $0.2 million in consulting fees.

Table of Contents

Change in fair value of derivative liability

The change in fair value of derivative liability was a loss of $3.2 million for the year ended December 31, 2019 due to the remeasurements of derivative liabilities related to the Series B Warrants and certain convertible notes. We did not have recurring fair value measurements of derivative liabilities for the year ended December 31, 2020 due to the reclassification of the Series B Warrants to equity and the conversions of convertible notes.

Loss on debt conversion

The loss on debt conversion was $0.3 million for the year ended December 31, 2019 relating to conversions in 2019 of certain convertible notes. We did not have a loss on debt conversion during the year ended December 31, 2020.

Interest expense

Interest expense was $0.7 million for the year ended December 31, 2020 and $1.8 million for the year ended December 31, 2019. The decrease in interest expense was primarily due to the conversions and/or payments of all convertible notes during 2019. Interest expense for the year ended December 31, 2020 primarily relates to the Warrant Exchange Promissory Notes.

Other income (expense)

Other income was $0.2 million for the year ended December 31, 2020. Other expense was $0.8 million for the year ended December 31, 2019. Other income for the year ended December 31, 2020 primarily relates to the recognition of deferred grant proceeds. Other expense for the year ended December 31, 2019 primarily relates to equity issuance costs related to the Series B Warrants which were expensed during the year ended December 31, 2019 since the Series B Warrants were liability classified.

Liquidity and Capital Resources

As of December 31, 2020, we had $24.2 million in cash, cash equivalents, and restricted cash. We have not generated significant revenue to date and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes, debt, and grant proceeds. Specifically, since our inception and through December 31, 2020, we have raised an aggregate of $90.3 million to fund our operations, of which $77.7 million was from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $2.1 million was from debt, and $0.2 million from grant proceeds.

During the year ended December 31, 2020, we sold an aggregate of 108.1 million shares of our common stock in separate at-the-market offerings ("ATMs") commenced in May 2020, June 2020, and August 2020. We sold 34.3 million shares under the May 2020 ATM, 24.8 million shares under the June ATM, and 49.0 million shares under the August 2020 ATM. During the year ended December 31, 2020, we received net proceeds of $36.3 million from the ATMs. The offerings were made pursuant to our effective "shelf" registration statement on Form S-3 filed with the SEC on March 27, 2020, the base prospectus contained therein dated May 5, 2020, and the prospectus supplements related to the offerings dated May 8, 2020, June 12, 2020, and August 17, 2020. As of December 31, 2020, we had sold all of the shares of common stock available for issuance under the prospectus supplements filed on May 8, 2020 and June 12, 2020 in connection with the May 2020 and June 2020 ATMs. See Note 9 in the notes to the consolidated financial statements included in this report for additional information.

In February 2021, we entered into a Securities Purchase Agreement pursuant to which we sold in a registered direct offering (the "Registered Direct Offering") 3.0 million shares and received net proceeds of $21.2 million, after deducting placement agent fees and related offering expenses of $1.7 million.

Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $21.8 million and $20.2 million for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, we had an accumulated deficit of $73.3 million. In addition, as of December 31, 2020, we had accounts payable and accrued expenses of $3.3 million and indebtedness of $2.1 million.

Table of Contents

The following table shows a summary of our cash flows for the periods indicated:

Year ended December 31,

Net cash used in operating activities $ (14,709) $ (16,893)

Net cash used in investing activities (307) (2,357)

Net cash provided by financing activities 31,611 25,066

Net increase in cash, cash equivalents and restricted cash $ 16,595 $ 5,816

Operating activities

Cash used in operating activities was $14.7 million for the year ended December 31, 2020 compared with $16.9 million for the year ended December 31, 2019. The decrease in cash used in operating activities was primarily driven by a decrease in payments for accounts payable offset by an increase in prepayments, current and other assets during the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Investing activities

Cash used in investing activities was $0.3 million for the year ended December 31, 2020 compared with $2.4 million for the year ended December 31, 2019. The decrease in cash used by investing activities was primarily driven by the payment of acquisition costs related to the Merger during the year ended December 31, 2019 with no comparable payments made during the year ended December 31, 2020, partially offset by an increase in the purchases of property and equipment made during the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Financing activities

Cash provided by financing activities was $31.6 million for the year ended December 31, 2020 compared to $25.1 million for the year ended December 31, 2019. During the year ended December 31, 2020, cash provided by financing activities was primarily driven by gross proceeds of $37.8 million received under May 2020, June 2020, and August 2020 ATMs and $0.9 million in proceeds from the issuance of debt, partially offset by payments of equity issuance costs of $1.5 million and repayments of debt of $5.6 million. During the year ended December 31, 2019, cash provided by financing activities included proceeds from the issuance of common stock and the Pre-Merger Financing Warrants in connection with the Merger of $22.6 million, proceeds from the issuance of convertible debt of $6.8 million, and proceeds from an April 2019 stock subscription agreement of $1.0 million, partially offset by repayments of debt of $5.3 million.

Indebtedness

On April 30, 2020, we were granted a loan from Silicon Valley Bank ("SVB") in the aggregate amount of $0.4 million, pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief and Economic Security Act of 2020, which was enacted on March 27, 2020. The loan was in the form of a promissory note dated April 30, 2020 in favor of SVB (the "PPP Note"). The PPP Note matures on April 30, 2022 and bears interest at a rate of 1.0% per annum. Principal and interest payments are payable monthly commencing on either (i) the date the Small Business Administration compensates SVB for any forgiven amounts or (ii) 10 months after the end of our loan forgiveness covered period, which ended in October 2020. Certain amounts of the loan may be forgiven if they are used for qualifying expenses as described by the PPP. At December 31, 2020, there was $0.4 million of principal outstanding under the PPP Note.

On April 22, 2020, we issued the Warrant Exchange Promissory Notes with an aggregate principal amount of $5.6 million to existing investors in connection with the Warrant Exchange. The Warrant Exchange Promissory Notes had a maturity date of April 21, 2021 and did not bear interest. The Warrant Exchange Promissory Notes permitted prepayment in whole or in part at any time without penalty or premium. In the event that we consummated a financing transaction that generated cash to us, we were required to use 20% of the net proceeds of such transaction to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurred on or prior to August 22, 2020, and 30% of the net proceeds to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurred after August 22, 2020. During the year ended December 31, 2020, we made payments to the Warrant Exchange Promissory Note holders of $5.6 million, causing the Warrant Exchange Promissory Notes to be repaid in full and no longer outstanding at December 31, 2020.

Table of Contents

In September 2016, pursuant to U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program (the "EB-5 Program"), we entered into entered into an arrangement (the “EB-5 Loan Agreement”) to borrow up to $10.0 million from EB5 Life Sciences, L.P. in $0.5 million increments. Borrowings are at a fixed interest rate of 4.0% and are to be utilized in the clinical development, manufacturing, and commercialization of our products and for our general working capital needs. Outstanding borrowings pursuant to the EB-5 Program become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. Under the terms and conditions of the EB-5 Loan Agreement, we borrowed $0.5 million on March 26, 2020. At December 31, 2020, there was $1.5 million of principal outstanding under the EB-5 Loan Agreement.

Funding requirements

We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, contract to manufacture our product candidates, add operational, financial and information systems to execute our business plan, maintain, expand and protect our patent portfolio, and operate as a public company.

Our future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

•the initiation, progress, timing, costs, and results of clinical trials for our product candidates;

•the outcome, timing, and cost of the regulatory approval process for our product candidates by the FDA including EUA for COVAXIN;

•future costs of manufacturing and commercialization, including COVAXIN if authorized or approved;

•the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights;

•the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;

•the costs of expanding infrastructure, as well as the higher corporate infrastructure costs associated with operating as a public company;

•the expenses needed to attract and retain skilled personnel;

•the extent to which we in-license or acquire other products, product candidates, or technologies; and

•the impact of the COVID-19 pandemic.

Our management plans to continue to raise additional capital to support the development and commercialization of our product candidates through public and private placements of equity and/or debt, payments from potential strategic research and development, sale of assets, government grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, and other funding from the government. There can be no assurance that these future funding efforts will be successful. If we cannot obtain the necessary funding, we will need to delay, scale back or eliminate some or all of our research and development programs; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.

