Ocugen, Inc.

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Our indebtedness could adversely affect our liquidity, financial condition and our ability to fulfill our obligations and operate our business.

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As of March 31, 2026, our total outstanding indebtedness was approximately $28.8 million of indebtedness, all of which was secured, and approximately $0.3 million of finance obligations secured in part by restricted cash. On May 7, 2026, we completed a financing transaction involving the issuance of $115.0 million in aggregate principle amount of convertible senior notes, and we used a portion of the proceeds to fully repay our obligations under the Avenue Loan Agreement, including payment of the related prepayment fee and expenses, and terminate the Avenue Loan Agreement and all related loan documents. However, we continue to have significant indebtedness and debt service obligations, and we may incur additional indebtedness in the future.

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Our indebtedness could have negative consequences on our future operations, including:

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● we may have difficulty satisfying our obligations with respect to our outstanding debt;

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● we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions, or other purposes;

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● our vulnerability to general economic downturns and adverse industry conditions could increase;

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● our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited; and

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● our debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors, who may have less debt.

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Our ability to generate cash to repay our indebtedness is subject to the performance of our business, as well as general economic, financial, competitive, and other factors that are beyond our control. If future borrowings are not available to us in amounts sufficient to enable us to fund our liquidity needs, our operating results and financial condition may be adversely affected. In particular, if we are unable to access the capital markets on acceptable terms, reduce cash burn, improve margins and cash flows, or otherwise raise or generate sufficient liquidity, we may be unable to fund operations, make required capital investments, or satisfy our debt obligations when due.

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We have a limited number of authorized shares of common stock available for issuance and will need to seek stockholder approval to amend our certificate of incorporation, as amended, to either effect a reverse stock split or increase the number of authorized shares of common stock.

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Immediately following the closing of the offering of our senior convertible notes due 2034, we will not have a sufficient number of authorized and unissued shares to permit conversion of the notes into shares of our common stock. We will seek stockholder approval of an amendment to our certificate of incorporation, as amended, to either (i) increase the number of authorized shares of our common stock that results in a number of authorized and unissued shares of our common stock at least sufficient to cover the maximum number of conversion shares or (ii) effect a reverse stock split, which would have the effect of reducing the number of issued shares and thereby increase the authorized shares of common stock available for issuance to permit the conversion in full of the notes into shares of our common stock. If we do not receive that stockholder approval and reserve a sufficient number of authorized but unissued shares, we will be required to settle all conversions in cash, which could cause a significant cash outflow that would materially impact our liquidity and ability to fund operations.

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We may not have the ability to raise the funds necessary to settle conversions of our senior convertible notes in cash or to repurchase the notes upon a fundamental change, repurchase the notes upon exercise of a holder put right, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes.

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Holders of our senior convertible notes will have the right to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. Additionally, on May 15, 2032, holders of the senior convertible notes will have the right to require us to repurchase for cash all or any portion of their notes at 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest to, but excluding the specified repurchase date. In addition, upon conversion of the senior convertible notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments as part of the conversion consideration in respect of the notes being converted. Further, upon conversion of a senior convertible note, unless a holder converts that note after the close of business on a record date for an interest payment but on or prior to the corresponding interest payment date, we will be required to deliver to such converting holder a cash payment representing accrued and unpaid interest in respect of such note to, but excluding, the conversion date. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefor or pay cash with respect to notes being converted. This risk will be exacerbated if we do not receive stockholder approval to amend our certificate of incorporation to effect a reverse stock split or to increase or authorized shares of common stock.

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In addition, our ability to repurchase notes or to pay cash upon conversions of notes may be limited by law, regulatory authority or agreements governing our existing and future indebtedness. Our failure to repurchase the notes at a time when the repurchase is required by the respective indenture or to pay cash upon conversions of notes as required by the respective indenture would constitute a default under the indenture for that series of convertible notes and could also lead to a default under the indenture for the other series of convertible notes. A default under the indenture governing the notes or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or to pay cash upon conversions of notes.

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The accounting method for the convertible debt securities that may be settled in cash, such as our senior convertible notes, could have a material effect on our reported financial results.

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In August 2020, the Financial Accounting Standards Board published Accounting Standards Update 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which amends the accounting standards for convertible debt instruments that may be settled entirely or partially in cash upon conversion. Under ASU 2020-06, embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Accounting Standards Certification 815: Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument is accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as a derivative. In addition, ASU 2020-06 eliminates the ability to use the treasury stock method for calculating diluted earnings per share for convertible debt instruments whose principal amount may be settled using shares. Instead, ASU 2020-06 requires application of the “if-converted” method for calculating diluted earnings per share.

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We will be permitted to settle conversions of our senior convertible notes in cash, shares of our common stock, or a combination thereof; therefore, the “if-converted” method for calculating diluted earnings per share will be required with respect to the notes. Under that method, diluted earnings per share would generally be calculated assuming that all of the notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the “if-converted” method may reduce our reported diluted earnings per share.

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These accounting standards have impacted and may in the future require us to reflect the senior convertible notes in a manner that adversely affects our reported diluted earnings per share, which could adversely affect our reported or future financial results and the trading price of our common stock.