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. Except as required by law, 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.

Overview

We are a clinical-stage 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 Candidate — 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. and Canadian markets.

•Modifier Gene Therapy Platform — Based on nuclear hormone receptors ("NHRs"), we believe our modifier 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 Therapy 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 Candidate

In February 2021, we entered into a Co-Development, Supply and Commercialization 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 caused by SARS-CoV-2 in the United States, its territories, and possessions. In June 2021, we entered into an amendment to the Co-Development, Supply and Commercialization Agreement (as so amended, the "Covaxin Agreement") pursuant to which we and Bharat Biotech agreed to expand our rights to develop, manufacture, and commercialize COVAXIN to include Canada in addition to the United States, its territories, and possessions (the "Ocugen Covaxin Territory").

COVAXIN is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. COVAXIN requires a two-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). COVAXIN has been authorized or approved in more than a dozen countries and was granted an Emergency Use Listing by the World Health Organization in November 2021. Over 295 million doses globally have been administered to date.

The Phase 3 clinical trial conducted by Bharat Biotech in India in 25,798 adults, who were healthy or had stable chronic medical conditions ages 18 years and older, reported an overall estimated vaccine efficacy of COVAXIN against COVID-19 infection of 77.8%, with efficacy against severe COVID-19 infection of 93.4%, and efficacy against asymptomatic COVID-19 infection of 63.6%. Approximately 30% of participants were seropositive at baseline in each dosing group and were excluded from the per protocol analysis but contributed to the safety dataset. COVAXIN was generally well tolerated, with no clinically or statistically significant differences in reported adverse events in the vaccine and placebo groups. Additionally, a Phase 2/3 immuno-bridging clinical trial was conducted by Bharat Biotech in India to assess the protective immunity of COVAXIN in children ages two to 18 years. The results demonstrated a robust neutralizing antibody response comparable to that of the adults studied in the Phase 3 clinical trial, and that COVAXIN was generally well tolerated. This study demonstrated a favorable safety profile, including no hospitalizations, myocarditis, or vaccine-induced thrombotic thrombocytopenia. Additionally, data from the clinical trials and from research conducted by third parties has shown that COVAXIN has neutralizing potential against multiple variants of concern including both the Omicron (B.1.1.529) and Delta (B.1.617.2) variants.

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In June 2021, the U.S. Food and Drug Administration (the "FDA") provided feedback to us regarding the data and information contained in a "Master File" that we previously submitted to the FDA and recommended that we pursue a Biologics License Application ("BLA") submission instead of the Emergency Use Authorization ("EUA") application for COVAXIN for adults ages 18 years and older in the United States. As part of the feedback provided, the FDA requested additional information and data. In October 2021, we submitted an Investigational New Drug ("IND") application to the FDA to initiate a Phase 2/3 immuno-bridging and broadening clinical trial evaluating COVAXIN for ages 18 years and older. The clinical trial is designed to evaluate whether the immune response experienced in participants in the aforementioned completed Phase 3 clinical trial in India is similar to a demographically representative, adult population in the United States. In November 2021, we were notified that the FDA issued a clinical hold on our IND application. In December 2021, the FDA sent us a letter setting forth the reasons for the clinical hold and specific guidance on steps that must be taken to have the clinical hold lifted. We provided the FDA responses to their comments and the FDA lifted its clinical hold in February 2022. We plan to initiate the Phase 2/3 immuno-bridging and broadening clinical trial for COVAXIN as soon as we are able to. We also plan to initiate a safety-bridging clinical trial in the first half of 2022, subject to discussions with the FDA. Subject to the foregoing, we anticipate submitting a BLA with the FDA near the end of 2022. In November 2021, we also submitted a request to the FDA for EUA for COVAXIN for pediatric use in ages two to 18 years in the United States. The EUA submission was based on the results of the aforementioned Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India. Our EUA submission is currently under review by the FDA. In February 2022, Delta and Omicron neutralization results along with a safety database of more than 36 million teenagers who had been vaccinated with COVAXIN were submitted to the FDA to support our EUA submission.

We are also pursuing approval for COVAXIN in Canada. In July 2021, we completed our rolling submission to Health Canada for COVAXIN. The rolling submission process, which permits companies to submit safety and efficacy data and information as they become available, was recommended and accepted under the Minister of Health’s Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 and transitioned to a New Drug Submission ("NDS") for COVID-19. The submission was conducted through our Canadian subsidiary, Vaccigen Ltd. We are in discussions with Health Canada regarding our NDS submission for COVAXIN. In December 2021, we were provided with a Notice of Deficiency ("NOD") from Health Canada regarding our NDS submission. Health Canada requested further analyses of the COVAXIN preclinical and clinical data, as well as additional information regarding chemistry, manufacturing, and controls ("CMC"). We have responded to and provided proposed resolutions for the deficiencies included in the NOD. Our responses are currently under review by Health Canada.

We are evaluating our commercialization strategy for COVAXIN in the United States and Canada, if authorized or approved in either jurisdiction. In June 2021, we selected Jubilant HollisterStier as our manufacturing partner for COVAXIN to prepare for the potential commercial manufacturing for the Ocugen Covaxin Territory. We expect to enter into a master services agreement with Jubilant HollisterStier for the commercial manufacture of COVAXIN. The technology transfer process from Bharat Biotech to Jubilant HollisterStier for drug product manufacturing has been initiated. We expect to complete qualification manufacturing runs at Jubilant HollisterStier by mid-2022.

In September 2021, we entered into a Development and Commercial Supply Agreement with Bharat Biotech, pursuant to which Bharat Biotech will supply us with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the completion of a technology transfer. Following the completion of a technology transfer, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for the commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval.

Modifier Gene Therapy Platform

We are developing a modifier gene therapy platform designed to fulfill unmet medical needs in the area of retinal diseases, including inherited retinal diseases ("IRDs"), such as RP and LCA, 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 modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential to address multiple retinal diseases caused by mutations in multiple genes with one product; and potentially address complex diseases, such as dry AMD, that are potentially caused by imbalances in multiple gene networks.

IRDs, such as RP and LCA, can lead to visual impairment and blindness and affect over two million people worldwide. RP and LCA are rooted in mutations of more than 175 different genes. We believe that OCU400, our first product candidate being developed with our modifier gene therapy platform, has the potential to be broadly effective in restoring retinal integrity and function across a range of IRDs, including RP and LCA. For example, we believe OCU400 has the potential to eliminate the need for developing more than 175 individual products and provide one treatment option for all RP and LCA patients. OCU400 has received four Orphan Drug Designations from the FDA for the treatment of certain disease genotypes: nuclear receptor

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subfamily 2 group E member 3 ("NR2E3"), centrosomal protein 290 ("CEP290"), rhodopsin ("RHO"), and phosphodiesterase 6B ("PDE6ß") mutation-associated inherited retinal degenerations. In November 2021, we submitted an IND application to the FDA for OCU400 for the treatment of the NR2E3 and RHO disease genotypes. Our IND application was accepted by the FDA in December 2021. We have initiated a Phase 1/2 clinical trial in the United States for the treatment of these disease genotypes and the first patient is expected to be dosed in the first half of 2022. This Phase 1/2 clinical trial is a multicenter, open-label, dose ranging study to assess the safety of unilateral subretinal administration of OCU400 in subjects with NR2E3-related RP. OCU400 has additionally received Orphan Medicinal Product Designation from the European Commission, based on the recommendation of the European Medicines Agency, for RP and LCA. We believe OCU400 has the potential for broad-spectrum application to treat many IRDs. We are currently evaluating options to initiate OCU400 clinical trials in Europe.