As of December 31, 2020, we had cash, cash equivalents, and restricted cash of approximately $24.2 million, and since that date we have received net proceeds of $4.8 million from the sale of our common stock under the August 2020 ATM and net proceeds of $21.2 million from the sale of our common stock under the Registered Direct Offering. As a result of our cash, cash equivalents, and restricted cash balance as of December 31, 2020 and the net proceeds received subsequent to December 31, 2020 from the August 2020 ATM and the Registered Direct Offering, we believe that our cash, cash equivalents, and restricted cash will enable us to fund our operating expenses and capital expenditure requirements through at least one year from the date the consolidated financial statements included in this report are issued.

Off-Balance Sheet Arrangements

We did not have off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the Securities and Exchange Commission ("SEC").

Table of Contents

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 2 to our consolidated financial statements included in this report.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data

The financial statements required by this item are set forth beginning at page F-1 of this report and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of December 31, 2020. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in conformity with GAAP and includes those policies and procedures that:

•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the

Table of Contents

criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework of 2013. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2020.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Series B Convertible Preferred Stock Certificate of Designation

On March 18, 2021, we filed the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Series B Certificate of Designation”) in connection with the issuance of 54,745 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) to Bharat Biotech pursuant to a Preferred Stock Purchase Agreement.

Each share of Series B Preferred Stock is convertible, at the option of Bharat Biotech, into 10 shares of our common stock only after (i) our receipt of stockholder approval to increase the number of authorized shares of common stock under our Sixth Amended and Restated Certificate of Incorporation and (ii) our receipt of shipments by Bharat Biotech of the first 10.0 million doses of COVAXIN manufactured by Bharat Biotech pursuant to a supply agreement expected to be entered into with respect to the parties' Covaxin Agreement, and further on the terms and subject to the conditions set forth in the Series B Certificate of Designation. The conversion rate of the Series B Preferred Stock is subject to adjustment in the event of a stock dividend, stock split, reclassification, or similar event with respect to our common stock.

Holders of Series B Preferred Stock are entitled to receive dividends on Series B Preferred Stock equal (on an as-converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock, when and if such dividends are paid. Except as provided by law and certain protective provisions set forth in the Series B Certificate of Designation, the Series B Preferred Stock has no voting rights. Upon our liquidation or dissolution, holders of Series B Preferred Stock will be entitled to receive the same amount that a holder of common stock would receive if the preferred stock were fully converted to common stock.

2021 Annual Stockholder Meeting

Our Board of Directors has established Friday, June 11, 2021 as the date of our 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”).

In light of the ongoing COVID-19 pandemic, for the safety of our stockholders and in accordance with federal, state, and local guidance that has been issued regarding group gatherings, we have decided that the 2021 Annual Meeting will be held in a virtual format only, via the Internet, with no physical in-person meeting. Stockholders of record at the close of business on Monday, April 19, 2021 will be entitled to vote at the 2021 Annual Meeting.

Because the date of the 2021 Annual Meeting has been advanced by more than 30 calendar days from the date of the preceding year’s annual meeting, in accordance with Rule 14a-5(f) under the Exchange Act, we are informing stockholders of certain dates related to the 2021 Annual Meeting.

Pursuant to Rule 14a-8 under the Exchange Act, a stockholder intending to present a proposal to be included in the proxy materials for the 2021 Annual Meeting must deliver a proposal in writing to our principal executive offices no later than a reasonable time before we begin printing and mailing the proxy materials for the 2021 Annual Meeting. According to our bylaws, a stockholder must provide notice to the our corporate secretary of proposals intended to be presented at, but not included in the proxy materials for, the 2021 Annual Meeting, including director nominations for election to our Board of Directors, in a timely manner. Under our bylaws, in order to be timely, in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder must be delivered to us by the close of business on the later of (x) the 90th day prior to such annual meeting or (y) the 10th day following the day on which public announcement of the date of such meeting is first made.

As such, the new deadline for submission of proposals to be included in the proxy materials or otherwise to be considered at the 2021 Annual Meeting is the close of business on Monday, March 29, 2021, which we consider a reasonable time before we will begin printing and mailing proxy materials and is the 10th day following the date of filing of this Annual Report. Proposals

Table of Contents

should be addressed to: Corporate Secretary, Ocugen, Inc., 263 Great Valley Parkway, Malvern, PA 19355. Any such proposal must (i) meet the requirements set forth in the rules and regulations of the SEC in order to be eligible for inclusion in the proxy materials for the 2021 Annual Meeting and (ii) contain the information specified in, and otherwise comply with, our bylaws. We may omit any proposal from the proxy materials that does not comply with the SEC’s rules.

Table of Contents

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

The information required by this Item is incorporated by reference from the discussion responsive thereto contained in the Proxy Statement for our 2021 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principle Accountant Fees and Services.

Table of Contents

PART IV

Item 15. Exhibits, Financial Statements

The financial statement schedules and exhibits filed as part of this Annual Report on Form 10-K are as follows:

(a)(1) Financial Statements

See “Index to Consolidated Financial Statements” beginning on page F-1 of this report.

(a)(2) Financial Statement Schedules

Financial statement schedules have been omitted because the required information is not present, not present in amounts sufficient to require submission of the schedules, or because the required information is provided in the financial statements or notes thereto.

(a)(3) Exhibits

The exhibits required to be filed as part of this report are listed in the Exhibit Index attached hereto and are incorporated herein by reference.

Table of Contents

EXHIBIT INDEX

Exhibit Description

4.8* Form of Common Stock Purchase Warrant

Table of Contents

Exhibit Description

Table of Contents

Exhibit Description

21.1* List of Subsidiaries

101.INS* XBRL Instance Document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

_____________________

* Filed herewith.

# Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulations S-K.

+ Indicates a management contract or compensatory plan or arrangement.

Item 16. 10-K Summary

Not applicable.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Ocugen, Inc.

Dated: March 19, 2021 /s/ Shankar Musunuri, Ph.D., MBA

Dated: March 19, 2021 /s/ Sanjay Subramanian

Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons in the capacities held on the dates indicated.

Signature Title Date

/s/

Shankar Musunuri (Principal Executive Officer)

/s/ Sanjay Subramanian Chief Financial Officer March 19, 2021

Sanjay Subramanian (Principal Financial and Accounting Officer)

/s/ Ramesh Kumar Director March 19, 2021

Ramesh Kumar

/s/ Junge Zhang Director March 19, 2021

Junge Zhang

/s/ Uday B. Kompella Director March 19, 2021

Uday B. Kompella

/s/ Manish Potti Director March 19, 2021

Manish Potti

/s/ Suha Taspolatoglu Director March 19, 2021

Suha Taspolatoglu

/s/ Kirsten Castillo Director March 19, 2021

Kirsten Castillo

/s/ Prabhavathi Fernandes Director March 19, 2021

Prabhavathi Fernandes

Table of Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

OCUGEN, INC.

Page

Report of Independent Registered Public Accounting Firm F-2

Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2020 and 2019 F-4

Notes to the Consolidated Financial Statements F-8

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Ocugen, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ocugen, Inc. (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

Table of Contents

Accounting for Warrant Amendment and Exchange

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Philadelphia, Pennsylvania

March 19, 2021

F-3

Table of Contents

OCUGEN, INC.

CONSOLIDATED BALANCE SHEETS

Assets

Current assets

Liabilities and stockholders’ equity

Current liabilities

Non-current liabilities

Operating lease obligation, less current portion 389,317 163,198

Other non-current liabilities — 9,755

Commitments and contingencies (Note 15)

Stockholders’ equity

See accompanying notes to consolidated financial statements.

F-4

Table of Contents

OCUGEN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Year ended December 31,

Revenues

Collaboration revenue $ 42,620 $ —

Operating expenses

In-process research and development 7,000,000 —

Other income (expense)

Change in fair value of derivative liabilities — (3,187,380)

Loss on debt conversion — (341,136)

Deemed dividend related to Warrant Exchange (12,546,340) —

Net loss per share of common stock — basic and diluted $ (0.31) $ (1.46)

Other comprehensive income (loss)

Foreign currency translation adjustment — (451)

See accompanying notes to consolidated financial statements.

F-5

OCUGEN, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Shares Amount

Repurchase of treasury stock — — (47,864) — — — (47,864)

Foreign currency translation — — — — (451) — (451)

See accompanying notes to consolidated financial statements.

