Filing identity and business context
The supplied filing is Second Sight Medical Products, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2021—not a filing identified as Vivani Medical, Inc. Investors should verify the issuer and filing before relying on this summary.
Second Sight develops visual prosthetic devices. It had stopped marketing Argus II and was focusing resources on Orion, an investigational visual cortical prosthesis. The six-subject Orion early feasibility study had resumed after COVID-19 pauses at both sites; the company was evaluating the path to a larger pivotal study. The filing reports no product sales in either first quarter.
Financial results and liquidity
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Net sales | $0 | $0 |
| Operating expenses | $2.843 million | $8.904 million |
| Operating loss / net loss | $2.843 million | $8.904 million operating loss; $8.886 million net loss |
| Net loss per share | $0.12 | $0.57 |
| Operating cash used | $0.778 million | $8.654 million |
| Cash and cash equivalents at quarter-end | $26.862 million | $3.177 million at December 31, 2020 |
| Working capital | $20.7 million | Deficit of $0.9 million at December 31, 2020 |
There was no gross profit or gross margin because sales were zero. Net loss improved year over year, chiefly as research and development and clinical/regulatory spending fell. The financial statements report R&D expense of $0.334 million versus $3.887 million, clinical and regulatory expense of $0.037 million versus $0.914 million, selling and marketing expense of zero versus $0.701 million, and G&A expense of $2.472 million versus $2.021 million. Q1 2020 also included $1.381 million of restructuring charges.
Cash increased mainly because of the March 2021 private placement: the company issued 4.65 million shares at $6.00 per share and reported net proceeds of approximately $24.5 million. Financing cash flow was $24.466 million; investing cash flow was zero. Management estimated the financing would support approximately 18 months of operations.
At March 31, total assets were $28.145 million, total liabilities $7.139 million, and stockholders’ equity $21.006 million. Current debt was $2.2 million: unsecured notes bearing 12% interest, due December 31, 2021. Accrued interest was $82,000. The company also reported $0.335 million in contract liabilities and $0.366 million in operating lease liabilities.
Material changes, outlook, and risks
- The company reported no revenue and expected none until Orion is developed and receives marketing approval. It anticipated increased spending if it resumes or expands Orion development, conducts pivotal trials, or pursues commercialization.
- Management attributed lower R&D and clinical/regulatory spending to staffing reductions, reduced activity, and grant offsets. It said these costs could rise as Orion activity restarts. The NIH approved a second-year grant of $1.4 million on April 6, 2021; further grant funding was subject to annual review and approval.
- The company reported encouraging early Orion results, including better square-localization performance with the system on for five of five tested subjects and reported daily-living benefit for two of two subjects assessed by FLORA. Management cautioned that early results may not predict larger-trial outcomes; no peer-reviewed Orion data were available.
- The FDA approved redesigned Argus 2s external hardware in February 2021. The company was evaluating whether or when to produce it and expected it might be adapted for Orion. Orion remained investigational; pivotal-trial plans, validation of the proposed efficacy endpoint, regulatory pathway, and commercialization timing were uncertain.
- The company stated it had recurring losses and negative operating cash flows, depended on additional capital, and had substantial doubt-related going-concern risk. It warned that financing might not be available on acceptable terms and that failure to obtain funds could force cuts or delays to development.
- Nasdaq had notified the company of noncompliance with a continued-listing requirement; the company believed its planned May 28, 2021 shareholder meeting would satisfy it, but delisting remained a risk.
- The company terminated its proposed business-combination MOU with Pixium. It accrued $1.0 million in liquidated damages at quarter-end and paid that amount in April. Pixium disputed the termination, claimed approximately $7.3 million in damages, and indicated it would pursue litigation. Separately, the company received an April invoice from Oppenheimer for more than $1.86 million and said it considered the payment claims without merit.
- Three Pixium patent oppositions were pending before the European Patent Office. COVID-19, limited staffing, clinical delays, regulatory uncertainty, and the company’s ability to retain personnel and maintain operations were also identified risks.
Important facts to verify
- Confirm the issuer: the provided filing names Second Sight Medical Products, Inc., while the request metadata names Vivani Medical, Inc.
- Reconcile clinical and regulatory expense: the financial statements show $0.037 million for Q1 2021 and $0.914 million for Q1 2020, while one MD&A passage gives a different Q1 2020 comparison.
- Review the terms, payment status, and potential additional exposure from the Pixium dispute and Oppenheimer invoice.
- Monitor cash use, the December 2021 debt maturity, future financing needs, and whether the stated 18-month runway remains achievable.
- Track Nasdaq listing compliance, Orion study progress and regulatory requirements, and any decisions about Argus 2s production.