Our 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. We are currently executing pre-IND studies consistent with FDA discussions to support a Phase 1/2 clinical trial. We have engaged CanSino Biologics, Inc. to manufacture clinical supplies and be responsible for the CMC development for OCU400 and OCU410.

Novel Biologic Therapy for Retinal Diseases

Our pipeline also includes our biologic product candidate, OCU200, a novel fusion protein designed to treat severely sight-threatening diseases such as DME, DR, and wet AMD. We are currently establishing a current Good Manufacturing Practice process for the production of clinical trial materials and executing pre-IND studies consistent with FDA discussions to support a Phase 1/2a clinical trial. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization that will manufacture OCU200 clinical supplies.

Impact of COVID-19 on our Business

The COVID-19 pandemic had an impact on our operations during 2021. For example, during the first half of 2021, India experienced a surge in COVID-19 infections, which created significant uncertainty as to the timing of completion for Bharat Biotech’s Phase 3 clinical trial, due in part to the diversion of medical resources and supplies of COVAXIN in India. During this time, we experienced delays in our receipt of certain additional data from Bharat Biotech’s Phase 3 clinical trial, which created uncertainty regarding our ability to timely submit required documentation to the FDA for COVAXIN. In addition, the COVID-19 pandemic adversely impacted many of the companies within our supply chain and other third parties upon which we rely to conduct our business.

The COVID-19 pandemic is continually evolving and we are closely monitoring the situation. Impacts from the COVID-19 pandemic remain highly uncertain and subject to change and, as such, we cannot predict the specific duration or impact that the COVID-19 pandemic may have on our operations going forward, including our preclinical activities, future clinical trials, and potential commercialization. The extent to which the COVID-19 pandemic may impact our operations is dependent on future developments, including but not limited to: (i) the duration of the spread of the SARS-CoV-2 virus, including the spread of variants, (ii) the future actions taken by governmental authorities and regulators with respect to the COVID-19 pandemic, and (iii) the impact on our partners, collaborators, and suppliers. We will continue to monitor the situation closely as these effects could have a material impact on our operations.

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 net losses in each year since inception. We incurred net losses of approximately $58.4 million, $21.8 million, and $20.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, we had an accumulated deficit of $131.7 million and a cash, cash equivalents, and restricted cash balance of $95.1 million. Substantially all of our net losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Segment Information

As of December 31, 2021, 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, 2021, substantially all of our assets were located in the United States. Our headquarters and operations are located in Malvern, Pennsylvania.

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Research and development expense

Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities. 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 preclinical studies and clinical trials, based on our evaluation of the progress to completion of specific tasks. 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 applicable. Our recording of costs for certain development activities requires us to use estimates. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates.

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 candidates. We anticipate that our research and development expenses will be higher in fiscal year 2022 and subsequent periods as compared to the prior periods presented herein as we prepare for the commercialization of COVAXIN in the United States and Canada, if authorized or approved, as well as conduct preclinical and clinical activities with respect to our product candidates.

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 developments as well as regulatory approval (or authorization) 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 as regulatory authorization or approval and commercialization are uncertain and may not result in authorized or approved and commercialized products. Completion dates and completion costs can vary significantly for each 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 candidate.

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, commercialization, human resources, and other administrative functions. General and administrative expense also includes expenses related to pre-commercial activities, corporate facility costs, such as allocated 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 fiscal year 2022 as compared to the prior periods presented herein as a result of higher corporate infrastructure costs including, but not limited to accounting, legal, human resources, consulting, investor relations, and public company insurance fees. Additionally, we anticipate an increase in general and administrative expenses as we prepare to support the potential commercialization of COVAXIN, if authorized or approved.

Change in fair value of derivative liabilities

The change in fair value of derivative liabilities was $3.2 million during the year ended December 31, 2019. This change in fair value of derivative liabilities was related to certain convertible notes issued in 2018 and 2019 (the "Convertible Notes") containing embedded conversion and change-in-control features, which were recorded at fair value as derivative liabilities and revalued at each reporting date as well as the Series B Warrants that were issued in connection with a Securities Purchase Agreement entered into with certain accredited investors in June 2019 and were classified as derivative liabilities at issuance and reevaluated each reporting period until they met the derivative scope exception allowing for stockholders' equity classification during the year ended December 31, 2019. The Convertible Notes were extinguished during the year ended

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December 31, 2019. There were no derivative instruments revalued on a recurring basis during the years ended December 31, 2021 and 2020.

Results of Operations

The following discussion and analysis of our results of operations includes a comparison of the year ended December 31, 2021 to the year ended December 31, 2020. For the discussion and analysis of our results of operations for the year ended December 31, 2020 compared with the year ended December 31, 2019, refer to Part II, Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission ("SEC") on March 19, 2021 (the "2020 Form 10-K"), which is incorporated herein by reference.

Year ended December 31,

Revenues

Collaboration revenue $ — $ 43 $ (43)

Total revenues — 43 (43)

Operating expenses

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

Income tax benefit (52) — (52)

Research and development expense

Research and development expense increased by $28.8 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The increase was primarily due to the $15.0 million upfront payment to Bharat Biotech in connection with the amendment to the Covaxin Agreement to add rights to the Canadian market in June 2021 as well as increases of $4.6 million in COVAXIN development, regulatory, and manufacturing activities, $3.1 million in OCU400 preclinical and clinical activities, $2.8 million in employee-related expenses, $1.7 million in stock-based compensation expense, and $1.6 million in OCU200 preclinical activities. The increases were partially offset by a $1.1 million decrease for the discontinuation of a product candidate in 2020.

In-process research and development expense

In-process research and development expense decreased by $7.0 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The decrease was due to the write-off of an intangible asset held for sale during the year ended December 31, 2020 as a sale of the intangible asset was deemed not probable to be completed within one year from the date the intangible asset was initially recorded as held for sale.

General and administrative expense

General and administrative expenses increased by $14.9 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The increase was primarily due to increases of $4.6 million in stock-based compensation expense, $3.0 million in expenses for stockholder meetings and proxy solicitation, $2.5 million in professional expenses, including legal and consulting fees, $2.3 million in employee-related expenses, and $1.3 million in COVAXIN pre-commercial expenses.

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Total Other Income (Expense)

Total other income (expense) decreased by $0.1 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. Other income (expense) during the year ended December 31, 2021 primarily relates to $0.8 million related to a loss on the write-off of the Promissory Note (as defined in Note 4 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K) deemed uncollectible, partially offset by a gain on loan extinguishment of $0.4 million for the PPP Note (as defined in Note 8 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K) forgiveness obtained in May 2021. Other income (expense) during the year ended December 31, 2020 primarily relates to debt discount interest expense on the Warrant Exchange Promissory Notes (as defined in Note 10 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K) of $0.6 million, offset by the recognition of $0.2 million in deferred grant proceeds.

Liquidity and Capital Resources

As of December 31, 2021, we had $95.1 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. Since our inception and through December 31, 2021, we have raised an aggregate of $219.6 million to fund our operations, of which $206.9 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $2.2 million was from debt, and $0.2 million from grant proceeds.

In February 2022, we issued and sold 16.0 million shares of our common stock at an offering price of $3.13 per share in a public offering and received net proceeds of $49.8 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. In April 2021, we issued and sold 10.0 million shares of our common stock at an offering price of $10.00 per share in a registered direct offering pursuant to a securities purchase agreement with certain institutional investors (the "April 2021 Registered Direct Offering") and received net proceeds of $93.4 million. In February 2021, we issued and sold 3.0 million shares of our common stock at an offering price of $7.65 per share in a registered direct offering pursuant to a securities purchase agreement with certain institutional investors ("February 2021 Registered Direct Offering") and received net proceeds of $21.2 million. Additionally, during the year ended December 31, 2021, we sold 1.0 million shares of our common stock under an at-the-market offering ("ATM") and received net proceeds of $4.8 million. During the year ended December 31, 2020, we sold 108.1 million shares of our common stock under ATMs and received net proceeds of $36.3 million. See Note 9 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on our equity issuances.