F-6

Table of Contents

OCUGEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

In-process research and development expense 7,000,000 —

Change in fair value of derivative liability — 3,187,380

Loss on debt conversion — 341,136

Changes in assets and liabilities:

Cash flows from investing activities

Payment of reverse asset acquisition costs — (2,327,273)

Cash flows from financing activities

Financing lease principal payments (23,856) (25,866)

Payment of equity issuance costs (1,477,806) —

Payments of debt issuance costs (5,740) (99,202)

Purchases of treasury stock — (47,864)

Proceeds from Pre-Merger Financing — 22,546,353

Net increase in cash, cash equivalents and restricted cash 16,595,483 5,816,455

Supplemental disclosure of non-cash transactions:

Issuance of Warrant Exchange Promissory Notes $ 5,625,000 $ —

Obligation settled with common stock $ 331,218 $ —

Purchase of property and equipment $ 213,625 $ —

Conversion of convertible notes $ — $ 13,979,788

Right-of-use assets related to operating leases $ 179,599 $ 470,356

Reverse asset acquisition costs $ — $ 2,252,795

See accompanying notes to consolidated financial statements.

F-7

Table of Contents

OCUGEN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business

Ocugen, Inc., together with its wholly owned subsidiaries (“Ocugen” or the “Company”), is a biopharmaceutical company focused on developing gene therapies to cure blindness diseases and developing a vaccine to save lives from COVID-19. The Company is located in Malvern, Pennsylvania.

Ocugen is co-developing COVAXIN, a whole-virion inactivated COVID-19 vaccine candidate, with Bharat Biotech International Limited ("Bharat Biotech") for the U.S. market. COVAXIN is being developed to prevent COVID-19 infection in humans and is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. In February 2021, the Company entered into a Co-Development, Supply and Commercialization Agreement (the "Covaxin Agreement") with 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 COVAXIN for the prevention of COVID-19 in humans in the United States, its territories and possessions (the “Ocugen Covaxin Territory”). COVAXIN has been granted approval for emergency use in India. A Phase 3 clinical trial is ongoing in India. The Company is currently evaluating the clinical and regulatory path for COVAXIN in the United States including obtaining Emergency Use Authorization ("EUA") from the U.S. Food and Drug Administration (the "FDA") and, eventually, biologic license application (“BLA”) approval in the U.S. market, as well as the Company's commercialization strategy, if authorized or approved. See Note 16 for additional information about the terms, rights, and obligations under the Covaxin Agreement.

Ocugen is developing a breakthrough modifier gene therapy platform to generate therapies designed to fulfill unmet medical needs in the area of retinal diseases, including inherited retinal diseases ("IRDs") and dry age-related macular degeneration ("AMD"). Ocugen'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. Unlike single-gene replacement therapies, which only target one genetic mutation, Ocugen believes that its gene therapy platform, through its use of NHRs, represents a novel approach in that it may address multiple retinal diseases with one product.

OCU400 is the Company's first product candidate being developed with the Company's modifier gene therapy platform. OCU400 is a novel gene therapy product candidate with the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including retinitis pigmentosa ("RP") and leber congenital amaurosis ("LCA"). OCU400 has received four Orphan Drug Designations 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. Ocugen is planning to initiate two Phase 1/2a clinical trials for OCU400 in the United States in the second half of 2021. OCU400 additionally received Orphan Medicinal Product Designation from the European Commission, based on the recommendation of the European Medicines Agency, for RP and LCA in February 2021, which Ocugen believes further supports the broad spectrum application of OCU400 to treat many IRDs. Ocugen is currently evaluating options to commence OCU400 clinical trials in Europe in 2022. Ocugen's second gene therapy candidate, OCU410, is being developed to utilize the nuclear receptor genes RAR-related orphan receptor A ("RORA") for the treatment of dry AMD. This candidate is currently in preclinical development. Ocugen is planning to initiate a Phase 1/2a clinical trial for OCU410 in 2022.

Ocugen is also conducting preclinical development for its biologic product candidate, OCU200. OCU200 is a novel fusion protein designed to treat diabetic macular edema, diabetic retinopathy, and wet AMD. Ocugen had a pre-Investigational New Drug ("IND") meeting with the FDA in November 2020 and received guidance on IND-enabling preclinical studies to support the Phase 1/2a study. Ocugen expects to initiate IND-enabling preclinical studies for OCU200 in 2021. Ocugen plans to initiate a Phase 1/2a clinical trial for OCU200 in 2022.

Ocugen was developing OCU300, a small molecule therapeutic for the treatment of symptoms associated with ocular graft-versus-host disease. The Phase 3 clinical trial for OCU300 was discontinued in 2020 based on results of a pre-planned interim sample size analysis conducted by an independent Data Monitoring Committee, which indicated the trial was unlikely to meet its co-primary endpoints upon completion. Ocugen is no longer pursuing the development of this product candidate.

Merger with Histogenics

On September 27, 2019, the Company, which was formerly known as Histogenics Corporation ("Histogenics"), completed a reverse merger (the "Merger") with Ocugen OpCo, Inc. ("OpCo") in accordance with the terms of the Agreement and Plan of

F-8

Table of Contents

Merger and Reorganization, dated as of April 5, 2019, by and among OpCo, Restore Merger Sub, Inc., the Company's wholly owned subsidiary ("Merger Sub"), and the Company, as amended (the "Merger Agreement") pursuant to which Merger Sub merged with and into OpCo, with OpCo surviving as the Company's wholly owned subsidiary. Immediately after completion of the Merger, the Company changed its name to Ocugen, Inc. and the business previously conducted by OpCo became the business conducted by the Company. OpCo is deemed to be the accounting acquirer. Accordingly, the historical financial statements of OpCo became the Company’s historical financial statements, including the comparative prior periods. See Note 3 for additional information.

Going Concern Consideration

The audited 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 December 31, 2020, the Company had cash, cash equivalents, and restricted cash of approximately $24.2 million, and since that date the Company has received net proceeds of $4.8 million from the sale of the Company's common stock in an at-the-market offering (“ATM") commenced in August 2020 and net proceeds of $21.2 million from the sale of the Company's common stock in a registered direct offering (the "Registered Direct Offering"). See Note 9 for additional information about the August 2020 ATM. See Note 16 for additional information about the Registered Direct Offering. As a result of the Company's cash, cash equivalents, and restricted cash balance as of December 31, 2020 and the net proceeds received subsequent to December 31, 2020 from the August 2020 ATM and the Registered Direct Offering, the Company believes that its cash, cash equivalents, and restricted cash will enable the Company to fund its operating expenses and capital expenditure requirements through at least one year from the date the audited consolidated financial statements are issued.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements included herein have been prepared in conformity with GAAP and under the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).The consolidated financial statements include the accounts of Ocugen, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform with current year presentation.

Use of Estimates

In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include those used in the estimation of clinical trial accruals, warrant transactions, asset held for sale, and the valuation of debt and equity instruments, including embedded derivatives, and stock-based compensation.

Collaboration Arrangements

The Company assesses whether collaboration agreements are subject to Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 808, Collaborative Arrangements (“ASC 808”), based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of ASC 808, the Company assesses whether the payments between the Company and the collaboration partner are subject to other accounting literature. If payments from the collaboration partner represent consideration from a customer, the Company accounts for those payments within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). However, if the Company concludes that its collaboration partner is not a customer, the Company will record royalty payments received as collaboration revenue in the period in which the underlying sale occurs and record expenses and expense reimbursements as either research and development expense or general and administrative expense, or a reduction thereof, based on the underlying nature of the expense or expense reimbursement.

The Company has two agreements accounted for as collaborative agreements within the scope of ASC 808. See Note 4 for additional information.

F-9

Table of Contents

Exit and Disposal Activities

The Company records liabilities for one-time termination benefits in accordance with FASB ASC Topic 420, Exit and Disposal Cost Obligations ("ASC 420"). In accordance with ASC 420, an arrangement for one-time termination benefits exists at the date the plan of the termination meets the following criteria: (i) management commits to a plan of termination; (ii) the plan identifies the impacted employees and expected completion date; (iii) the plan identifies the terms of the benefits arrangement; (iv) it is unlikely significant changes to the plan will be made or the plan will be withdrawn; and (v) the plan has been communicated to employees. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits, are recognized ratably over the future service period.

The Company records liabilities for employee termination benefits covered by ongoing benefit arrangements in accordance with FASB ASC Topic 712, Compensation—Nonretirement Postemployment Benefits ("ASC 712"). In accordance with ASC 712, costs for termination benefits under ongoing benefits arrangements are recognized when management has committed to a plan of termination and the costs are probable and estimable.

