10-Q

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, DC 20549

FORM 10-Q

(Mark One) 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-36747

Second Sight Medical Products, Inc.

(Exact name of Registrant as specified in its charter)

California	02-0692322
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

13170 Telfair Avenue,   Sylmar, CA 91342 

(Address of principal executive offices, including zip code)

(818) 833-5000 

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	EYES	NASDAQ
Warrants	EYESW	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☒

As of August 8, 2022, the registrant had 39,409,176 shares of common stock, no par value per share and 7,680,938 warrants, outstanding.

SECOND SIGHT MEDICAL PRODUCTS, INC.

AND SUBSIDIARY 

FORM 10-Q 

TABLE OF CONTENTS 

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Equity for each of the three-month periods ended during the six months ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURES		26

Part I. Financial Statements

Item 1. Financial Statements

SECOND SIGHT MEDICAL PRODUCTS, INC.

AND SUBSIDIARY

Condensed Consolidated Balance Sheets (unaudited) 

(in thousands)

	June 30,			December 31,
	2022			2021
ASSETS
Current assets:
Cash and cash equivalents	$	56,377		$	69,593
Prepaid expenses and other current assets		1,012			914
Total current assets		57,389			70,507
Property and equipment, net		103			117
SAFE (see Note 1)		8,000			—
Right-of-use assets		140			228
Deposits and other assets		17			27
Total assets	$	65,649		$	70,879
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	966		$	519
Accrued expenses		796			548
Accrued compensation expense		678			748
Accrued clinical trial expenses		—			462
Current operating lease liabilities		151			185
Total current liabilities		2,591			2,462
Long term operating lease liabilities		—			52
Total liabilities		2,591			2,514
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value, 10,000 shares authorized; none outstanding		—			—
Common stock, no par value; 300,000 shares authorized; shares issued and outstanding: 39,409 as of June 30, 2022 and December 31, 2021		347,940			347,940
Additional paid-in capital		49,415			49,389
Accumulated other comprehensive loss		(424	)		(379	)
Accumulated deficit		(333,873	)		(328,585	)
Total stockholders’ equity		63,058			68,365
Total liabilities and stockholders’ equity	$	65,649		$	70,879

See accompanying notes.

3 

SECOND SIGHT MEDICAL PRODUCTS, INC. 

AND SUBSIDIARY

Condensed Consolidated Statements of Operations (unaudited) 

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Net sales	$	—		$	—		$	—		$	—
Cost of sales		—			—			—			—
Gross profit		—			—			—			—
Operating expenses:
Research and development, net of grants	$	843		$	695		$	1,488		$	1,029
Clinical and regulatory, net of grants		161			263			266			300
General and administrative		2,125			1,338			3,591			3,810
Total operating expenses		3,129			2,296			5,345			5,139
Loss from operations		(3,129	)		(2,296	)		(5,345	)		(5,139	)
Other income (expense), net		53			2			57			2
Net loss	$	(3,076	)	$	(2,294	)	$	(5,288	)	$	(5,137	)
Net loss per common share – basic and diluted	$	(0.08	)	$	(0.08	)	$	(0.13	)	$	(0.20	)
Weighted average common shares outstanding – basic and diluted		39,409			28,667			39,409			26,117

See accompanying notes to the condensed consolidated financial statements.

4 

SECOND SIGHT MEDICAL PRODUCTS, INC. 

AND SUBSIDIARY

Condensed Consolidated Statements of Comprehensive Loss (unaudited) 

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Net loss	$	(3,076	)	$	(2,294	)	$	(5,288	)	$	(5,137	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(32	)		25			(45	)		61
Comprehensive loss	$	(3,108	)	$	(2,269	)	$	(5,333	)	$	(5,076	)

See accompanying notes to the condensed consolidated financial statements. 

5 

SECOND SIGHT MEDICAL PRODUCTS, INC. 

AND SUBSIDIARY

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (unaudited) 

(in thousands)

							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity(Deficit)
Balance, December 31, 2020		23,214	$	270,126	$	49,314	$	(448	)	$	(319,664	)	$	(672	)
Issuance of shares of common stock in connection with private placement		4,650		24,451		—		—			—			24,451
Warrants exercised		44		15		—		—			—			15
Stock-based compensation expense		—		—		19		—			—			19
Net loss		—		—		—		—			(2,843	)		(2,843	)
Foreign currency translation adjustment		—		—		—		36			—			36
Balance, March 31, 2021		27,908	$	294,592	$	49,333	$	(412	)	$	(322,507	)	$	21,006
Issuance of shares of common stock in underwritten public offering		11,500		53,338		—		—			—			53,338
Warrants exercised		1		10		—		—			—			10
Stock-based compensation expense		—		—		19		—			—			19
Net loss		—		—		—		—			(2,294	)		(2,294	)
Foreign currency translation adjustment		—		—		—		25			—			25
Balance, June 30, 2021		39,409	$	347,940	$	49,352	$	(387	)	$	(324,801	)	$	72,104