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 $58.4 million, $21.8 million, and $20.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, we had an accumulated deficit of $131.7 million. In addition, as of December 31, 2021, we had accounts payable and accrued expenses and other current liabilities of $6.6 million and indebtedness of $1.7 million.

The following discussion and analysis of a summary of our cash flows includes a comparison of the year ended December 31, 2021 to the year ended December 31, 2020. For the discussion and analysis that compares our summary of cash flows for the year ended December 31, 2020 with the year ended December 31, 2019, refer to Part II, Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our 2020 Form 10-K, which is incorporated herein by reference.

Year ended December 31,

Net cash used in operating activities $ (47,941) $ (14,709)

Net cash used in investing activities (1,816) (307)

Net cash provided by financing activities 120,676 31,611

Net increase in cash, cash equivalents, and restricted cash $ 70,919 $ 16,595

Operating activities

Cash used in operating activities was $47.9 million for the year ended December 31, 2021 compared with $14.7 million for the year ended December 31, 2020. The increase in cash used in operating activities was primarily driven by the $15.0 million

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upfront payment to Bharat Biotech in connection with the amendment to the Covaxin Agreement to add rights to the Canadian market in June 2021, an increase in our research and development expenses for our product candidates, specifically clinical trial and manufacturing expenses related to COVAXIN, an increase in employee-related expenses as we expand our headcount and continue to provide competitive compensation plans to support our development, commercialization, and business efforts, and an increase in expenses for stockholder meetings and proxy solicitation.

Investing activities

Cash used in investing activities was $1.8 million for the year ended December 31, 2021 compared with $0.3 million for the year ended December 31, 2020. The increase in cash used by investing activities was primarily driven by an increase of $0.6 million in purchases of property and equipment and the issuance of the Promissory Note (as defined in Note 4 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K) of $0.8 million.

Financing activities

Cash provided by financing activities was $120.7 million for the year ended December 31, 2021 compared to $31.6 million for the year ended December 31, 2020. During the year ended December 31, 2021, cash provided by financing activities primarily consisted of gross proceeds of $100.0 million and $22.9 million received from the April 2021 Registered Direct Offering and the February 2021 Registered Direct Offering, respectively, and gross proceeds of $5.0 million received under an ATM, partially offset by payments of equity issuance costs of $8.5 million. During the year ended December 31, 2020, cash provided by financing activities primarily consisted of gross proceeds of $37.8 million received under 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.

Contractual Obligations

Licensing and Development Agreements

We have obligations under certain license and development agreements for our product candidates including annual payments, payments upon the achievement of certain milestones, and royalty payments based on net sales of licensed products. See Note 3 in the notes to the consolidated financial statements included in elsewhere in this Annual Report on Form 10-K for information regarding our obligations under licensing and development agreements.

Lease Obligations

We have obligations under our operating leases, which include leased office, laboratory, and storage space, located in Malvern, Pennsylvania. As of December 31, 2021, we had future minimum operating lease base rent payment obligations of $1.8 million, with $0.4 million payable within 12 months related to leases that have commenced. See Note 6 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under lease obligations, including the aggregate estimated base rent payments for the lease not yet commenced.

Indebtedness

We have outstanding debt related to the funds borrowed from EB5 Life Sciences, L.P. ("EB-5 Life Sciences") pursuant to the U.S. government's Immigrant Investor Program, commonly known as EB-5 program. Pursuant to the EB-5 loan agreement entered into with EB-5 Life Sciences, we can borrow up to $10.0 million in $0.5 million increments. Borrowings are at a fixed interest rate of 4.0%. Outstanding borrowings pursuant to the EB-5 Program become due upon the seventh anniversary of the final disbursement. Under the terms and conditions of the EB-5 loan agreement, we borrowed $1.0 million in 2016 and an additional $0.5 million in March 2020. As of December 31, 2021, there was $1.5 million of principal outstanding under the EB-5 loan agreement. See Note 8 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under the EB-5 loan agreement.

Consulting Agreements

We have obligations under a consulting agreement with an individual providing services to us with regard to our Canadian operations (the "Canada Consulting Agreement"). Compensation under the Canada Consulting Agreement includes, among other forms of compensation, cash payments of up to $3.0 million upon the achievement of certain milestones related to COVAXIN. See Note 10 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under the Canada Consulting Agreement.

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Supply Commitments

In February 2022, we entered into a commitment to purchase $14.3 million of COVAXIN drug product components from Bharat Biotech to support the technology transfer from Bharat Biotech to Jubilant HollisterStier. We previously issued Series B Convertible Preferred Stock in March 2021 as an advance payment of $6.0 million for the supply of COVAXIN to be provided by Bharat Biotech pursuant to the Supply Agreement, which will be applied to this commitment. See Note 9 and Note 15 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding the Series B Convertible Preferred Stock and our supply commitments.

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, prepare for potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, expand headcount to support our development, commercialization, and business efforts, and operate as a public company.

Factors impacting our future funding requirements include, without limitation, the following:

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

•the outcome, timing, and cost of the regulatory authorization or approval process for our product candidates; including with respect to COVAXIN in the United States and Canada;

•the costs of manufacturing and commercialization, including with respect to COVAXIN, if authorized or approved;

•costs related to doing business internationally including our proposed development and commercialization of COVAXIN in Canada;

•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 to support our development, commercialization, and business efforts;

•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.

As of December 31, 2021, we had cash, cash equivalents, and restricted cash of approximately $95.1 million. This amount will not meet our capital requirements over the next 12 months. We will need to raise significant additional capital in order to fund our future operations. Our operating and capital requirements may change as a result of many factors currently unknown to us. To the extent that cash generated from future potential revenues of COVAXIN, if authorized or approved, is not sufficient, our management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, government grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, or other funding from the government or other third parties. There can be no assurance that these 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 a result of these factors, together with the anticipated increase in spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual Report on Form 10-K are issued.

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Off-Balance Sheet Arrangements

We did not have any 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 SEC.

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 consolidated 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 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 included elsewhere in this Annual Report on Form 10-K, 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"). We have issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and we also account for certain issuances of preferred stock and warrants in accordance with ASC 718. ASC 718 requires all stock-based payments, including grants of stock options and RSUs, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. The fair value of the RSUs is determined by the market price of a share of our common stock on the grant date. We recognize forfeitures as they occur.

Compensation expense related to stock-based compensation awards subject to 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. To the extent a stock-based compensation award is subject to performance-based vesting conditions, the amount of compensation expense recorded reflects an assessment of the probability of achieving the performance conditions. Compensation expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Shares issued upon stock option exercise and RSU vesting are newly issued shares of common stock.

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

The assumptions used in our Black-Scholes option-pricing model for stock options 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 term equals the arithmetic average of the vesting term and the original contractual term of the option.

Expected Volatility. The expected volatility is based on our historical volatilities and that of 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.

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Stock-based compensation expense was $7.0 million, $0.7 million, and $0.9 million for the years ended December 31, 2021, 2020, and 2019 respectively. As of December 31, 2021, we had $12.6 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 2.1 years.