Severance-related charges, once incurred, are recognized as either research and development expense or general and administrative expense within the consolidated statements of operations and comprehensive loss depending on the job function of the employee.

Asset Held for Sale

An asset is considered to be held for sale when all of the following criteria are met: (i) management commits to a plan to sell the asset; (ii) it is unlikely that the disposal plan will be significantly modified or discontinued; (iii) the asset is available for immediate sale in its present condition; (iv) actions required to complete the sale of the asset have been initiated; (v) sale of the asset is probable and the completed sale is expected to occur within one year; and (vi) the asset is actively being marketed for sale at a price that is reasonable given its current market value.

A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. If the long-lived asset is newly acquired, the carrying amount of the long-lived asset is established based on its fair value less cost to sell at the acquisition date. A long-lived asset is not depreciated or amortized while it is classified as held for sale, and an impairment loss would be recognized to the extent the carrying amount exceeds the asset's fair value less cost to sell.

As of December 31, 2019, the Company had an intangible asset held for sale. The intangible asset qualified and was recorded as held for sale as of the date of the Merger and was carried at its original fair value less cost to sell of $7.0 million. The Company concluded during the year ended December 31, 2020, that a sale of the intangible asset held for sale was no longer probable to be completed within one year from the date the intangible asset was initially recorded as held for sale. As such, the carrying value of the intangible asset was reduced to zero with the corresponding charge of $7.0 million recognized as in-process research and development expense during the year ended December 31, 2020 as the in-process research and development does not have an alternative future use.

Although the Company has concluded that a sale of the intangible asset is no longer probable to be completed within one year from the date the intangible asset was initially recorded as held for sale, the Company is party to an Asset Purchase Agreement (as defined within Note 3) related to the intangible asset as of December 31, 2020, and continues to market the asset for sale. In the event of a sale of the intangible asset under the Asset Purchase Agreement or to another party, the Company will account for the sale in the period in which the sale occurs.

Fair Value Measurements

The company follows the provisions of the FASB ASC Topic 820, Fair Value Measurements (“ASC 820”), which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair measurements.

The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximates their fair values due to the short-term nature of these instruments.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of

F-10

Table of Contents

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)

As of December 31, 2020, the Company believes the fair values using Level 2 inputs of the PPP Note and the borrowings under the EB-5 Loan Agreement (both as defined in Note 10) approximate their carrying values. See Note 10 for additional information.

Derivative Instruments

The Company does not have derivative hedging instruments used to mitigate risk. The Company evaluates all financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument, in accordance with FASB ASC Topic 815, Derivatives and Hedging. The Company additionally follows the provisions of ASC Topic 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity for warrants issued, which is the authoritative guidance on accounting for derivative financial instruments indexed and potentially settled in a company's own stock. In order to determine if a contract is considered indexed to the Company's own stock for the purposes of determining liability versus equity classification, the Company performs a two-step analysis: (i) evaluate whether the contract contains any exercise contingencies and, if so, whether they disqualify the contract from being classified as equity; and (ii) assess whether the settlement terms are consistent with equity classification.

For derivative instruments that are accounted for as liabilities, including liability-designated warrants, the derivative instrument is initially recorded at its fair value as a derivative liability and is then revalued at each reporting date, with changes in the fair value reported as other income (expense) in the consolidated statements of operations and comprehensive loss. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

The Company had derivative instruments that were fair valued on a recurring basis using Level 3 inputs during the year ended December 31, 2019. There were no derivative instruments fair valued on a recurring basis using Level 3 inputs during the year ended December 31, 2020.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Cash and cash equivalents may include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposit, commercial paper, and U.S. government and U.S. government agency obligations. The Company’s restricted cash balance consists of cash held to collateralize a corporate credit card account.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows:

As of December 31,

Property and Equipment, Net

Property and equipment is recorded at cost. Significant additions or improvements are capitalized, and expenditures for repairs and maintenance are charged to expense as incurred. Gains and losses on disposal of assets are included in the consolidated statements of operations and comprehensive loss. Depreciation is calculated using the straight-line method and is recognized over the expected useful life of the underlying asset. Then Company's property and equipment includes office equipment, lab

F-11

Table of Contents

equipment, leasehold improvements, and a right-of-use asset under the Company's financing lease. The Company's office equipment includes computers and other office technology equipment with a useful life of five years as well as furniture and fixtures with a useful life of seven years. The Company's lab equipment has a useful life of five years. Leasehold improvements are amortized over the shorter of their useful lives or the remaining lease term. If a leasehold improvement transfers ownership to the Company at the end of the lease term, the leasehold improvement is amortized over its useful life. The right-of-use asset under the Company's financing lease is amortized over five years, which represents the estimated useful life of the underlying leased equipment. See Note 6 for additional information about the Company's financing lease.

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 has lease agreements which 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.

Operating leases are included in other assets and operating lease obligations on the Company’s 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. The Company primarily leases real estate classified as operating leases. FASB ASC Topic 842, Leases ("ASC 842") requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s leases, the incremental borrowing rate is used based on the information available at the commencement date in determining the present value of lease payments.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the Company’s leases as the reasonably certain threshold has not been met.

Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of an option to purchase the underlying asset if reasonably certain.

Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance is probable. Variable lease payments include the Company's proportionate share of utilities and other operating expenses and are presented as operating expenses in the Company’s consolidated statements of operations and comprehensive loss in the same line item as expense arising from fixed lease payments.

Stock-based compensation

The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, including grants of employee stock options and modifications to existing agreements, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values. The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The Company recognizes forfeitures as they occur.

The Company’s stock-based awards are subject to service-based vesting conditions. Compensation expense related to awards to employees and directors 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 awards generally vest over a one to three year requisite service period and have a contractual term of 10 years.

Estimating the fair value of options requires the input of subjective assumptions, including expected life of the 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.

F-12

Table of Contents

These assumptions used in Ocugen’s Black-Scholes option-pricing model are as follows:

Expected Term. Due to the historical lack of a public market for the trading of Ocugen common stock and the lack of sufficient company-specific historical data, the expected term of employee options is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option.

Expected Volatility. The expected volatility is based on historical volatilities of Ocugen and similar entities within Ocugen’s industry for periods commensurate with the expected term assumption.

Expected Dividends. The expected dividend yield is 0% because Ocugen has not historically paid, and does not expect for the foreseeable future to pay, a dividend on its common stock.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or the Company’s tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established.

The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Segment Information

As of December 31, 2020, the Company viewed its operations and managed its business as one operating segment consistent with how the Company's chief operating decision-maker, the Company's Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2020, substantially all of the Company's assets were located in the United States.

Recently Adopted Accounting Standards

In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements and was effective for the Company on January 1, 2020. The adoption of this standard did not have a material impact on the Company's disclosures.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This standard clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, ASC 606 guidance should be applied, including recognition, measurement, presentation, and disclosure requirements. The standard adds unit-of-account guidance to ASC 808 to align with the guidance in ASC 606 when an entity is assessing whether the collaborative arrangement or a part of the collaborative arrangement is within the scope of ASC 606. The standard also precludes a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties with revenue from contracts with customers recognized under ASC 606 if the collaborative arrangement participant is not a customer. This standard was effective for the Company on January 1, 2020. Consistent with the guidance in this standard, the Company assesses whether collaboration arrangements are within the scope of ASC 606. For collaboration arrangements that are not within the scope of ASC 606, applicable transactions with collaborative arrangement participants are presented as collaboration revenue rather than revenue from contracts with customers. See above and Note 4 for additional information.

F-13

Table of Contents

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company does not currently expect the adoption of these standards to have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard will have an effective date and transition date of January 1, 2021. This standard removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocations and calculating income taxes in interim periods. This standard also adds guidance to reduce complexity in certain areas, including recognizing franchise tax, recognizing deferred taxes for tax goodwill, allocating taxes to the members of a consolidated group and recognizing the effect of enacted changes in tax laws or rates during an interim period. The Company does not currently expect the adoption of this standard to have a material impact on its consolidated financial statements.

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 permitted beginning January 1, 2021. This standard simplifies an issuer's accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features as well as simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification. This standard also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential share settlement (if the effect is more dilutive) for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. The standard requires new disclosures about events that occur during the reporting period and cause conversion contingencies to be met and about the fair value of a public business entity's convertible debt at the instrument level, among other things. The Company does not currently expect the adoption of this standard to have a material impact on its consolidated financial statements.