							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity(Deficit)
Balance, December 31, 2021		39,409	$	347,940	$	49,389	$	(379	)	$	(328,585	)	$	68,365
Stock-based compensation expense		—		—		13		—			—			13
Net loss		—		—		—		—			(2,212	)		(2,212	)
Foreign currency translation adjustment		—		—		—		(13	)		—			(13	)
Balance, March 31, 2022		39,409	$	347,940	$	49,402	$	(392	)	$	(330,797	)	$	66,153
Stock-based compensation expense		—		—		13		—			—			13
Net loss		—		—		—		—			(3,076	)		(3,076	)
Foreign currency translation adjustment		—		—		—		(32	)		—			(32
Balance, June 30, 2022		39,409	$	347,940	$	49,415	$	(424	)	$	(333,873	)	$	63,058

6 

SECOND SIGHT MEDICAL PRODUCTS, INC. 

AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows 

(in thousands) 

	Six Months Ended June 30,
	2022			2021
	(unaudited)
Cash flows from operating activities:
Net loss	$	(5,288	)	$	(5,137	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		31			39
Stock-based compensation		26			38
Non-cash lease expense		2			13
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(87	)		(515	)
Accounts payable		433			169
Accrued expenses		218			327
Accrued compensation expenses		(70	)		234
Accrued clinical trial expenses		(462	)		(131	)
Net cash used in operating activities		(5,197	)		(4,963	)
Cash flows from investing activities:
SAFE (see Note 1)		(8,000	)		—
Purchases of property and equipment		(18	)		—
Net cash used in investing activities		(8,018	)		—
Cash flows from financing activities:
Net proceeds from sale of common stock and exercise of warrants		—			77,814
Repayment of debt		—			(2,200	)
Net cash provided by financing activities		—			75,614
Effect of exchange rate changes on cash and cash equivalents		(1	)		17
Cash and cash equivalents:
Net increase (decrease)		(13,216	)		70,668
Balance at beginning of period		69,593			3,177
Balance at end of period	$	56,377		$	73,845
Supplemental disclosures of cash flow information:
Cash paid during the period ended for:
Interest	$	—		$	135

See accompanying notes. 

7 

SECOND SIGHT MEDICAL PRODUCTS, INC. 

AND SUBSIDIARY 

Notes to Condensed Consolidated Financial Statements 

(unaudited)

1. Organization and Business Operations

Second Sight Medical Products, Inc. (“Second Sight,” the “Company,” “we,” “us,” “our” or similar terms) has developed, manufactured and marketed implantable visual prosthetics that are intended to deliver useful artificial vision to blind individuals. We are a recognized global leader in neuromodulation devices for blindness, and are committed to developing new technologies to treat the broadest population of sight-impaired individuals.

Agreement and Plan of Merger with Nano Precision Medical, Inc.

As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on February 8, 2022, on February 4, 2022, Second Sight entered into the agreement and plan of merger (the “Merger Agreement”) with Nano Precision Medical, Inc., a California corporation (“NPM”), and, upon and subject to the execution of a joinder, NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, NPM will merge with and into Merger Sub (the “Merger”), and upon consummation of the Merger, Merger Sub will cease to exist and NPM will become a wholly-owned subsidiary of the Company. Upon completion of the Merger and subject to shareholder approval, the Company will change its name as the Company and NPM may agree in the future and change its trading symbol as NPM requests in writing following consultation with Nasdaq. Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, the securities of NPM will be converted into the right to receive an aggregate of approximately 134,349,464 shares of the Company’s common stock (the “Merger Shares”) representing approximately 77.32% of the total issued and outstanding shares of common stock of the Company on a fully converted basis, including, without limitation, giving effect to the conversion of all options, warrants, and any and all other convertible securities. The Merger will involve change of control and may be consummated only following the approval of the Company’s shareholders. The Company filed a Registration Statement on Form S-4 on May 13, 2022, as amended, in connection with the Merger to register the Merger Shares, which registration statement is currently effective. The Company’s shareholders approved the Merger on July 27, 2022.