Research and Development and Clinical Trial Accruals

As part of the process of preparing the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we are required to estimate and record expenses, for which a large portion are research and development expenses. Research and development expenses include, among other categories, development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. The estimation process involves identifying services that have been performed on our behalf by third-parties, estimating and accruing expenses in our consolidated financial statements based on the evaluation of the progress to completion of specific tasks and the facts and circumstances known to us at the time of the estimate, and assessing the accuracy of these estimates going forward to determine if adjustments are required. We periodically collaborate with the third-parties to assist in determining our estimates. Payments for these activities performed by third-parties are based on the terms of the individual arrangements with the third-parties, 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 applicable. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Any changes to estimates will be recorded in the period in which a circumstance causing a change in estimate becomes known and the impact of any change in estimate could be material.

Series B Convertible Preferred Stock Issuance

On March 1, 2021, we entered into a preferred stock purchase agreement, pursuant to which we agreed to issue and sell 0.1 million shares of our Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Convertible Preferred Stock"), at a price per share equal to $109.60, to Bharat Biotech. On March 18, 2021, we issued the Series B Convertible Preferred Stock as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech pursuant to a supply agreement with Bharat Biotech. The Series B Convertible Preferred Stock contains multiple conversion conditions, including our receipt of shipments by Bharat Biotech of the first 10.0 million doses of COVAXIN pursuant to the aforementioned supply agreement. We accounted for the issuance of the Series B Convertible Preferred Stock in accordance with ASC 718 and recorded the fair value of $5.0 million within stockholders' equity during the year ended December 31, 2021, with a corresponding short-term asset for the advanced payment for the doses of COVAXIN. We utilized the traded common stock price, adjusted by the Conversion Ratio (as defined in Note 9 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K), to value the Series B Convertible Preferred Stock and the Finnerty model to estimate a 15% discount rate for the lack of marketability of the instrument. The valuation incorporates Level 3 inputs in the fair value hierarchy, including the estimated time until the instrument's liquidity and estimated volatility of our common stock as of the grant date. As of December 31, 2021, we had not yet received shipments from Bharat Biotech of doses of COVAXIN, and as such, the amount remains recorded as a short-term asset for the advance payment for the doses of COVAXIN. See Note 9 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

Accounting for the Warrant Exchange

On October 4, 2019, we issued warrants to purchase our common stock: the Series A Warrants, Series B Warrants, and Series C Warrants. On April 22, 2020, we 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 at issuance of the Warrant Exchange Promissory Notes 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

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therefore classified as Level 3 fair value inputs. See Note 10 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 2 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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

As of December 31, 2021, we are not subject to any material market risk, including interest rate risk and foreign currency exchange rate risk. We consider all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Cash equivalents may include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposit, commercial paper, and U.S. government and U.S. government agency obligations. Given the short-term nature of these investments, we believe there is no associated material interest rate risk. We additionally conduct business both domestically and internationally and are therefore subject to foreign currency exchange rates. Foreign currency exchange rates do not currently have a material impact on our business and therefore do not represent a material market risk. We additionally do not have material commodity price or equity price risks.

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. The reports of our Independent Registered Public Accounting Firm, Ernst & Young LLP, Public Company Accounting Oversight Board identification number 42, are also included therein.

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, 2021. 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 Annual 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

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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, 2021 based on the 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, 2021. Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial reporting, as stated in their report included with the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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.

None.

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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 2022 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.

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PART IV

Item 15. Exhibit and Financial Statement Schedules.

The financial statements, 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.

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EXHIBIT INDEX

Exhibit Description

4.3* Form of Common Stock Purchase Warrant with Liminal Biosciences Inc.

103

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Exhibit Description

104

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Exhibit Description

21.1* List of Subsidiaries

101.INS* Inline XBRL Instance Document

101.SCH* Inline XBRL Taxonomy Extension Schema Document

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE* Inline 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.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Ocugen, Inc.

Dated: February 28, 2022 /s/ Shankar Musunuri, Ph.D., MBA

Dated: February 28, 2022 /s/ Sanjay Subramanian

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/

Shankar Musunuri (Principal Executive Officer)

Sanjay Subramanian (Principal Financial and Principal Accounting Officer)

/s/ Ramesh Kumar Director February 28, 2022

Ramesh Kumar

/s/ Junge Zhang Director February 28, 2022

Junge Zhang

/s/ Uday Kompella Director February 28, 2022

Uday Kompella

/s/ Manish Potti Director February 28, 2022

Manish Potti

/s/ Kirsten Castillo Director February 28, 2022

Kirsten Castillo

/s/ Prabhavathi Fernandes Director February 28, 2022

Prabhavathi Fernandes

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

OCUGEN, INC.

Page

Reports of Independent Registered Public Accounting Firm F-2

Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2021 and 2020 F-5

Notes to the Consolidated Financial Statements F-11

F-1

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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, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2022 expressed an unqualified opinion thereon.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated 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 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. Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated 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

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Accounting for convertible preferred stock

/s/ Ernst & Young LLP

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

Philadelphia, Pennsylvania

February 28, 2022

F-3

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Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control Over Financial Reporting

We have audited Ocugen, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Ocugen, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements. Also, 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.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

February 28, 2022

F-4

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OCUGEN, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

As of December 31,

Assets

Current assets

Advance for COVAXIN supply 4,988 —

Prepaid expenses and other current assets 2,700 1,839

Property and equipment, net 1,164 633

Liabilities and stockholders’ equity

Current liabilities

Accrued expenses and other current liabilities 4,325 2,941

Short-term debt, net — 234

Operating lease obligations 363 44

Non-current liabilities

Operating lease obligations, less current portion 1,231 389

Total non-current liabilities 2,943 2,212

Commitments and contingencies (Note 14)

Stockholders’ equity

Series A; seven issued and outstanding at December 31, 2021 and 2020 — —

Total liabilities and stockholders’ equity $ 105,761 $ 27,376

See accompanying notes to consolidated financial statements.

F-5

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OCUGEN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

Year ended December 31,

Revenues

Collaboration revenue $ — $ 43 $ —

Total revenues — 43 —

Operating expenses

In-process research and development — 7,000 —

Other income (expense)

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

Loss on debt conversion — — (341)

Income tax benefit (52) — —

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

See accompanying notes to consolidated financial statements.

F-6

OCUGEN, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share amounts)

Shares Amount Shares Amount Shares Amount

Stock-based compensation expense — — — — — — — 884 — 884

Repurchase of treasury stock — — — — — — (48) — — (48)

Stock-based compensation expense — — — — — — — 660 — 660

See accompanying notes to consolidated financial statements.

F-7

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OCUGEN, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

(in thousands, except share amounts)

Shares Amount Shares Amount Shares Amount

Stock-based compensation expense — — — — — — — 6,958 — 6,958

See accompanying notes to consolidated financial statements.

F-8

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OCUGEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year ended December 31,

Cash flows from operating activities

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

Depreciation and amortization expense 229 102 61

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

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

Loss on debt conversion — — 341

Income tax benefit (52) — —

Gain on forgiveness of PPP Note (426) — —

Impairment on note receivable 761 — —

Changes in assets and liabilities:

Prepaid expenses and other current assets (742) (370) (1,007)

Accounts payable and accrued expenses 3,498 (541) (1,629)

Cash flows from investing activities

Purchase of property and equipment (939) (307) (30)

Payments for asset acquisitions (127) — (2,327)

Issuance of note receivable (750) — —

Net cash used in investing activities (1,816) (307) (2,357)

Cash flows from financing activities

Payment of equity issuance costs (8,525) (1,477) —

Purchases of treasury stock — — (48)

Proceeds from Pre-Merger Financing — — 22,546

Proceeds from issuance of debt — 921 6,800

Payments of debt issuance costs — (6) (99)

Financing lease principal payments (10) (24) (26)

Net increase in cash, cash equivalents, and restricted cash 70,919 16,595 5,816

See accompanying notes to consolidated financial statements.