3.Merger and Pre-Merger Financing

Pre-Merger Financing

In June 2019, OpCo and Histogenics entered into a Securities Purchase Agreement (as amended, the "Financing SPA") with certain accredited investors (the "Investors"). Pursuant to the Financing SPA, among other things, (i) immediately prior to the Merger, OpCo issued 2.2 million shares of common stock to the Investors, (ii) on October 4, 2019, the Company issued 2.2 million shares of the Company's common stock to the Investors and (iii) on October 4, 2019, the Company issued three series of warrants to purchase shares of the Company’s common stock (the “Series A Warrants,” the “Series B Warrants” and the “Series C Warrants” and collectively, the “Pre-Merger Financing Warrants”) in exchange for an aggregate purchase price of $25.0 million (the "Pre-Merger Financing"). See Note 11 for additional information.

Merger with Histogenics

On September 27, 2019, the Company completed the Merger in accordance with the terms of the Merger Agreement. The Merger was structured as a stock-for-stock transaction whereby all of OpCo’s outstanding shares of common stock and securities convertible into or exercisable for OpCo’s common stock were converted into the right to receive Histogenics’ common stock and securities convertible into or exercisable for Histogenics’ common stock. Immediately following the Merger, the former equity holders of OpCo owned 84.25% of the outstanding capital stock of the Company, and the equity holders of the Company immediately before the Merger owned 15.75% of the outstanding capital stock of the Company.

In accordance with FASB ASC Topic 805, Business Combinations (“ASC 805”), the Company concluded that, while Histogenics was the legal acquirer, OpCo was the accounting acquirer due to the fact that (i) OpCo’s shareholders had the majority of the voting rights in Ocugen, (ii) OpCo held all of the board seats of the combined company, and (iii) OpCo management held all key positions in the management of the combined company. The Company further concluded that Histogenics did not meet the definition of a business under ASC 805 due to the fact that substantially all of the fair value of the

F-14

Table of Contents

gross assets disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets. Therefore, the Merger was accounted for as a reverse asset acquisition.

NeoCart

Histogenics’ product, NeoCart, is an innovative cell therapy that utilizes various aspects of its restorative cell therapies platform to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. In December 2017, Histogenics entered into the License and Commercialization Agreement with MEDINET Co., Ltd. (“MEDINET”) to grant MEDINET a license under certain patents, patent applications, know-how, and technology to develop and commercialize certain therapeutic products related to the NeoCart program. In December 2018, after receiving feedback from the FDA regarding the need for an additional clinical trial prior to submission of a BLA, Histogenics discontinued the development of NeoCart.

In connection with the Merger, on May 8, 2019, Histogenics entered into an asset purchase agreement (the "Asset Purchase Agreement") with Medavate Corp., pursuant to which Histogenics agreed to sell substantially all of its assets relating to its NeoCart program for $6.5 million. The parties subsequently amended the Asset Purchase Agreement to increase the purchase price to $7.0 million with the purchase price increasing 10% per month (or any portion thereof) starting October 31, 2019 if the closing date of the Asset Purchase Agreement did not occur prior to October 31, 2019. The Company may terminate the Asset Purchase Agreement at any time without recourse. The Asset Purchase Agreement closing date did not occur as of December 31, 2020 and the Company has not terminated the Asset Purchase Agreement as of December 31, 2020.

The NeoCart asset was held for sale as of December 31, 2019. The NeoCart asset qualified as held for sale as of the date of the Merger and was carried at its original fair value less cost to sell based on a quoted price of $7.0 million, which was an observable Level 2 fair value input. The Company concluded during the year ended December 31, 2020, that a sale of the NeoCart asset was no longer probable to be completed within one year from the date of the Merger and therefore the NeoCart asset did not qualify as held for sale as of December 31, 2020. See Note 2 for additional information.

4. License and Development Agreements

Collaboration Agreement with Advaite, Inc.

In April 2020, the Company entered into a collaboration agreement (the “Advaite Agreement”) with Advaite, Inc. (“Advaite”) with respect to the development of Advaite’s RapCov COVID-19 Testing Kit (the “COVID-19 Test”). Advaite was co-founded and is being managed by Mr. Karthik Musunuri, the son of the Company's Chief Executive Officer, Chairman of the Board and co-founder, Dr. Shankar Musunuri. Pursuant to the Advaite Agreement, the Company has provided, and will continue to provide as required in the future, certain production, research and development, technical, regulatory, and quality support services to Advaite in connection with the development and commercialization of the COVID-19 Test (the “Ocugen Services”). Advaite is responsible for the research, development, and seeking to obtain regulatory approval of the COVID-19 Test, and where regulatory approval is obtained, commercialize the COVID-19 Test. In January 2021, the COVID-19 Test received EUA from the FDA.

Advaite will solely own all data and materials, including the COVID-19 Test, generated by the Company and its representatives solely in the course of the performance of the Ocugen Services. Advaite is responsible for all preparation and submission of regulatory materials for the COVID-19 Test to regulatory authorities, and Advaite holds all regulatory approvals of the COVID-19 Test in its name and owns all related submissions.

The Company is entitled to receive cost reimbursements from Advaite for (a) costs incurred by the Company related to its personnel who are subject matter experts involved in providing the Ocugen Services ("SME Costs"); and (b) Advaite's pro-rata share of all costs, other than SME Costs, incurred by the Company in providing the Ocugen Services. As partial consideration for the Company's performance of the Ocugen Services, Advaite will pay to the Company a quarterly royalty in the range of mid-to-high single digits based on net sales of the COVID-19 Tests.

The Advaite Agreement is a collaborative arrangement within the scope of ASC 808. Cost reimbursements are recorded as a reduction in research and development expense in the period incurred. Royalty payments are recorded as collaboration revenue in the period in which the underlying sale occurs. For the year ended December 31, 2020, the Company recorded $0.3 million as a reduction of research and development expense. For the year ended December 31, 2020, the Company recorded $42,620 as collaboration revenue in connection with the Advaite Agreement.

F-15

Table of Contents

The Advaite Agreement expires on April 29, 2021, unless extended upon mutual agreement of both the Company and Advaite. Except as otherwise specified in the terms of the Advaite Agreement, Advaite’s obligation to make royalty payments to the Company will survive expiration of the Advaite Agreement.

Co-Development and Commercialization Agreement with CanSino Biologics Inc.

In September 2019, Ocugen entered into a co-development and commercialization agreement (the “CanSinoBIO Agreement”) with CanSino Biologics Inc. (“CanSinoBIO”) with respect to the development and commercialization of the gene therapy product candidate, OCU400.

CanSinoBIO will be responsible for all the costs for chemistry, manufacturing and control development and manufacture of clinical supplies of OCU400 for all territories. CanSinoBIO will be solely responsible for all costs and expenses of its development activities in and for China, Hong Kong, Macau, and Taiwan (the "CanSinoBIO Territory") and Ocugen will be responsible for all costs and expenses of its development activities for any global location outside the CanSinoBIO Territory (the "Ocugen OCU400 Territory"). CanSinoBIO will pay to Ocugen an annual royalty between mid-to-high single digits based on net sales of products in the CanSinoBIO Territory, and Ocugen will pay to CanSinoBIO an annual royalty between low-to-mid single digits based on net sales of products in the Ocugen OCU400 Territory.

Unless terminated earlier, the CanSinoBIO Agreement will continue in force on a country-by-country and product-by-product basis until the later of (a) the expiration of the last valid claim of patent rights of Ocugen covering such product and (b) the tenth (10th) anniversary of the first commercial sale of such product in such country. The CanSinoBIO Agreement will also terminate upon the termination of the Exclusive License Agreement dated December 19, 2017, as amended, between Ocugen and The Schepens Eye Research Institute, Inc ("SERI"). The CanSinoBIO Agreement may be terminated by either party in its entirety upon (a) a material breach of the CanSinoBIO Agreement by the other party, (b) a challenge by the other party or any of its affiliates of any intellectual property controlled by the terminating party or (c) bankruptcy or insolvency of the other party. Within forty-five (45) days after such termination by CanSinoBIO under the circumstances described in clause (a) or (b), CanSinoBIO shall provide Ocugen with a statement of the CanSinoBIO development costs and, within one (1) year after receipt of such report, Ocugen shall reimburse CanSinoBIO all such CanSinoBIO development costs.