SAFE Agreement

On February 4, 2022, in connection with the Merger, Second Sight and NPM also entered into a Simple Agreement for Future Equity (“SAFE”) whereby Second Sight would provide to NPM, pending closing of the Merger, an investment advance of $8 million which, effective upon the termination date of the Merger Agreement without completion of the Merger, will result in NPM’s issuing to Second Sight that number of shares of NPM common stock which following that issuance will equal not less than 2.133% of the issued and outstanding shares of NPM common stock assuming exercise or conversion of all outstanding vested and unvested options, warrants, and convertible securities. In the event NPM completes an equity financing at a lower valuation, Second Sight may be eligible to receive additional shares of NPM common stock as set forth in the SAFE. If the Merger is completed, the SAFE will terminate. The SAFE is classified as a marked-to-market asset pursuant to ASC 480, Distinguishing Liabilities from Equity, due to the potential variability at the time of share settlement. The carrying value of the SAFE as of June 30, 2022 was determined to approximate fair value due to proximity to the issuance date and the significant probability of a successful merger.

Product and Clinical Development Plans

Leveraging our 20 years of experience in neuromodulation for vision, we are developing the Orion^® Visual Cortical Prosthesis System (“Orion”), an implanted cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes, including glaucoma, diabetic retinopathy, optic nerve injury or disease and eye injury. Orion is intended to convert images captured by a miniature video camera mounted on glasses into a series of small electrical pulses. The device is designed to bypass diseased or injured eye anatomy and to transmit these electrical pulses wirelessly to an array of electrodes implanted on the surface of the brain’s visual cortex, where it is intended to provide the perception of patterns of light. We are conducting an Early Feasibility Study of the Orion device at the Ronald Reagan UCLA Medical Center in Los Angeles (“UCLA”) and Baylor College of Medicine in Houston (“Baylor”). Regularly scheduled visits at both sites were paused in mid-March 2020 due to the coronavirus outbreak, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36-month results, all of which were measured after the study resumed, indicate to us that:

● We have a good safety profile. Five subjects experienced a total of fourteen adverse events (AEs) related to the device or to the surgery, through February 2022. One was considered a serious adverse event (SAE), and all of the adverse events were in the expected category. The one SAE occurred at about three months post-implant, was resolved quickly, and did not require a hospital stay. There have been no serious adverse events due to the device or surgery since June 2018.

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● The efficacy data is encouraging. We measure efficacy by looking at three measures of visual function: The first is square localization, where Orion subjects sit in front of a touch screen and are asked to touch within the boundaries of a square when it appears. The second is direction of motion, where subjects are asked to identify the direction and motion of lines on a screen. The third is grating visual acuity, a measure of visual acuity that is adapted for very low vision. Five subjects have completed these tests at 36-months. For these 36-month results, on square localization, five of five subjects tested in our feasibility study performed significantly better with the system on than off. On direction of motion, five of five performed better with the system on than off. On grating visual acuity, two of five tested had measurable visual acuity on the scale of this test (versus none who can do it with the device off). Another efficacy measurement of day-to-day functionality and benefit is FLORA, an acronym for Functional Low-Vision Observer Rated Assessment. FLORA is an assessment performed by an independent, third-party low vision orientation and mobility specialist who spends time with each of the subjects in their homes. The specialist asks each of the subjects a series of questions and also observes them performing 15 or more daily living tasks, such as finding light sources, following a sidewalk, or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral, or if it is actually hurting the abilities of subjects to perform these tasks. FLORA results to date show that 4 out of 4 completing the FLORA at 36 months had positive or mild positive results indicating the Orion system is providing benefit. We reached agreement with the FDA in the fourth quarter of 2019 to utilize a revised version of FLORA as our primary efficacy endpoint in our pivotal trial for Orion, pending successful validation of the instrument.

No peer-reviewed data is available yet for the Orion system. We are currently negotiating the clinical and regulatory pathway to commercialization with the FDA as part of the Breakthrough Devices Program.

In November 2017, the FDA granted Breakthrough Devices Program designation for the Orion. This designation is given to a few select medical devices in order to provide more effective treatment of life-threatening or irreversibly debilitating diseases or conditions. This program is intended to help patients have more timely access to these medical devices by expediting their development, assessment, and review.

On February 26, 2021, the U.S. Food and Drug Administration (FDA) approved the Argus 2s Retinal Prosthesis System, a redesigned set of external hardware (glasses and video processing unit) initially for use in combination with previously implanted Argus II systems for the treatment of retinitis pigmentosa (RP). The Company expects that the Argus 2s will be adapted to be the external system for the next generation Orion Visual Cortical Prosthesis System currently under development. In addition to ergonomic improvements, the Argus 2s system offers significantly more processing power, potentially allowing for improved video processing.

Our principal offices are located in Los Angeles, California.