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OCUGEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Year ended December 31,

Supplemental disclosure of non-cash investing and financing transactions:

Exercise of warrants $ 603 $ — $ —

Series B Convertible Preferred Stock issuance $ 4,988 $ — $ —

Forgiveness of PPP Note $ 426 $ — $ —

Purchase of property and equipment $ 16 $ 214 $ —

Right-of-use assets related to operating leases $ 1,226 $ 180 $ 470

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

Obligation settled with common stock $ — $ 331 $ —

Conversion of convertible notes $ — $ — $ 13,980

Equity issuance costs $ — $ 4 $ 1,150

Reverse asset acquisition costs $ — $ — $ 2,253

See accompanying notes to consolidated financial statements.

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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 clinical-stage biopharmaceutical company focused on developing gene therapies to cure blindness diseases and developing a vaccine to save lives from COVID-19. The Company is headquartered in Malvern, Pennsylvania, and manages its business as one operating segment.

COVID-19 Vaccine Candidate

In February 2021, the Company entered into a Co-Development, Supply and Commercialization Agreement with Bharat Biotech International Limited ("Bharat Biotech"), pursuant to which the Company obtained an exclusive right and license under certain of Bharat Biotech’s intellectual property rights, with the right to grant sublicenses, to develop, manufacture, and commercialize COVAXIN for the prevention of COVID-19 caused by SARS-CoV-2 in the United States, its territories, and possessions. In June 2021, the Company entered into an amendment to the Co-Development, Supply and Commercialization Agreement (as so amended, the "Covaxin Agreement") pursuant to which the parties agreed to expand the Company's rights to develop, manufacture, and commercialize COVAXIN to include Canada in addition to the United States, its territories, and possessions (the "Ocugen Covaxin Territory").

COVAXIN is a whole-virion inactivated COVID-19 vaccine candidate and is formulated with the inactivated SARS-CoV-2 virus, an antigen, and an adjuvant. COVAXIN requires a two-dose vaccination regimen given 28 days apart and is stored in standard vaccine storage conditions (2-8°C). COVAXIN was granted an Emergency Use Listing by the World Health Organization in November 2021. Over 295 million doses globally have been administered to date.

The Company is pursuing Biologics License Application ("BLA") approval for COVAXIN in the United States based upon the recommendation of the U.S. Food and Drug Administration ("FDA"). In October 2021, the Company submitted an Investigational New Drug ("IND") application to the FDA to initiate a Phase 2/3 immuno-bridging and broadening clinical trial evaluating COVAXIN for adults ages 18 years and older. The clinical trial is designed to evaluate whether the immune response experienced in participants in a completed Phase 3 clinical trial in India is similar to a demographically representative, adult population in the United States. In November 2021, the Company was notified that the FDA issued a clinical hold on its IND application. In December 2021, the FDA sent the Company a letter setting forth the reasons for the clinical hold and specific guidance on steps that must be taken to have the clinical hold lifted. The Company provided the FDA responses to their comments and the FDA lifted its clinical hold in February 2022. The Company plans to initiate the Phase 2/3 immuno-bridging and broadening clinical trial for COVAXIN as soon as the Company is able to. The Company also plans to initiate a safety-bridging clinical trial in the first half of 2022, subject to discussions with the FDA. Subject to the foregoing, the Company anticipates submitting a BLA with the FDA near the end of 2022. In November 2021, the Company also submitted a request to the FDA for Emergency Use Authorization ("EUA") for COVAXIN for pediatric use in ages two to 18 years in the United States. The EUA submission was based on the results of a Phase 2/3 immuno-bridging pediatric clinical trial conducted by Bharat Biotech in India. The Company's EUA submission is currently under review by the FDA. In February 2022, Delta and Omicron neutralization results along with a safety database of more than 36 million teenagers who had been vaccinated with COVAXIN were submitted to the FDA to support the Company's EUA submission.

The Company is also pursuing approval for COVAXIN in Canada. In July 2021, the Company completed its rolling submission to Health Canada for COVAXIN. The rolling submission process, which permits companies to submit safety and efficacy data and information as they become available, was recommended and accepted under the Minister of Health’s Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19 and transitioned to a New Drug Submission ("NDS") for COVID-19. The submission was conducted through the Company's Canadian subsidiary, Vaccigen Ltd. The Company is in discussions with Health Canada regarding its NDS submission for COVAXIN. In December 2021, the Company was provided with a Notice of Deficiency ("NOD") from Health Canada regarding its NDS submission. Health Canada requested further analyses of the COVAXIN preclinical and clinical data, as well as additional information regarding chemistry, manufacturing, and controls ("CMC"). The Company has responded to and provided proposed resolutions for the deficiencies included in the NOD. The Company's responses are currently under review by Health Canada.

The Company is evaluating its commercialization strategy for COVAXIN in the United States and Canada, if authorized or approved in either jurisdiction. In June 2021, the Company selected Jubilant HollisterStier as its manufacturing partner for COVAXIN to prepare for the potential commercial manufacturing for the Ocugen Covaxin Territory. The Company expects to

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enter into a master services agreement with Jubilant HollisterStier for the commercial manufacture of COVAXIN. The technology transfer process from Bharat Biotech to Jubilant HollisterStier for drug product manufacturing has been initiated.

In September 2021, the Company entered into a Development and Commercial Supply Agreement (the “Supply Agreement”) with Bharat Biotech, pursuant to which Bharat Biotech will supply the Company with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the completion of a technology transfer. Following the completion of a technology transfer, Bharat Biotech will supply COVAXIN drug product components and continue to supply finished drug product as necessary for the commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval.

Modifier Gene Therapy Platform

The Company is developing a modifier gene therapy platform designed to fulfill unmet medical needs in the area of retinal diseases, including inherited retinal diseases ("IRDs"), such as retinitis pigmentosa ("RP") and Leber congenital amaurosis ("LCA"), and dry age-related macular degeneration ("AMD"). The Company's modifier gene therapy platform is based on Nuclear Hormone Receptors ("NHRs"), which have the potential to restore homeostasis, the basic biological processes in the retina. The modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential to address multiple retinal diseases caused by mutations in multiple genes with one product; and potentially address complex diseases, such as dry AMD, that are potentially caused by imbalances in multiple gene networks.

The Company believes that OCU400, its first product candidate being developed with its modifier gene therapy platform, has the potential to be broadly effective in restoring retinal integrity and function across a range of IRDs, including RP and 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. In November 2021, the Company submitted an IND application to the FDA for OCU400 for the treatment of the NR2E3 and RHO disease genotypes. The Company's IND application was accepted by the FDA in December 2021. The Company has initiated a Phase 1/2 clinical trial in the United States for the treatment of these disease genotypes and the first patient is expected to be dosed in the first half of 2022. This Phase 1/2 clinical trial is a multicenter, open-label, dose ranging study to assess the safety of unilateral subretinal administration of OCU400 in subjects with NR2E3-related RP. OCU400 has additionally received Orphan Medicinal Product Designation from the European Commission, based on the recommendation of the European Medicines Agency, for RP and LCA. The Company believes OCU400 has the potential for broad spectrum applications to treat many IRDs. The Company is currently evaluating options to initiate OCU400 clinical trials in Europe.

The Company'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. The Company is currently executing pre-IND studies consistent with FDA discussions to support a Phase 1/2 clinical trial. The Company has engaged CanSino Biologics, Inc. ("CanSinoBIO") to manufacture clinical supplies and be responsible for the CMC development for OCU400 and OCU410. See Note 3 for additional information about the Company's collaboration with CanSinoBIO.