License Agreement with The Schepens Eye Research Institute

In December 2017, the Company entered into an exclusive license agreement with SERI, which was amended in January 2021 (as so amended the "SERI Agreement"). The SERI Agreement gives the Company an exclusive, worldwide, sublicensable license to patent rights, biological materials and technical information for nuclear hormone receptor genes Nuclear Receptor Subfamily 1 Group D Member 1, NR2E3 (OCU400), RORA (OCU410), Nuclear Protein 1, Transcriptional Regulator, and Nuclear Receptor Subfamily 2 Group C Member 1. The January 2021 amendment to the SERI Agreement additionally grants the Company rights in co-owned intellectual property pursuant certain patent applications and provisional patent applications. Under the SERI Agreement, the Company may make, have made, use, offer to sell, sell, and import licensed products. Under this agreement, the Company must use commercially reasonable efforts to bring one or more licensed products to market as soon as reasonably practicable. The Company is additionally party to a research agreement (the "Sponsored Research Agreement") with SERI, under which the Company incurs research and development expenses for work performed. The Sponsored Research Agreement will expire in June 2023. The Company may terminate the Sponsored Research Agreement at any time upon providing 60 days notice to SERI or upon mutual consent of both SERI and the Company.

SERI maintains control of patent preparation, filing, prosecution, and maintenance. The Company is responsible for SERI’s out-of-pocket expenses related to the filing, prosecution, and maintenance of the licensed patent rights. In the event that SERI decides to discontinue the prosecution or maintenance of the licensed patent rights, the Company has the right, but not the obligation, to file for, or continue to prosecute, maintain, or enforce such licensed patent rights.

The SERI Agreement is a collaborative arrangement within the scope of ASC 808. Payments pursuant to the SERI Agreement are recorded as research and development expense in the period the obligation is incurred. The SERI Agreement requires the Company to pay licensing fees for patent rights granted, an annual license maintenance fee of $25,000 the first two calendar years following the expiration or termination of the Sponsored Research Agreement and an annual license maintenance fee of $0.1 million for each calendar year thereafter, payment of up to $6.0 million upon the achievement of certain development and regulatory milestones, payment of up to $10.1 million upon the achievement of certain commercial milestones, and royalties in the low-single digits based on net sales. The Company has made no milestone or royalty payments to date pursuant to the SERI Agreement.

F-16

Table of Contents

The SERI Agreement will expire on the expiration date of the last to expire licensed patents right. The Company may terminate the license upon 180 days’ prior written notice. SERI may immediately terminate the SERI Agreement if the Company ceases to carry on its business with respect to the licensed patent rights, fail to make payments within thirty days of receiving a written notice of missed payment, fail to comply with the Company's diligence obligations, default on its obligation to procure and maintain insurance, one of its officers is convicted of felony related to the licensed products, the Company breaches any material obligation of the agreement and does not cure such breach within 90 days or if the Company becomes bankrupt or insolvent.

License Agreement with the University of Illinois at Chicago

In February 2016, the Company entered into an exclusive license agreement (the “UIC Agreement”) with the University of Illinois at Chicago ("UIC"). This agreement gave the Company an exclusive, worldwide, non-transferable, sublicensable license to patents and patent rights for OCU300 to make, have made, use, import, sell, and offer for sale products claimed by and/or incorporating or derived from the licensed patents. The UIC Agreement additionally gave the Company joint patent rights for patents and patent applications covering inventions or discoveries that were jointly conceived and reduced to practice by the Company and UIC.

As a result of the Company's discontinuation of the Phase 3 clinical trial for OCU300, the Company terminated the UIC Agreement effective in December 2020. Upon the termination of the UIC Agreement, all rights granted under the UIC Agreement reverted back to UIC. Joint patent rights for patents and patent applications covering inventions or discoveries that were jointly conceived by the Company and UIC remain co-owned by both the Company and UIC subsequent to the termination of the UIC Agreement.

License Agreement with the University of Colorado

In March 2014, the Company entered into an exclusive license agreement with University of Colorado ("CU"), which was amended in January 2017 and clarified by a letter of understanding in November 2017 (as so amended and clarified the “CU Agreement”). The CU Agreement gives the Company an exclusive, worldwide, sublicensable license to patents for OCU200 to make, have made, use, import, offer to sell, sell, have sold, and practice the licensed products in all therapeutic applications. Under the CU Agreement, the Company must use commercially reasonable efforts to develop, manufacture, sublicense, market, and sell the licensed products. Under the agreement, the Company assumed primary responsibility for preparing, filing, and prosecuting broad patent claims for OCU200 for CU's benefit. Further, the Company assumed primary responsibility for all patent activities, including all costs associated with the perfection and maintenance of the patents for OCU200.

The CU Agreement requires the payment of certain development and regulatory milestone aggregating to $1.5 million, annual minimum payments of $20,000 beginning in the third year after the effective date and increasing to a percentage rate in the mid-twenties of the previous year's royalty payments (as applicable), royalties in the low single digits on net sales, and royalties in the mid-teens on sublicense income of OCU200. The Company has made no milestone or royalty payments to date pursuant to the CU Agreement.

The CU Agreement will expire on the later of the expiration date of the last to expire licensed patent or the end of any relevant statutory or regulatory exclusivity period. The Company may terminate the CU Agreement upon 60 days’ prior written notice. CU may terminate the CU Agreement upon 60 days’ notice if the Company fails to make payments within 60 days of such payment’s due date, breach and do not cure any diligence obligation, provide any materially false report, or otherwise materially breach and do not cure any material provision of the CU Agreement.

F-17

Table of Contents

5.Property and Equipment

The major components of property and equipment as of December 31, 2020 and 2019 consist of the following:

As of December 31,

Depreciation expense during each of the years ended December 31, 2020 and 2019 was $0.1 million.

6.Leases

Operating Leases

The Company has commitments under operating leases for certain facilities used in its operations including for the use of laboratory, office, and storage space. On October 9, 2020 (the "Effective Date"), the Company entered into a lease agreement (the "Lease Agreement") with WPT Land 2 LP (the "Landlord") for a laboratory, office, and storage space located in Malvern, Pennsylvania. The Lease Agreement was determined to have two lease components per ASC 842, a laboratory space lease component (the "Initial Premises") and an office, storage, and future expanded laboratory space lease component (the "Expansion Premises"), with varying commencement dates. The Initial Premises commencement date occurred in December 2020. The Expansion Premises commencement date did not occur as of December 31, 2020. The Lease Agreement has an initial term of seven-years and the Company has the option to extend the Lease Agreement for one additional five-year term. The option for extension has been excluded from the lease term (and lease liability) for the Lease Agreement as the reasonably certain threshold is not met.

The Company had a former lease agreement with the Landlord for the Company's former office space. Pursuant to the terms of the Lease Agreement, the Company terminated the former lease agreement with the Landlord without penalty upon the commencement of the Expansion Premises in January 2021. The termination date of the former lease agreement is January 31, 2021 and the termination was accounted for as a modification per ASC 842 as the contractual lease term was shortened. The Company has no remaining lease payments as of December 31, 2020 for the former lease agreement. The Company additionally terminated the lease agreement for the Company's former laboratory space effective December 31, 2020. The Company has no remaining lease payments as of December 31, 2020 for the former laboratory space lease agreement.

The components of lease expense were as follows:

Year ended December 31,

F-18

Table of Contents

Supplemental balance sheet information related to leases was as follows:

As of December 31,

Supplemental information related to leases was as follows:

Year ended December 31,

Weighted-average remaining lease terms—operating leases (years) 6.9 2.0

Weighted-average discount rate—operating leases 4.6 % 7.6 %

Future minimum operating minimum lease payments, exclusive of taxes and other carrying charges, are approximately as follows:

For the years ending December 31, Amount

Less: present value adjustment (76,062)

Present value of minimum lease payments $ 433,565

_______________________

The future minimum operating lease payments excludes payments for the Expansion Premises for which the commencement date did not occur as of December 31, 2020. The estimated aggregate base rent payments for the Expansion Premises are $1.4 million.

Financing Leases

In June 2018, the Company leased specialized research equipment under a lease classified as a financing lease. The leased equipment is included in property and equipment, net and is amortized on a straight-line basis over five years. Financing lease liabilities are included in other liabilities on the Company's consolidated balance sheets. The interest rate related to the lease obligation is 7.6% and the maturity date is July 2021. The Company has a de minimis amount of remaining payments under the financing lease as of December 31, 2020.

F-19

Table of Contents

7.Accrued Expenses

Accrued Expenses are as follows:

As of December 31,

Accrued expenses:

_______________________

(1) See Note 8 for additional information regarding severance-related accrued expenses.