In 2007, Second Sight formed Second Sight Medical Products (Switzerland) Sàrl, initially to manage clinical trials and sales and marketing in Europe, the Middle East and Asia-Pacific, and more recently for the research of future technologies. As the laws of Switzerland require at least two corporate stockholders, Second Sight Medical Products (Switzerland) Sàrl is 99.5% owned directly by us and 0.5% owned by an executive of Second Sight as of June 30, 2022. Accordingly, Second Sight Medical Products (Switzerland) Sàrl is considered 100% owned for financial statement purposes and is consolidated with Second Sight for all periods presented. We have closed our foreign operations and expect final dissolution of this entity in 2023.

Market Development Plans

Orion. By further developing our visual cortical prosthesis, Orion, we believe we may be able to significantly expand our market to include nearly all profoundly blind individuals. The only notable exceptions for potential use of the Orion are those who are blind due to otherwise currently treatable diseases, individuals who are born blind, or blindness due to direct damage of the visual cortex, which is rare. However, of the estimated 36 million blind people worldwide, there are approximately 5.8 million people who are legally blind due to causes that are not otherwise treatable. We continue to develop and refine our estimates of the potential addressable market size as we evaluate the commercial prospects for Orion using a combination of published sources, third party market research, and physician feedback. We currently estimate over 500,000 individuals in the US are legally blind due to retinitis pigmentosa, glaucoma, diabetic retinopathy, optic nerve disease and eye injury. Of this population, we estimate the potential US addressable market is between 50,000 and 100,000 individuals with bi-lateral blindness at the light-perception level or worse. Our marketing approvals by the FDA and other regulatory agencies will ultimately determine the subset of these patients who are eligible for the Orion based on our clinical trials and the associated results.

Our objective in designing and developing the Orion visual prosthesis system is to bypass the optic nerve and directly stimulate the part of the brain responsible for human vision. An Early Feasibility Study of the Orion device is currently underway at UCLA and Baylor College of Medicine. Regularly scheduled visits at both sites were placed on hold in mid-March due to Covid-19, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36-month results indicate a good safety profile with encouraging efficacy data and benefits in helping subjects perform their daily living tasks. We believe these data are encouraging and support advancement of Orion into a larger pivotal clinical study. Early promising results are not necessarily indicative of results which may be obtained in large clinical trials. No assurance can be given that we will achieve similar results in our larger Orion clinical trials. No peer-reviewed data is available yet for the Orion system.

9 

COVID-19 Pandemic

We are requiring our employees to adhere to the local and state guidelines regarding the COVID-19 pandemic, and use their best judgement to work remotely or work in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available, restricting the ability to do business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.

In addition, our clinical trials have been affected by the COVID-19 outbreak. Patient visits in ongoing clinical trials were paused, for example, due to prioritization of hospital resources toward the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. Also, some of our suppliers of certain materials used in the development of our product candidates are located in areas impacted by COVID-19 which could limit our ability to obtain sufficient materials for our product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets, and may result in an economic downturn that could affect demand for our product candidates, if approved, and impact our operating results. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the continued global economic impact of the pandemic. We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

Liquidity

From inception, our operations have been funded primarily through the sales of our common stock and warrants, as well as from the issuance of convertible debt, research and clinical grants, and limited product revenue generated from the sale of our Argus II product. We have funded our business since 2020 primarily through the following transactions:

● On June 25, 2021, we closed an underwritten public offering of 11,500,000 shares of common stock at a price of $5.00 per share for aggregate net proceeds of $53.3 million

● On March 23, 2021, we closed our private placement to seven institutional investors of 4,650,000 shares of common stock at a price of $6.00 per share for aggregate net proceeds of approximately $24.5 million

We were awarded a $1.6 million grant (with the intent to fund $6.4 million over five years subject to annual review and approval) from the National Institutes of Health (NIH) to fund the “Early Feasibility Clinical Trial of a Visual Cortical Prosthesis” that commenced in January 2018. Our second year grant of $1.4 million was approved on April 6, 2021 and our third year grant of $1.4 million was approved on May 12, 2021 and the fourth year grant of $1.1 million was approved on July 18, 2022.  

Our financial statements have been presented on the basis that our business is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel medical device, including limitations on our operating capital resources. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future.

On March 31, 2020, due to the COVID-19 pandemic and related inability to secure additional funding, we laid off the majority of our employees and reduced our operating expenses significantly to allow for our continuing business operations.  We continue to advance the development of our Orion technology and are exploring various strategic options for this technology.       

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2. Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and following the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2021, contained in our Annual Report on Form 10-K filed with the SEC on March 29, 2022. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Significant Accounting Policies

Our significant accounting policies are set forth in Note 2 of the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements

We do not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.