Novel Biologic Therapy for Retinal Diseases

The Company's pipeline also includes a biologic product candidate, OCU200, a novel fusion protein designed to treat severely sight-threatening diseases such as diabetic macular edema, diabetic retinopathy, and wet AMD. The Company is currently establishing a current Good Manufacturing Practice process for the production of clinical trial materials and executing pre-IND studies consistent with FDA discussions to support a Phase 1/2a clinical trial. The Company has completed the technology transfer of manufacturing processes to its contract development and manufacturing organization that will manufacture OCU200 clinical supplies.

Going Concern

The Company has incurred recurring net losses since inception and has funded its operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes, debt, and grant proceeds. The Company incurred net losses of approximately $58.4 million, $21.8 million, and $20.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, the Company had an accumulated deficit of $131.7 million and cash, cash equivalents, and restricted cash totaling $95.1 million.

The Company is subject to risks, expenses, and uncertainties frequently encountered by companies in its industry. The Company intends to continue its research, development, and commercialization efforts for its product candidates, which will

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require significant additional funding. If the Company is unable to obtain additional financing in the future or its research, development, and commercialization efforts require higher than anticipated capital, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital through public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, government grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, or other funding from the government or other third parties. Such financing may not be available at all, or on terms that are favorable to the Company. While management of the Company believes that it has a plan to fund ongoing operations, its plan may not be successfully implemented. Failure to generate sufficient cash flows from operations, raise additional capital, or appropriately manage certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As a result of these factors, together with the anticipated increase in spending that will be necessary to continue to research, develop, and commercialize the Company’s product candidates and the uncertainty of futures revenues associated with COVAXIN, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States ("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 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 the consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include those used in the accounting for research and development contracts, including clinical trial accruals, debt and equity instruments (including derivative liabilities), asset held for sale, and the collectibility of the note receivable.

Segment Information

As of December 31, 2021, 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, 2021, substantially all of the Company's assets were located in the United States.

Cash, Cash Equivalents, and Restricted Cash

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

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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 (in thousands):

As of December 31,

Total cash, cash equivalents, and restricted cash $ 95,109 $ 24,190

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. 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. During the year ended December 31, 2020, the Company recorded collaboration revenue from an agreement accounted for as a collaborative arrangement within the scope of ASC 808. No collaboration revenue was recorded during the years ended December 31, 2021 and 2019.

Asset Held for Sale

During 2019, the Company had an intangible asset held for sale that 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 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 in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2020 as the in-process research and development did not have an alternative future use.

Property and Equipment, Net

The Company's property and equipment currently includes furniture and fixtures, machinery and equipment, leasehold improvements, and construction in progress. Property and equipment is recorded at historical 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. Construction in progress is not depreciated until such time that the asset is completed and placed into service. Once placed into service, the asset is depreciated over its expected useful life.

Expected useful lives by major asset category are as follows:

Furniture and fixtures 3 to 7 years

Machinery and equipment 5 to 7 years

Leasehold improvements Lower of the expected useful life or remaining lease term

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

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Company's current and historical lease agreements include lease and non-lease components, which the Company has elected not to account for separately for all classes of underlying assets. Lease expense for variable lease components is recognized when the obligation is probable.

Operating leases are included in other assets and operating lease obligations in 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 and recognized as research and development expense or general and administrative expense based on the underlying nature of the expense. The Company currently leases real estate classified as operating leases. 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. The implicit interest rate was not readily determinable in the Company’s current and historical operating leases. As such, the incremental borrowing rate was used based on the information available at the commencement date in determining the present value of lease payments.

The lease term for the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

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

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

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 former employee.

Fair Value Measurements

The Company follows the provisions of FASB ASC Topic 820, Fair Value Measurements ("ASC 820"), which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

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Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these instruments. As of December 31, 2021, the Company has concluded that the fair value of the borrowings under the EB-5 Loan Agreement (as defined in Note 8), using Level 2 inputs, approximate their carrying value. See Note 8 for additional information.

Financial Instruments and Derivatives

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 in accordance with FASB ASC Topic 815, Derivatives and Hedging ("ASC 815"). Additionally, the Company assesses warrants to purchase common stock to determine liability versus stockholders' equity classification in accordance with ASC 815 and FASB ASC Topic 480, Distinguishing Liabilities from Equity. 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 instrument should be recorded as a liability or as stockholders' equity, is evaluated at the end of each reporting period.

In 2018 and 2019, the Company issued convertible notes in the aggregate principal amount of $8.8 million (the "Convertible Notes"). During the year ended December 31, 2019, the Company issued 1.1 million shares of common stock at $8.69 per share to extinguish the Convertible Notes, resulting in a loss of $0.3 million and an increase of $13.0 million in additional paid-in capital. The Convertible Notes contained embedded conversion and change-in-control features, which were recorded at fair value as derivative liabilities and revalued at each reporting date. The Company additionally had Series B Warrants (as defined in Note 10) that were classified as derivative liabilities at issuance and revalued each reporting period until they met the derivative scope exception allowing for stockholders' equity classification. The change in fair value of derivative liabilities related to the Convertible Notes and the Series B Warrants was $3.2 million during the year ended December 31, 2019. There were no derivative instruments revalued on a recurring basis during the years ended December 31, 2021 and 2020.

Stock-Based Compensation

The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation ("ASC 718"). The Company has issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and also accounts for certain issuances of preferred stock and warrants in accordance with ASC 718. ASC 718 requires all stock-based payments, including grants of stock options and RSUs, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. For RSUs, the fair value of the RSUs is determined by the market price of a share of the Company's common stock on the grant date. The Company recognizes forfeitures as they occur.

Compensation expense related to stock-based compensation awards granted with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock-based compensation awards generally vest over a one to three year requisite service period and have a contractual term of 10 years. To the extent a stock-based compensation award is subject to performance-based vesting conditions, the amount of compensation expense recorded reflects an assessment of the probability of achieving the performance conditions. Compensation expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Shares issued upon stock option exercise and RSU vesting are newly issued shares of common stock.

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

The assumptions used in Ocugen’s Black-Scholes option-pricing model for stock options 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 stock options subject to service-based vesting conditions is

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determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock 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.

Recently Adopted Accounting Standards

In December 2019, the FASB issued Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. 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 basis of 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. This standard was effective for the Company on January 1, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This standard has an effective and transition date of January 1, 2022. This standard increases the transparency of transactions with the government that are accounted for by applying a grant or contribution accounting model, and aims to reduce diversity that currently exists in the recognition, measurement, presentation, and disclosure of government assistance received by business entities due to the lack of specific authoritative guidance in GAAP. This standard requires an entity to provide information regarding the nature of the transaction with a government and the related accounting policy used to account for this transaction, the line item on the consolidated balance sheet and consolidated statement of operations and comprehensive loss that are affected by the transaction and the amounts applicable to each financial statement line item, and the significant terms and conditions of the transaction, including commitments and contingencies. The Company does not currently expect the adoption of this standard to have a material impact on the Company's consolidated financial statements.

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). This standard will have an effective and transition date of January 1, 2022. This standard clarifies and reduces diversity in an issuer's accounting for modifications or exchanges of freestanding equity-classified written call options, including warrants, that remain equity-classified after modification or exchange. The standard requires an entity to treat a modification or an exchange of a freestanding equity-classified written call option that remains equity-classified after the modification or exchange as an exchange of the original instrument for a new instrument. The standard additionally provides guidance on measuring and recognizing the effect of a modification or an exchange. The

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

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

3. License and Development Agreements

Co-Development, Supply and Commercialization Agreement with Bharat Biotech

The Company entered into the Covaxin Agreement with Bharat Biotech to co-develop COVAXIN for the Ocugen Covaxin Territory. The Covaxin Agreement was originally entered into in February 2021 with respect to the U.S. market and was subsequently amended in June 2021 to add rights to the Canadian market. In consideration of the expansion of the Ocugen Covaxin Territory to include Canada, the Company paid Bharat Biotech a non-refundable, upfront payment of $15.0 million in June 2021, which was recognized as research and development expense in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2021. The Company additionally agreed to pay Bharat Biotech $10.0 million within 30 days after the first commercial sale of COVAXIN in Canada. The Covaxin Agreement is a collaboration arrangement within the scope of ASC 808.