8.Exit and Disposal Activities

On June 15, 2020, the Company communicated notice to five employees of termination of their employment as a result of the Company's discontinuation of the Phase 3 clinical trial for OCU300. This reduction represented one-third of the Company’s workforce at the time of communication. All terminations were “without cause” and each employee received termination benefits upon departure. The termination dates varied for each employee and ranged from June 30, 2020 to December 31, 2020.

For the year ended December 31, 2020, the Company recognized $0.2 million of severance-related charges within general and administrative expense and $0.9 million of severance-related charges within research and development expense. The Company expects to pay severance benefits of $0.7 million during 2021.

The following table outlines the components of the severance-related charges:

Amount

Accrued Severance at December 31, 2019 $ —

Severance-related payments (404,083)

9.Equity Transactions

At-the-Market Offerings

During the year ended December 31, 2020, the Company sold an aggregate of 108.1 million shares of common stock in separate ATMs commenced in May 2020, June 2020, and August 2020. During the year ended December 31, 2020, the Company sold 34.3 million shares under the May 2020 ATM, 24.8 million shares under the June 2020 ATM, and 49.0 million shares under the August 2020 ATM. During the year ended December 31, 2020, the Company received net proceeds of $36.3 million, after deducting commissions, fees and expenses of $1.5 million.

The offerings were made pursuant to the Company's effective "shelf" registration statement on Form S-3 filed with the SEC on March 27, 2020, the base prospectus contained therein dated May 5, 2020, and the prospectus supplements related to the offerings dated May 8, 2020, June 12, 2020, and August 17, 2020. As of December 31, 2020, the Company had sold all of the shares of common stock available for issuance under the prospectus supplements filed on May 8, 2020 and June 12, 2020 in connection with the May 2020 and June 2020 ATMs. As of December 31, 2020, the Company had remaining capacity to issue

F-20

Table of Contents

up to $8.3 million of common stock under the prospectus supplement filed on August 17, 2020 in connection with the August 2020 ATM.

Subscription Agreements

On June 6, 2020, the Company entered into a subscription agreement with an accredited investor for the issuance of 1.3 million shares of the Company's common stock in a private placement. The shares of common stock were issued as part of a transaction in settlement of an outstanding obligation of the Company to the accredited investor, in which (i) the Company agreed to make certain cash payments, (ii) the Company issued the 1.3 million shares of common stock in exchange for the accredited investor's agreement to cancel $0.3 million of the outstanding obligation and (iii) the accredited investor agreed to cancel an additional portion of the amount owed by the Company representing a discount of $0.2 million.

On April 22, 2020, the Company entered into a subscription agreement with an accredited investor for the sale of 1,000 shares of the Company's common stock in a private placement for an aggregate offering price of $395. This private placement constituted a Dilutive Issuance (as defined in Note 11) and resulted in adjustments to the Series A Warrants.

On April 5, 2019, OpCo entered into a subscription agreement (the "April 2019 Subscription Agreement") with existing investors for the sale of 0.1 million shares of common stock for $1.0 million, including the sale of 40,286 shares of common stock for $0.5 million to a member of the Board of Directors. This capital raise triggered the conversion features on the convertible debt described further in Note 10.

10.Debt

The following table provides a summary of the carrying values for the components of debt as reflected on the consolidated balance sheets:

As of December 31,

PPP Note

On April 30, 2020, the Company was granted a loan from Silicon Valley Bank ("SVB"), in the aggregate amount of $0.4 million, pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”). On June 5, 2020, the PPP Flexibility Act of 2020 (the "PPPFA") was signed into law amending the original terms of the PPP. Among other things, the PPPFA extended the deferral period for monthly principal and interest payments from six months to either (i) the date the Small Business Administration ("SBA") compensates the lender for any forgiven amounts or (ii) 10 months after the end of the borrower's loan forgiveness covered period. The PPPFA also extended the covered period for qualifying expenses from eight weeks to the earlier of 24 weeks or December 31, 2020. Certain amounts of the loan may be forgiven if they are used for qualifying expenses as described by the CARES Act.

The loan was in the form of a promissory note dated April 30, 2020 in favor of SVB (the "PPP Note"). The PPP Note matures on April 30, 2022 and bears interest at a rate of 1.0% per annum. Principal and interest payments are payable monthly commencing on either (i) the date the SBA compensates SVB for any forgiven amounts or (ii) 10 months after the end of the Company's covered period, which ended in October 2020. If the PPP Note is fully forgiven, the Company will not be responsible for any payments. The Company did not provide any collateral or guarantees for the loan, nor did the Company pay any facility charge to obtain the loan. The PPP Note provides for customary events of default, including, among others, failure to make payment, bankruptcy, breaches of representations, and material adverse events.

At December 31, 2020, the carrying value of the PPP Note was $0.4 million.

Warrant Exchange Promissory Notes

On April 22, 2020, in connection with the Warrant Exchange (as defined in Note 11), the Company issued to Investors certain promissory notes (the "Warrant Exchange Promissory Notes") with an aggregate principal amount of $5.6 million. The Warrant

F-21

Table of Contents

Exchange Promissory Notes had a maturity date of April 21, 2021 and did not bear interest. The Warrant Exchange Promissory Notes were recorded at a fair value of $5.0 million. The difference of $0.6 million between the fair value and the aggregate principal amount of $5.6 million was recorded as a debt discount and accreted to interest expense over the life of the Warrant Exchange Promissory Notes. The accretion amounted to $0.6 million for the year ended December 31, 2020.

The Company was entitled to prepay the Warrant Exchange Promissory Notes in whole or in part at any time without penalty or premium. In the event that the Company consummated a financing transaction that generated cash to the Company, the Company was required to use 20% of the net proceeds of such transaction to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if the transaction occurred on or prior to August 22, 2020, and 30% of the net proceeds to prepay a portion of the outstanding amount under each Warrant Exchange Promissory Note if that transaction occurred after August 22, 2020. As a result of the net proceeds from the ATMs discussed in Note 9 , the Company made payments to the Warrant Exchange Promissory Note holders of $5.6 million during the year ended December 31, 2020, causing the Warrant Exchange Promissory Notes to be repaid in full and no longer outstanding at December 31, 2020.

EB-5 Loan

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. Borrowing may be limited by the amount of funds raised by the EB-5 Life Sciences and are subject to certain job creation requirements by the Company. Borrowings are at a fixed interest rate of 4.0% per annum and are to be utilized in the clinical development, manufacturing, and commercialization of the Company’s products 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 license, patent sublicense, trademarks, and other intellectual property rights.

Under the terms and conditions of the EB-5 Loan Agreement, the Company borrowed $1.0 million in 2016 and an additional $0.5 million on March 26, 2020. Issuance costs were recognized as a reduction to the loan balance and are amortized to interest expense over the term of the loan.

The carrying values of the EB-5 Loan Agreement borrowings as of December 31, 2020 and 2019 are summarized below:

As of December 31,

Less: unamortized debt issuance costs (45,306) (55,654)

Senior Secured Convertible Notes

On May 21, 2019, the Company issued senior secured convertible notes to certain investors for $2.4 million at an original issue discount of $0.5 million, and on June 28, 2019, the Company entered into an agreement to issue additional senior secured convertible notes to the investors for $2.9 million with an original issue discount of $0.4 million (together the "Senior Secured Convertible Notes"). Immediately prior to the Merger, the Investors offset $5.3 million from the amount to be received under the Pre-Merger Financing and the Senior Secured Convertible Notes were deemed to have been repaid and cancelled. The accretion of the original issue discount to interest expense amounted to $0.8 million during the year ended December 31, 2019.

Convertible Promissory Notes

On April 4, 2019, the Company issued a convertible promissory note (the "Convertible Promissory Note") to an existing stockholder for $0.9 million at an interest rate of 5% per annum. On May 16, 2019, the Convertible Promissory Note was converted into equity. OpCo issued 0.1 million shares of common stock at the conversion date to extinguish the debt at $12.41 per share. This non-cash transaction resulted in an increase of $0.9 million in additional paid-in capital, which was based on the principal balance outstanding and the unpaid interest upon conversion.

F-22

Table of Contents

Convertible Notes

During the years ended December 31, 2019 and 2018, the Company issued convertible notes (the “Convertible Notes”) to new and existing stockholders in the Company, including Convertible Notes in the aggregate principal amount of $3.5 million to members of the Board of Directors. As of December 31, 2019, all of the Convertible Notes had been converted and were no longer outstanding.