3. Concentration of Risk

Credit Risk

Financial instruments that subject us to concentrations of credit risk consist primarily of cash and money market funds. We maintain cash and money market funds with financial institutions that we deem reputable.

Foreign Operations

The accompanying condensed consolidated financial statements as of June 30, 2022 and December 31, 2021 include gross assets amounting to $0.1 million and $0.1 million, respectively, relating to operations of our subsidiary based in Switzerland.

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4. Fair Value Measurements

The authoritative guidance with respect to fair value establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required.

Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that we have the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives.

Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange based derivatives, mutual funds, and fair-value hedges.

Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

Cash equivalents, which includes money market funds, are the only financial instrument measured and recorded at fair value on our consolidated balance sheet, and they are valued using Level 1 inputs.

Assets measured at fair value on a recurring basis are as follows (in thousands):

	Total		Level 1		Level 2		Level 3
June 30, 2022 (unaudited):
Money market funds	$	56,338	$	56,338	$	—	$	—
December 31, 2021:
Money market funds	$	69,487	$	69,487	$	—	$	—

5. Selected Balance Sheet Detail  

Property and equipment

Property and equipment consisted of the following (in thousands):

	June 30,			December 31,
	2022			2021
Laboratory equipment	$	584		$	584
Computer hardware and software		100			82
		684			666
Accumulated depreciation and amortization		(581	)		(549	)
Property and equipment, net	$	103		$	117

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Contract Liabilities

Contract liabilities which are included in accrued expenses consisted of the following (in thousands):

Beginning balance as of December 31, 2021	$	335
Consideration received in advance of revenue recognition		—
Revenue recognized		—
Ending balance as of June 30, 2022	$	335

Product Warranties

A summary of activity of our warranty liabilities, which are included in accrued expenses, for the six month period ended June 30, 2022 is presented below:

Beginning balance as of December 31, 2021	$	50
Additions		—
Settlements		—
Adjustments and other		—
Ending balance as of June 30, 2022	$	50

Right-of-use assets and operating lease liabilities

We lease certain office space and equipment for our use. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease costs are recognized in the income statement over the lease term on a straight-line basis. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. As most of our leases do not provide an implicit rate, we used our estimated incremental borrowing rate of 10% based on the information available at commencement date in determining the present value of lease payments.      

On January 22, 2021, we entered into a lease agreement, effective February 1, 2021, to sub-lease office space to replace our existing headquarters.  We will pay $17,000 per month, increasing to $17,500 per month on February 1, 2022, plus operating expenses, to lease 17,290 square feet of office space at 13170 Telfair Avenue, Sylmar CA 91342.  Additionally, we received full rent abatement for March 2021, and half rent abatement for March 2022. The sub-lease is for two years and two months.  Neither we nor any affiliates are related to, or otherwise have any other relationship with, the other parties, other than the lease.

Assets	Classification	June 30, 2022		December 31, 2021
Non-current assets	Right-of-use assets	$	140	$	228
Liabilities
Current	Current operating lease liabilities	$	151	$	185
Long term	Long term operating lease liabilities	$	—	$	52

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Cash paid for operating lease liabilities	$	49	$	51		92		68

Rent expense, including common area maintenance charges, was $49,000 and $27,000 and $98,000 and $49,000 during the three and six-month periods ended June 30, 2022 and 2021, respectively.

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6. Equity Securities  

Potentially Dilutive Common Stock Equivalents

As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereof to potentially acquire shares of common stock, from our calculations of net loss per share and weighted average common shares outstanding, as their effect would have been anti-dilutive (in thousands).

	June 30,
	2022		2021
Common stock warrants issued to underwriter		10		10
Common stock warrants issued in rights offerings		7,681		7,681
Common stock options		180		182
		7,871		7,873

7. Warrants

On February 22, 2019, we completed a registered rights offering to existing stockholders in which we sold approximately 5,976,000 units at $5.792 per unit, which was the adjusted closing price of our common stock on that date. Each Unit consisted of a share of our common stock and a warrant to purchase an additional share of our stock for $11.76. The warrants have a five-year life and trade on Nasdaq under the symbol EYESW.

On March 6, 2017, we completed a registered rights offering to existing stockholders in which we sold approximately 1,706,000 units at $11.76 per unit, which was the adjusted closing price of our common stock on that date. Each unit consisted of a share of our comm11.76 on stock and a warrant to purchase an additional share of our stock for $11.76. The warrants had a five-year life but were extended to expire in February, 2024 to coincide with the February 22, 2019 warrants.

As a component of the funding underwriting fee of our May 5, 2020 public underwriting offer, we granted 375,000 warrants at an exercise price of $1.25 which expire on May 5, 2025. At June 30, 2022, 10,125 of the warrants are still outstanding.

