Vivani Medical, Inc. — Filing identity and period
Important identity mismatch: The supplied filing is Second Sight Medical Products, Inc.’s Form 10-K for the fiscal year ended December 31, 2021, filed March 28, 2022. It does not identify Vivani Medical, Inc. as the registrant. Confirm that this filing is the intended company and period before relying on the figures below. The filing reports a full fiscal year, not only fourth-quarter results.
Business context
Second Sight was developing Orion, an implantable visual cortical prosthesis intended to restore artificial vision, and had stopped marketing Argus II, its earlier retinal prosthesis. The company had no product sales in 2021 or 2020 and depended on equity financing and grants to fund operations.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Net sales | $0 | $0 |
| Operating expenses | $9.1 million | $15.4 million |
| Operating loss | $8.9 million | $14.9 million |
| Net loss | $8.9 million | $14.9 million |
| Net loss per share | $0.27 | $0.72 |
| Cash used in operating activities | $9.2 million | $16.8 million |
- Reported cost of sales was negative $0.13 million in 2021 and negative $0.50 million in 2020, reflecting warranty-liability reductions after Argus II sales ceased; gross profit and gross margin are not meaningful measures with no sales.
- Cash and cash equivalents were $69.6 million at year-end 2021, versus $3.2 million a year earlier. Current assets were $70.5 million and current liabilities $2.5 million; working capital was $68.0 million, compared with a $0.9 million deficit at year-end 2020.
- Financing activities provided $75.6 million in 2021, principally from $77.8 million net proceeds from common-stock issuances, partly offset by $2.2 million of debt repayment. The company issued 4.65 million shares in a March private placement and 11.5 million shares in a June public offering.
- There was no debt outstanding at December 31, 2021. The $2.2 million of unsecured 12% notes borrowed in December 2020, including a loan from the board chair, were repaid in 2021.
- Stockholders’ equity was $68.4 million, compared with a $0.7 million deficit in 2020; accumulated deficit was $328.6 million.
Changes versus the prior year
- Net loss narrowed by $6.0 million, mainly as operating expenses fell by $6.3 million following the discontinuation of Argus II commercial activity and reduced staffing and development activity. R&D declined 51% to $2.4 million; clinical and regulatory costs fell 78% to $0.4 million; selling and marketing expense was zero.
- G&A increased 6% to $6.3 million, primarily due to legal and terminated-merger costs.
- Operating cash use decreased by $7.6 million year over year. Year-end cash rose substantially following the 2021 equity financings.
Outlook, risks, contingencies, and unusual items
- Orion development: In the six-subject early feasibility study, five participants completed 36-month visual-function tests: all five performed better with the system on for square localization and direction of motion; two had measurable grating visual acuity with the system on. Four of four completing the FLORA assessment at 36 months had positive or mildly positive results. These small-study findings are preliminary, not peer-reviewed, and do not establish pivotal-trial or commercial success.
- The FDA had designated Orion for its Breakthrough Devices Program. The company was still discussing the pivotal-trial pathway and design; management believed a premarket study would require at least 45 subjects and at least 12 months of follow-up per participant. FLORA validation was delayed by COVID-19. The filing gives no firm trial start, approval, launch, or revenue guidance.
- Liquidity outlook is inconsistent within the filing: Several passages estimate available cash can fund planned obligations for at least 24 months, while another states the company lacks sufficient funds to operate at current levels for at least 12 months from the report date. The filing cautions that funding needs may arise sooner and further financing may not be available on acceptable terms.
- Clinical and operating risks: COVID-19 disrupted clinical visits and FLORA validation, and could affect suppliers. Three of six early-feasibility participants had devices explanted at their request; analysis of the later explants was incomplete. The company also cited sole-source suppliers, limited manufacturing scale, staffing constraints, regulatory uncertainty, reimbursement needs, and potential dilution as material risks.
- Proposed NPM merger, subsequent event: On February 4, 2022, Second Sight agreed to merge with Nano Precision Medical, Inc. and provided NPM an $8 million SAFE advance pending closing. Completion required approvals and other conditions. Depending on termination circumstances, Second Sight could owe a $1 million or $5 million termination fee; if the merger failed, recovery of the advance was uncertain. Certain directors had material NPM interests.
- Litigation and contingencies: Pixium claimed approximately €5.1 million (about $5.6 million) in a dispute over termination of a proposed combination; Second Sight had paid Pixium $1 million and disputed further liability. The company also disputed an Oppenheimer invoice exceeding $1.86 million. A separate claim seeking at least $2 million was dismissed, and the appeal was abandoned in March 2022. The company accrued $100,000 related to California board-diversity requirements and disclosed noncompliance.
- Management reported effective disclosure controls and internal control over financial reporting. The independent auditor gave an unqualified opinion on the 2021 financial statements; it did not provide an internal-control attestation. No 2021 auditor going-concern paragraph appears in the supplied text, but funding dependence and conflicting management runway statements remain important.
Key facts investors should verify
- Whether the Second Sight 2021 Form 10-K is actually the intended filing for Vivani Medical, Inc.
- The company’s current cash runway and operating plan, reconciling the filing’s 24-month and less-than-12-month liquidity statements.
- Current status, financing, closing conditions, and termination provisions of the NPM merger and the $8 million SAFE advance.
- Updated Orion study results, explant analyses, FDA alignment, pivotal-trial timing and enrollment, and FLORA validation status.
- Current status and potential exposure from the Pixium and Oppenheimer disputes, and the accrued board-diversity contingency.
- Subsequent financing, share-count changes, and dilution from warrants and other securities; the filing reported 39.4 million common shares and 7.68 million warrants outstanding as of March 23, 2022.