At issuance, the following amounts were recorded:

All Convertible Notes accrued interest at a rate of 5% per annum and had scheduled maturity dates on the eighteen month anniversary of the date of the issuance of the Convertible Notes (the “Maturity Date”). If prior to the Maturity Date, there was a consummation of the sale of all or substantially all of the assets of the Company, change in control, or event of default, the Convertible Notes would become due and payable at an amount equal to 1.5 times the principal amount of the Convertible Notes together with all accrued interest (the “Change in Control Feature”).

If the Company received equity financing from the issuance of stock of the Company from an investor or group of investors in a transaction or series of related transactions above a certain amount of gross proceeds, the principal amount and all interest accrued but not paid through the closing date of the qualified equity financing was to automatically convert into the same class of equity securities as those issued in the qualified equity financing ("Conversion Feature"). The price per share varied among the Convertible Notes ranging from a 0% to 30% discount to the lowest price per share being paid by investors in the qualified equity financing.

The Company bifurcated the Conversion Feature for the January 2018, June 2018, January 2019, and February 2019 Convertible Notes and classified it as a derivative liability because the conversion feature did not have a fixed conversion price and conversion would be settled in a variable number of shares of common stock. There was no bifurcated conversion feature for the November 2018 and December 2018 Convertible Notes as there is no discount to the lowest equity price triggering conversion. The Company also bifurcated the Change in Control Feature for all of the Convertible Notes because it was determined to be a redemption feature not clearly and closely related to the debt host.

The fair value of both of the embedded features was accounted for as a derivative liability and was recorded as a discount on the Convertible Notes with subsequent changes in fair value recorded on the Company’s consolidated statements of operations and comprehensive loss as other income (expense). The fair value at the issuance of each Convertible Note and at the end of each reporting period were estimated using an income approach model. Inputs used in the valuation were unobservable and therefore considered Level 3 in the fair value hierarchy. The debt discount was accreted into interest expense over the expected time until conversion of the Convertible Notes. The accretion amounted to $0.6 million for the year ended December 31, 2019. There was no accretion during the year ended December 31, 2020 as all Convertible Notes had been converted and were no longer outstanding as of December 31, 2019.

As a result of the April 2019 Subscription Agreement as described and defined within Note 9, the triggers for conversion were met on the Convertible Notes. On April 5, 2019, the Convertible Notes were modified to change the discount percentage from the 0% discount per the terms of the November 2018 and December 2018 Convertible Notes and the 15% discount per the terms of the January 2019 and February 2019 Convertible Notes to 30% at the time of conversion. The Company issued 1.1 million shares of common stock at $8.69 per share on the date of conversion to extinguish the debt, which resulted in a loss of $0.3 million. This non-cash conversion also resulted in an increase of $13.0 million in additional paid-in capital, which was based on the principal balance outstanding and the unpaid interest upon conversion.

F-23

Table of Contents

Principal Maturities

Debt maturities (excluding interest) are summarized below:

For the years ending December 31,

11.Warrants

Pre-Merger Financing Warrants

On September 27, 2019, Ocugen completed the Merger with OpCo. Immediately prior to the Merger, Ocugen and OpCo completed the Pre-Merger Financing, a previously announced private placement transaction with certain Investors pursuant to the Financing SPA, whereby, among other things, the Company agreed to issue the Pre-Merger Financing Warrants.

On November 5, 2019, the Company entered into an agreement with each Investor that amended the terms of each of the Pre-Merger Financing Warrants held by each such Investor (collectively, the “Warrant Amendments”). The terms of the Pre-Merger Financing Warrants and the Warrant Amendments are discussed below. There were no Pre-Merger Financing Warrants outstanding at December 31, 2020.

Series A Warrants

The Series A Warrants had an initial exercise price per share of $7.13, were exercisable upon issuance, and had a term of 60 months from the date of issuance. The Series A Warrants were exercisable for up to 8.8 million shares of Ocugen common stock.

The Series A Warrants had an anti-dilution adjustment whereby if Ocugen had issued or sold, entered into a definitive, binding agreement pursuant to which Ocugen would have been required to issue or sell or would have been deemed, pursuant to the provisions of the Series A Warrants, to have issued or sold, any common stock for a price per share lower than the exercise price then in effect (a “Dilutive Issuance”), subject to certain limited exceptions, then (i) the exercise price of the Series A Warrants would have been reduced to such lower price per share and (ii) the number of shares issuable upon exercise of the Series A Warrants would have been increased to the number of shares of common stock determined by multiplying (a) the exercise price in effect immediately prior to such Dilutive Issuance by (b) the number of shares of common stock issuable upon exercise of the Series A Warrants immediately prior to such Dilutive Issuance (without giving effect to any limitation on exercise contained therein), and dividing the product thereof by the exercise price resulting from such Dilutive Issuance.

All of the Series A Warrants were outstanding and exercisable as of December 31, 2019. Pursuant to the Warrant Exchange (as defined below), no Series A Warrants were outstanding as of December 31, 2020.

Series B Warrants

The Series B Warrants had an exercise price of $0.01, were exercisable after the completion of a 10 trading-day period following the effectiveness of a registration statement covering the resale of common stock into which such warrants were exercisable and were to expire on the date on which the Series B Warrants have been exercised in full (without giving effect to any limitation on exercise contained therein) and no shares remain issuable thereunder. The Series B Warrants were initially exercisable by the holders for 8.0 million shares of common stock.

Additionally, each Series B Warrant included a Reset Period pursuant to which the number of shares issuable upon exercise of the Series B Warrants was increased during certain Reset Periods (as defined in the Series B Warrants). The Reset Period concluded in November 2019 and resulted in an aggregate of 12.6 million additional shares of common stock becoming issuable upon exercise of the Series B Warrants. There were 1,000 Series B Warrants outstanding at December 31, 2019. There were no Series B Warrants outstanding at December 31, 2020.

F-24

Table of Contents

Series C Warrants

The Series C Warrants were exercisable upon issuance for up to 50.0 million shares of common stock at an initial exercise price of $7.13 per share. Each of the Series C Warrants was amended pursuant to the Warrant Amendments to permit the Investors, in lieu of making any cash payment otherwise contemplated to be made to the Company upon the exercise of the Series C Warrant, to elect instead to receive upon such exercise up to 20.0 million shares of common stock. Prior to the Warrant Amendments, the Series C Warrants had permitted the exercise without any cash payment of up to 50.0 million shares of common stock in the event that the volume weighted-average price of the common stock on Nasdaq was less than or equal to $1.20 per share on any five trading days following the issuance of the Series C Warrants. There were 1,000 Series C Warrants outstanding at December 31, 2019. There were no Series C Warrants outstanding at December 31, 2020.

Accounting for the Pre-Merger Financing Warrants

As of December 31, 2019, the Pre-Merger Financing Warrants were classified as equity. At issuance, the Series B Warrants were classified as a liability on the consolidated balance sheet as they did not meet the derivative scope exception to be accounted for within stockholders' equity. The Series B Warrants were initially measured at fair value and marked to market each reporting period. Upon the completion of the Reset Period in November 2019, the Series B Warrants were reassessed and determined to meet the derivative scope exception allowing for equity classification. The Series B Warrants were marked to market a final time and the remaining liability balance was reclassified to equity.

The fair value of the Series B Warrants was calculated using a Monte Carlo simulation while estimating the stock price during the Reset Period, based on the terms described within the Financing SPA. Key fair value inputs included the starting stock price, expected stock volatility during the Reset Period, and additional shares issued from escrow. The methodology for measuring fair value was sensitive to the expected stock volatility assumption input. The volatility used in the fair value estimate at issuance was 96.0%. Inputs used in the valuation were unobservable and were therefore classified as Level 3 fair value inputs. The fair value of the Series B Warrants upon the end of the Reset Period was based on a Black-Scholes valuation model, which is classified as Level 3 in the fair value hierarchy.

The following table provides a roll-forward of the Series B Warrant liability:

OCGN US Equity

OCGN · 10-K · period ended 2020-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 10. Directors, Executive Officers, and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principle Accountant Fees and Services.

Item 15. Exhibits, Financial Statements

Item 16. 10-K Summary

OCGN US Equity☆

OCGN · 10-K · period ended 2020-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 10. Directors, Executive Officers, and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principle Accountant Fees and Services.

Item 15. Exhibits, Financial Statements

Item 16. 10-K Summary

OCGN US Equity