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A summary of warrants activity for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares		Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Warrants outstanding as of December 31, 2021		7,691	$	11.75		2.21
Issued		—		—		—
Exercised		—
Forfeited or expired		—
Warrants outstanding as of June 30, 2022		7,691	$	11.75		1.71
Warrants exercisable as of June 30, 2022		7,691	$	11.75		1.71

The warrants outstanding as of June 30, 2022 had $8,000 in intrinsic value.

8. Stock-Based Compensation

A summary of stock option activity under our 2011 Equity Incentive Plan (“2011 Plan”) for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares			Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Options outstanding as of December 31, 2021		182		$	15.68		6.59
Granted		—		$	—
Exercised		—		$	—
Forfeited or expired		(2	)	$	40.00
Options outstanding, vested and expected to vest as of June 30, 2022		180		$	15.47		6.15
Options exercisable as of June 30, 2022		155		$	17.39		5.91

The estimated aggregate intrinsic value of stock options exercisable as of June 30, 2022 was $25,000. As of June 30, 2022, there was $0.1 million of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted average period of 0.75 years.

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We adopted an employee stock purchase plan in June 2015 for all eligible employees. At June 30, 2022 the available number of shares that may be issued under the plan is 77,031.

Stock-based compensation expense recognized for stock-based awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	5	$	5	$	10	$	10
Clinical and regulatory		3		9		6		18
General and administrative		5		5		10		10
Total	$	13	$	19	$	26	$	38

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9. Risk and Uncertainties

COVID-19 has directly and indirectly adversely affected Second Sight and will likely continue to do so for an uncertain period of time. We are asking our employees to adhere to local and state guidelines regarding the COVID-19 pandemic and use their best judgement to work remotely or work in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available, restricting the ability to do business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.

In addition, our clinical trials have been affected by the COVID-19 outbreak. Patient visits in ongoing clinical trials were paused, for example, due to prioritization of hospital resources toward the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. Also, some of our suppliers of certain materials used in the development of our product candidates are located in areas impacted by COVID-19 which could limit our ability to obtain sufficient materials for our product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets and may result in an economic downturn that could affect demand for our product candidates, if approved, and impact our operating results. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the continued global economic impact of the pandemic. We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

10. Litigation, Claims and Assessments

Three oppositions filed by Pixium Vision SA (“Pixium”) are pending in the European Patent Office, each challenging the validity of a European patent owned by us. The outcomes of the challenges are not certain, however, if successful, they may affect our ability to block competitors from utilizing our patented technology. We believe a successful challenge will not have a material effect on our ability to manufacture and sell our products, or otherwise have a material effect on our operations.

As described in the Company’s 10-K for the year ended December 31, 2020, the Company had entered into a Memorandum of Understanding (“MOU”) for a proposed business combination with Pixium. In response to a press release by Pixium dated March 24, 2021, and subsequent communications between us and Pixium, our Board of Directors determined that the business combination with Pixium was not in the best interest of our shareholders. On April 1, 2021, we gave notice to Pixium that we were terminating the MOU between the parties and seeking an amicable resolution of termination amounts that may be due, however no assurance can be given that an amicable resolution will be reached. We accrued $1,000,000 of liquidated damages as contemplated by the MOU in accounts payable as of March 31, 2021 and remitted that amount to Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claims damages of approximately €5.1 million or about $5.2 million at current exchange rates. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000 and thus the Company does not believe any further loss accrual is necessary.

In November 2020, we and Pixium retained Oppenheimer & Co. Inc. as placement agent for a proposed private placement of securities in connection with the Business Combination. On April 1, 2021, we received an invoice from Oppenheimer for more than $1.86 million. This amount includes a requested commission of 6.5% on $27.9 million raised in the private placement. We believe that claims for payment presented by this invoice are without merit.

We are party to litigation arising in the ordinary course of business. It is our opinion that the outcome of such matters will not have a material effect on our results of operations, however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

10. Subsequent Events

The 2022 Annual Meeting of Shareholders of Second Sight Medical Products Inc. was held on July 27, 2022. Holders of 27,621,649 shares of Second Sight’s common stock were represented at the meeting in person or by proxy, constituting a quorum. A proposal to approve the transactions contemplated by the Agreement and Plan of Merger, dated February 4, 2022, by and between the Company and Nano Precision Medical, Inc., a California corporation (“NPM”), pursuant to which NPM will merge with and into NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of the Company, with NPM surviving as a wholly-owned subsidiary of the Company was approved.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited 2021 financial statements and related notes included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 29, 2022. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our products, plans and strategy for our business and related financing, contains forward-looking statements that involve risks and uncertainties, including statements regarding our expected financial results in future periods. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “will,” “would,” “strategy” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, liquidity, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals, insurance reimbursements and product launches, our financing plans and future capital requirements, and statements regarding the anticipated or projected impact of our merger with NPM (as defined below), if and when occurs, on our business, results of operations, financial condition or prospects, the materially adverse impact of the recent COVID-19 coronavirus pandemic and related public health measures on our business. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. We assume no obligations to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect actual outcomes.