Pursuant to the Covaxin Agreement, the Company obtained an exclusive right and license under certain of Bharat Biotech’s intellectual property rights, with the right to grant sublicenses, to develop, manufacture, and commercialize COVAXIN in the Ocugen Covaxin Territory. In consideration of the license and other rights granted to the Company by Bharat Biotech, the parties agreed to share any Operating Profits (as defined in the Covaxin Agreement) generated from the commercialization of COVAXIN in the Ocugen Covaxin Territory, with the Company retaining 45% of such profits, and Bharat Biotech receiving the balance of such Operating Profits.

Under the Covaxin Agreement, the Company is collaborating with Bharat Biotech to develop COVAXIN for their respective territories. Except with respect to manufacturing rights under certain circumstances subsequently described, the Company has the exclusive right and is solely responsible for researching, developing, manufacturing, and commercializing COVAXIN for the Ocugen Covaxin Territory. Bharat Biotech is responsible for researching, developing, manufacturing, and commercializing COVAXIN outside of the Ocugen Covaxin Territory.

Bharat Biotech has agreed to provide to the Company preclinical and clinical data, and to transfer to the Company certain proprietary technology owned or controlled by Bharat Biotech, that is necessary for the successful commercial manufacture and supply of COVAXIN to support commercial sale in the Ocugen Covaxin Territory, if authorized or approved.

In September 2021, the Company entered into the Supply Agreement with Bharat Biotech, pursuant to which Bharat Biotech will supply the Company with clinical trial materials and commercial supplies of COVAXIN finished drug product prior to the completion of a technology transfer. Following the completion of a technology transfer, Bharat Biotech will supply COVAXIN

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drug product components and continue to supply finished drug product as necessary for commercial manufacture and supply of COVAXIN subsequent to a regulatory authorization or approval. The technology transfer process from Bharat Biotech to Jubilant HollisterStier for drug product manufacturing has been initiated. In March 2021, the Company issued shares of Series B Convertible Preferred Stock (as defined in Note 9) as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech under the Supply Agreement. See Note 9 for additional information about the Series B Convertible Preferred Stock issuance to Bharat Biotech.

The Covaxin Agreement continues in effect for the commercial life of COVAXIN, subject to the earlier termination of the Covaxin Agreement in accordance with its terms. The Covaxin Agreement also contains customary representations and warranties made by both parties and customary provisions relating to indemnification, limitation of liability, confidentiality, information and data sharing, and other matters. The Supply Agreement expires upon expiration of the Covaxin Agreement and may be earlier terminated by either party in the event of an uncured material breach or bankruptcy of the other party.

License Agreement with The Schepens Eye Research Institute, Inc.

In December 2017, the Company entered into an exclusive license agreement with The Schepens Eye Research Institute ("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 NHR genes Nuclear Receptor Subfamily 1 Group D Member 1 ("NR1D1"), NR2E3 (OCU400), RORA (OCU410), Nuclear Protein 1, Transcriptional Regulator ("NUPR1"), and Nuclear Receptor Subfamily 2 Group C Member 1 ("NR2C1"). The January 2021 amendment to the SERI Agreement additionally granted the Company rights in co-owned intellectual property pursuant to certain patent applications and provisional patent applications at the time of the amendment. Under the SERI Agreement, the Company may make, have made, use, offer to sell, sell, and import licensed products, and must use commercially reasonable efforts to bring one or more licensed products to market as soon as reasonably practicable.

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 Company has assumed prosecution of certain licensed patent rights under the SERI Agreement.

The SERI Agreement is a collaborative arrangement within the scope of ASC 808. The SERI Agreement requires the Company to pay licensing fees for patent rights granted, an annual license maintenance fee, payment of certain regulatory and commercial milestones in the aggregate amount of $16.1 million, and low single-digit percentage royalties on annual net sales of products that fall under the licensed patent rights. The Company has made no milestone or royalty payments to date pursuant to the SERI Agreement.

The SERI Agreement will expire on the expiration date of the last to expire licensed patent rights, subject to the earlier termination of the SERI Agreement in accordance with its terms. 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, fails to make payments within thirty days of receiving a written notice of missed payment, fails to comply with its diligence obligations, defaults on its obligation to procure and maintain insurance, one of its officers is convicted of a 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.

Co-Development and Commercialization Agreement with CanSinoBIO

The Company entered into a co-development and commercialization agreement with CanSinoBIO with respect to the development and commercialization of the Company's modifier gene therapy product candidates, OCU400 and OCU410. The co-development and commercialization agreement was originally entered into in September 2019 with regards to OCU400, and was subsequently amended in September 2021 (as so amended, the "CanSinoBIO Agreement"), to include OCU410 to the Company's existing collaboration with CanSinoBIO.

Pursuant to the CanSinoBIO Agreement, the Company and CanSinoBIO will collaborate on the development of OCU400 and OCU410. CanSinoBIO will be responsible for the CMC development and manufacture of clinical supplies of such products and be responsible for the costs associated with such activities. CanSinoBIO has an exclusive license to develop, manufacture, and commercialize OCU400 and OCU410 in and for China, Hong Kong, Macau, and Taiwan (the "CanSinoBIO Territory"), and the Company maintains exclusive development, manufacturing, and commercialization rights with respect to OCU400 and OCU410 outside the CanSinoBIO Territory (the "Company Territory").

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CanSinoBIO will pay to the Company an annual royalty between mid- and high-single digits based on Net Sales (as defined in the CanSinoBIO Agreement) of OCU400 and OCU410 in the CanSinoBIO Territory. The Company will pay to CanSinoBIO an annual royalty between low- and mid-single digits based on Net Sales of OCU400 and OCU410 in the Company Territory.

Unless earlier terminated in accordance with its terms, 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 the Company's patent rights covering OCU400 and OCU410 and (b) the tenth (10th) anniversary of the first commercial sale of OCU410 in such country. The CanSinoBIO Agreement will also terminate contemporaneously upon the termination of the SERI Agreement, provided that CanSinoBIO is not in breach or default of the CanSinoBIO Agreement. The CanSinoBIO Agreement may be terminated by either party in its entirety upon (a) a material or persistent 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.

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, and has 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 regulatory milestones aggregating to $1.5 million, an annual minimum payment that began the third year after the effective date, low single-digit percentage earned royalties 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.

4. Notes Receivable

On April 13, 2021, the Company received a promissory note in the principal amount of $0.8 million from a company in connection with a potential collaboration. The promissory note bore interest at a rate per annum of 5% and the outstanding principal balance of the promissory note plus any accrued and unpaid interest thereon was payable in full on April 13, 2022 (the "Maturity Date"). Effective July 2021, the Company accepted an amended and restated promissory note (as so amended and restated, the "Promissory Note") pursuant to which the parties agreed to extend the Maturity Date of the Promissory Note to June 30, 2022 and increase the interest rate per annum to 9% with quarterly interest payments. The Promissory Note may be prepaid in whole or in part at any time, together with accrued and unpaid interest. The Promissory Note contains customary covenants and events of default, including, among others, failure to make payment, breach of agreement, and bankruptcy.

