Business Context and Reporting Period
This Form 8-K was filed by Second Sight Medical Products, Inc. (trading symbol: EYES) on March 23, 2021, with the report date of March 23, 2021. The filing discloses the entry into a material definitive agreement regarding a private placement of common stock and the termination of a prior term sheet with Hudson Bay Capital Management. The company is incorporated in California and its principal executive offices are located in Sylmar, California.
Key Financial Metrics and Transaction Details
- Private Placement Proceeds: The company issued 4,650,000 shares of common stock at a purchase price of $6.00 per share.
- Gross Proceeds: $27,900,000 (before placement agent fees, legal fees, and other offering expenses).
- Closing Date: The transaction closed on March 26, 2021.
- Placement Agent Fees: ThinkEquity was engaged as the placement agent. The fee was 6.5% of the aggregate purchase price, less $50,000.
- Termination Payment: The company paid Hudson Bay Capital Management $1,350,000 plus $50,000 in legal fees to terminate a prior term sheet.
- Use of Proceeds: Net cash proceeds are intended for general corporate purposes and working capital.
Note: This filing does not provide revenue, profit, cash flow, margins, or debt figures for the company's operating results.
Material Changes and Agreements
The primary material change is the successful execution of a private placement exempt under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. Additionally, the company entered into a Termination Agreement with Hudson Bay Capital Management (HB). Under the previous term sheet, HB held exclusivity rights and could have demanded $2.5 million or 50% participation in an alternative financing. HB waived these rights in exchange for the termination payment and participation in the current private placement.
Guidance, Outlook, and Risks
The company intends to use the net proceeds to provide working capital. The filing includes a Registration Rights Agreement requiring the company to file a resale registration statement within 45 days of the agreement date (or 15 days if a specific Memorandum of Understanding with Pixium Vision is terminated). Failure to meet filing deadlines or keep the statement effective may result in liquidated damages payable to purchasers.
Risks and Contingencies:
- Forward-looking statements regarding the use of proceeds are subject to uncertainties, including changes in laws, economic factors, and the impact of COVID-19.
- The company faces potential liquidated damages if it fails to meet the registration statement deadlines specified in the Registration Rights Agreement.
- Investors are cautioned not to rely on representations and warranties in the Securities Purchase Agreement as statements of fact regarding the company's condition.
Important Facts for Investor Verification
- Verify the exact net proceeds after deducting the 6.5% placement fee and other offering expenses.
- Confirm the status of the Resale Registration Statement filing deadline (45 days from March 23, 2021).
- Review the company's Form 10-K for the year ended December 31, 2020, for detailed risk factors and historical financial data not included in this 8-K.
- Monitor the relationship with Pixium Vision, as its termination of the Memorandum of Understanding would accelerate the registration filing deadline to 15 days.