Second Sight Medical Products, Inc. (“Second Sight,” the “Company,” “we,” “us,” “our” or similar terms) has developed, manufactured and marketed implantable visual prosthetics that are intended to deliver useful artificial vision to blind individuals. We are a recognized global leader in neuromodulation devices for blindness and are committed to developing new technologies to treat the broadest population of sight-impaired individuals.

Leveraging our 20 years of experience in neuromodulation for vision, we are developing the Orion^® Visual Cortical Prosthesis System (“Orion”), an implanted cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes, including glaucoma, diabetic retinopathy, optic nerve injury or disease and eye injury. Orion is intended to convert images captured by a miniature video camera mounted on glasses into a series of small electrical pulses. The device is designed to bypass diseased or injured eye anatomy and to transmit these electrical pulses wirelessly to an array of electrodes implanted on the surface of the brain’s visual cortex, where it is intended to provide the perception of patterns of light. We are conducting an Early Feasibility Study of the Orion device at the Ronald Reagan UCLA Medical Center in Los Angeles (“UCLA”) and Baylor College of Medicine in Houston (“Baylor”). Regularly scheduled visits at both sites were paused in mid-March 2020 due to the coronavirus outbreak, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36-month results, all of which were measured after the study resumed, indicate to us that:

● We have a good safety profile. Five subjects experienced a total of fourteen adverse events (AEs) related to the device or to the surgery, through February 2022. One was considered a serious adverse event (SAE), and all of the adverse events were in the expected category. The one SAE occurred at about three months post-implant, was resolved quickly, and did not require a hospital stay. There have been no serious adverse events due to the device or surgery since June 2018.

● The efficacy data is encouraging. We measure efficacy by looking at three measures of visual function: The first is square localization, where Orion subjects sit in front of a touch screen and are asked to touch within the boundaries of a square when it appears. The second is direction of motion, where subjects are asked to identify the direction and motion of lines on a screen. The third is grating visual acuity, a measure of visual acuity that is adapted for very low vision. Five subjects have completed these tests at 36-months. For these 36-month results, on square localization, five of five subjects tested in our feasibility study performed significantly better with the system on than off. On direction of motion, five of five performed better with the system on than off. On grating visual acuity, two of five tested had measurable visual acuity on the scale of this test (versus none who can do it with the device off). Another efficacy measurement of day-to-day functionality and benefit is FLORA, an acronym for Functional Low-Vision Observer Rated Assessment. FLORA is an assessment performed by an independent, third-party low vision orientation and mobility specialist who spends time with each of the subjects in their homes. The specialist asks each of the subjects a series of questions and also observes them performing 15 or more daily living tasks, such as finding light sources, following a sidewalk, or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral, or if it is actually hurting the abilities of subjects to perform these tasks. FLORA results to date show that 4 out of 4 completing the FLORA at 36 months had positive or mild positive results indicating the Orion system is providing benefit. We reached agreement with the FDA in the fourth quarter of 2019 to utilize a revised version of FLORA as our primary efficacy endpoint in our pivotal trial for Orion, pending successful validation of the instrument.

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No peer-reviewed data is available yet for the Orion system. We are currently negotiating the clinical and regulatory pathway to commercialization with the FDA as part of the Breakthrough Devices Program.

In November 2017, the FDA granted Breakthrough Devices Program designation for the Orion. This designation is given to a few select medical devices in order to provide more effective treatment of life-threatening or irreversibly debilitating diseases or conditions. This program is intended to help patients have more timely access to these medical devices by expediting their development, assessment, and review.

On February 26, 2021, the U.S. Food and Drug Administration (FDA) approved the Argus 2s Retinal Prosthesis System, a redesigned set of external hardware (glasses and video processing unit) initially for use in combination with previously implanted Argus II systems for the treatment of retinitis pigmentosa (RP). The Company expects that the Argus 2s will be adapted to be the external system for the next generation Orion Visual Cortical Prosthesis System currently under development. In addition to ergonomic improvements, the Argus 2s system offers significantly more processing power, potentially allowing for improved video processing.