The Company evaluated the probability of collecting the full principal and accrued interest balance under the terms of the Promissory Note and determined that collection was not probable. During the year ended December 31, 2021, the Company wrote off the full principal and accrued interest balance of the Promissory Note and recorded the write-off as a loss within other income (expense) within the consolidated statements of operations and comprehensive loss.

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5. Property and Equipment

The following table provides a summary of the major components of property and equipment as reflected on the consolidated balance sheets (in thousands):

As of December 31,

Furniture and fixtures $ 284 $ 166

Machinery and equipment 855 452

Construction in progress 232 —

Financing lease right-of-use asset — 64

Total property and equipment 1,538 859

Less: accumulated depreciation (374) (226)

Total property and equipment, net $ 1,164 $ 633

The Company recognized depreciation expense of $0.2 million, $0.1 million, and $0.1 million during the years ended December 31, 2021, 2020, and 2019, respectively.

6. Operating Leases

The Company has commitments under operating leases for its current headquarters as well as for additional office space. The Company's operating lease for its current headquarters includes the use of laboratory, office, and storage space located in Malvern, Pennsylvania (the "Lease Agreement"). The Lease Agreement was determined to have two lease components per ASC 842 with commencement dates in December 2020 and January 2021. 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 it is not reasonably certain that the Company will exercise such option. The Company had a lease agreement for its former headquarters, which was terminated in January 2021 without penalty pursuant to the terms of the Lease Agreement. The termination was accounted for as a modification per ASC 842 as the contractual lease term of the former lease agreement was shortened. The Company also had a lease agreement for a former laboratory space, which was terminated in December 2020.

The components of lease expense were as follows (in thousands):

Year ended December 31,

Supplemental balance sheet information related to leases was as follows (in thousands):

As of December 31,

Right-of-use assets, net $ 1,587 $ 434

Current lease obligations $ 363 $ 44

Non-current lease obligations 1,231 389

Total lease liabilities $ 1,594 $ 433

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Supplemental information related to leases was as follows:

Year ended December 31,

Weighted-average remaining lease terms — operating leases (years) 5.3 6.9 2.0

Weighted-average discount rate — operating leases 4.1 % 4.6 % 7.6 %

Future minimum operating lease base rent payments are approximately as follows (in thousands):

For the years ending December 31, Amount

Less: present value adjustment (231)

Present value of minimum lease payments $ 1,594

In October 2021, the Company entered into a lease agreement for additional office space located in Malvern, Pennsylvania. The lease has an expected commencement date in the first half of 2022 and has an initial term of seven years. The aggregate estimated base rent payments due over the initial seven-year term is $3.8 million, which is excluded from the future minimum operating base rent payments above as the lease agreement has not yet commenced per ASC 842. Additionally, the Company will be responsible for the operating expenses and utilities associated with the leased premises. The Company has the option to extend the lease agreement for two additional five-year terms, provided the Company is not under an event of default pursuant to the terms of the lease agreement.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are as follows (in thousands):

As of December 31,

Research and development $ 866 $ 512

Severance-related (1) — 712

Total accrued expenses and other current liabilities $ 4,325 $ 2,941

(1) In June 2020, the Company communicated notice to five employees of the termination of their employment as a result of the discontinuation of a product candidate. 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.

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The following table provides a summary of the severance-related charges and severance payments during the years ended December 31, 2021 and 2020 related to the June 2020 reduction in workforce (in thousands):

Amount

Accrued Severance at December 31, 2019 $ —

Severance-related charges 1,116

Severance-related payments 404

Severance-related charges —

Severance-related payments 712

Accrued Severance at December 31, 2021 $ —

As of December 31, 2021, the Company has satisfied its commitments under the separation agreements with the five former employees.

8. Debt

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

As of December 31,

PPP Note $ — $ 421

Total carrying value of debt, net $ 1,712 $ 2,057

PPP Note

In April 2020, the Company was granted a loan from Silicon Valley Bank ("SVB"), in the 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”). Under the PPP, the loan was eligible for forgiveness to the extent the funds received were 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 had a maturity date of April 30, 2022 and bore interest at a rate of 1.0% per annum. 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 provided for customary events of default, including, among others, failure to make payment, bankruptcy, breaches of representations, and material adverse events. In May 2021, the Company received notice from the Small Business Administration that the PPP Note was forgiven in its entirety, including both principal and accrued interest. The Company recognized a $0.4 million gain on loan extinguishment within other income (expense) for the forgiveness of the PPP Note within the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021.

EB-5 Loan Agreement

In September 2016, pursuant to the U.S. government’s Immigrant Investor Program, commonly known as the EB-5 program, the Company entered into an arrangement (the “EB-5 Loan Agreement”) to borrow up to $10.0 million from EB5 Life Sciences, L.P. ("EB-5 Life Sciences") in $0.5 million increments. Borrowings may be limited by the amount of funds raised by 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 product candidates and for the general working capital needs of the Company. Outstanding borrowings pursuant to the EB-5 Loan Agreement, including accrued interest, become due upon the seventh anniversary of the final disbursement. Amounts repaid cannot be re-borrowed. The EB-5 Loan Agreement borrowings are secured by substantially all assets of the Company, except for any patents, patent applications, pending patents, patent license, patent sublicense, trademarks, and other intellectual property rights.

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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 in March 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, 2021 and 2020 are summarized below (in thousands):

As of December 31,

Less: unamortized debt issuance costs (29) (45)

9. Equity

COVAXIN Preferred Stock Purchase Agreement

On March 1, 2021, the Company entered into a preferred stock purchase agreement, pursuant to which the Company agreed to issue and sell 0.1 million shares of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Convertible Preferred Stock"), at a price per share equal to $109.60, to Bharat Biotech. On March 18, 2021, the Company issued the Series B Convertible Preferred Stock as an advance payment for the supply of COVAXIN to be provided by Bharat Biotech pursuant to the Supply Agreement. Subsequent to December 31, 2021, the Company entered into supply commitments related to COVAXIN, which the advanced payment will be applied to.

Each share of Series B Convertible Preferred Stock is convertible, at the option of Bharat Biotech, into 10 shares of the Company’s common stock (the "Conversion Ratio") only after (i) the Company received stockholder approval to increase the number of authorized shares of common stock under its Sixth Amended and Restated Certificate of Incorporation and (ii) the Company’s receipt of shipments by Bharat Biotech of the first 10.0 million doses of COVAXIN manufactured by Bharat Biotech pursuant to the Supply Agreement, and further on the terms and subject to the conditions set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the "Certificate of Designation"). In April 2021, the Company's stockholders approved an increase in the number of the Company's authorized shares of common stock from 200.0 million to 295.0 million. As of December 31, 2021, the conversion condition relating to the delivery of the first 10.0 million doses of COVAXIN had not been met. The conversion rate of the Series B Convertible Preferred Stock is subject to adjustment in the event of a stock dividend, stock split, reclassification, or similar event with respect to the Company’s common stock.

Bharat Biotech is entitled to receive dividends on the Series B Convertible 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 Certificate of Designation, the Series B Convertible Preferred Stock has no voting rights. Upon a liquidation or dissolution of the Company, holders of Series B Convertible Preferred Stock would be entitled to receive the same amount that a holder of common stock would receive if the Series B Convertible Preferred Stock were fully converted to common stock.

OCGN US Equity

OCGN · 10-K · period ended 2021-12-31

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. Exhibit and Financial Statement Schedules.

Item 16. 10-K Summary

OCGN US Equity☆

OCGN · 10-K · period ended 2021-12-31

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. Exhibit and Financial Statement Schedules.

Item 16. 10-K Summary

OCGN US Equity