Note 8 – Related Party Transactions

The Company’s Chief Executive Officer as well as a member of its Board of Directors are both partners in Private Medical Equity, Inc. (“PME”). The Company and PME are parties to a consulting agreement dated November 4, 2014 that provides for the payment of $33,200 per month to PME in consulting fees for general management and strategy services. Any time spent by PME in excess of the specified amount is billed separately. During the years ended December 31, 2017 and 2016, the Company incurred $329,400 and $398,400, respectively, related to the agreement, of which, $176,344 and $318,720, respectively, was included within research and development expenses and $152,656 and $79,680, respectively, was included within general and administrative expenses on the condensed statements of operations. On August 1, 2017, the agreement was terminated and the Company’s Chief Executive Officer was employed full time by the Company. The Board member now bills the Company through a separate consulting agreement dated July 6, 2017 that is discussed below.

A company that beneficially owns greater than 5% of the Company’s common stock has a consulting agreement with the Company for research and development services. During the years ended December 31, 2017 and 2016, the Company recognized $0 and $366,209, respectively, related to the agreement, which was included within research and development expenses on the statements of operations.

Since July 2016, the Company pays $3,000 per month to a company controlled by a member of its Board of Directors for office space in New York, New York for its Chief Executive Officer. During the years ended December 31, 2017 and 2016, the Company recorded rent expense of $36,000 and $18,000, respectively, related to the office space.

A company in which a member of the Company’s Board of Directors is part owner is a party to a consulting agreement with the Company dated July 6, 2017 that provides for the payment of $9,567 per month, and $250 per hour for any additional work, for advisory services performed by such director. During the year ended December 31, 2017, the Company incurred $85,835 related to the agreement which was included within general and administrative expenses on the statement of operations.

On July 6, 2017, the Company entered into an engagement letter with its Vice President of Research and Development (“VP of R&D”). Pursuant to the terms of the engagement letter, starting on August 1, 2017, the VP of R&D was to provide service to the Company as a non-employee on a part-time basis in exchange for $9,167 per month and $175 per hour for any additional work. On July 7, 2017, the VP of R&D was granted options to purchase 100,264 shares of common stock at an exercise price of $1.95 per share that vest in equal monthly installments over 36 months starting from the date of grant. The options had a grant date fair value of $173,900. On August 16, 2017, the VP of R&D changed from a non-employee to an employee of the Company but remained employed on a part-time basis at the same compensation rate. Subsequent to December 31, 2017, the VP of R&D’s salary was increased to $165,000 per year in connection with the increase from two (2) to three (3) days of work per week. The following are related party transactions involving the VP of R&D:

The VP of R&D owns a company that entered into a lease agreement with the Company on September 15, 2016 to lease 953 square feet of space located in Reno, NV with respect to its research and development activities. The monthly base rent is $3,895 per month over the term of the lease and the security deposit is $3,895. The lease expires on September 14, 2018 and is subject to an extension at the option of the Company at a fixed rental rate for an additional 2-year period. The Company made $40,000 of leasehold improvements related to this lease which are included on the balance sheet. The Company’s rent expense amounted to $45,678 and $18,590 for the years ended December 31, 2017 and 2016, respectively.

The VP of R&D is the sole owner and President of a company that performs contract engineering services for the Company. During the years ended December 31, 2017 and 2016, the Company recognized research and development expense of $1,155,500 and $1,427,958, respectively, related to services provided by such vendor. As of December 31, 2017, the Company had a liability of $94,998 to the vendor and $9,906 related to expenses incurred by the VP of R&D.

During 2015, the Company entered into a license agreement with Senju Pharmaceutical Co., Lt. (“Senju”) whereby the Company agreed to grant to Senju an exclusive, royalty-bearing license for its micro-dose product candidates for Asia to sublicense, develop, make, have made, manufacture, use, import, market, sell, and otherwise distribute the micro-dose product candidates. In consideration for the license, Senju agreed to pay to Eyenovia five percent (5%) royalties for the term of the license agreement. The agreement shall continue in full force and effect, on a country-by-country basis, until the latest to occur of: (i) the tenth (10th) anniversary of the first commercial sale of a micro-dose product candidate in Asia; or (ii) the expiration of the licensed patents. As of the date of filing, there had been no commercial sales of a micro-dose product candidate in Asia such that no royalties had been earned. Senju is owned by the family of a member of the Company’s Board of Directors and both beneficially own greater than 5% of the Company’s common stock.