Market Development Plans

Orion. By further developing our visual cortical prosthesis, Orion, we believe we may be able to significantly expand our market to include nearly all profoundly blind individuals. The only notable exceptions for potential use of the Orion are those who are blind due to otherwise currently treatable diseases, individuals who are born blind, or blindness due to direct damage of the visual cortex, which is rare. However, of the estimated 36 million blind people worldwide, there are approximately 5.8 million people who are legally blind due to causes that are not otherwise treatable. We continue to develop and refine our estimates of the potential addressable market size as we evaluate the commercial prospects for Orion using a combination of published sources, third party market research, and physician feedback. We currently estimate over 500,000 individuals in the US are legally blind due to retinitis pigmentosa, glaucoma, diabetic retinopathy, optic nerve disease and eye injury. Of this population, we estimate the potential US addressable market is between 50,000 and 100,000 individuals with bi-lateral blindness at the light-perception level or worse. Our marketing approvals by the FDA and other regulatory agencies will ultimately determine the subset of these patients who are eligible for the Orion based on our clinical trials and the associated results.

Our objective in designing and developing the Orion visual prosthesis system is to bypass the optic nerve and directly stimulate the part of the brain responsible for human vision. An Early Feasibility Study of the Orion device is currently underway at UCLA and Baylor College of Medicine. Regularly scheduled visits at both sites were placed on hold in mid-March due to Covid-19, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36 month results indicate a good safety profile with encouraging efficacy data and benefits in helping subjects perform their daily living tasks. We believe these data are encouraging and support advancement of Orion into a larger clinical study. Early promising results are not necessarily indicative of results which may be obtained in large clinical trials. No assurance can be given that we will achieve similar results in our larger Orion clinical trials. No peer-reviewed data is available yet for the Orion system.

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Liquidity

From inception, our operations have been funded primarily through the sales of our common stock and warrants, as well as from the issuance of convertible debt, research and clinical grants, and limited product revenue generated from the sale of our Argus II product. We have funded our business since 2020 primarily through the following transactions:

● On June 25, 2021, we closed an underwritten public offering of 11,500,000 shares of common stock at a price of $5.00 per share for aggregate net proceeds of $53.3 million

● On March 23, 2021, we closed our private placement to seven institutional investors of 4,650,000 shares of common stock at a price of $6.00 per share for aggregate net proceeds of approximately $24.5 million

We were awarded a $1.6 million grant (with the intent to fund $6.4 million over five years subject to annual review and approval) from the National Institutes of Health (NIH) to fund the “Early Feasibility Clinical Trial of a Visual Cortical Prosthesis” that commenced in January 2018. Our second year grant of $1.4 million was approved on April 6, 2021, our third year grant of $1.4 million was approved on May 12, 2021 and our fourth year grant of $1.1 million was approved on July 18, 2022.

We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel medical device. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future. To finance our operations we will need to raise additional capital, which cannot be assured. Our operating plan may change as a result of many factors currently unknown to us, and we will need to seek additional funds through public or private equity offerings or debt financings, grants, collaborations, strategic partnerships or other sources. However, we may be unable to raise additional capital or enter into such other arrangements when needed on favorable terms or at all. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs, or we may be unable to expand or maintain our operations, maintain our current organization and employee base or otherwise capitalize on our business opportunities, as desired, which could materially and adversely affect our business, financial condition and results of operations.

Merger Agreement 

As discussed in the Notes to Condensed Consolidated Financial Statements of the Company, on February 4, 2022, the Company entered the Merger Agreement. On May 13, 2022, the Company filed a Registration Statement on Form S-4 (the “Registration Statement”) with the SEC in connection with the contemplated Merger, which is currently effective. Shareholders of the Company approved the Merger on July 27, 2022 and the merger is anticipated to be completed in August 2022. We encourage you to review the final proxy statement/prospectus filed with the SEC on June 24, 2022 for more information about the contemplated Merger.

Safe Agreement

On February 4, 2022 and in connection with the Merger discussed in Note 1, NPM and SSMP entered into an agreement (“SAFE”) whereby SSMP would provide to NPM pending closing of the Merger an investment advance of $8 million, which effective upon the termination date of the Merger Agreement without completion of the Merger, will result in NPM’s issuing to SSMP that number of shares of NPM Capital Stock which following that issuance will equal not less than 2.133% of the issued and outstanding shares of NPM capital stock assuming exercise or conversion of all outstanding vested and unvested options, warrants, and convertible securities.

In the event NPM completes an equity financing within one year from the date of termination of the merger at a lower valuation, SSMP may be eligible to receive additional shares of NPM capital stock as set forth in the SAFE. If the Merger is completed, the SAFE will terminate. The SAFE is classified as a marked-to-market asset pursuant to ASC 480, Distinguishing Liabilities from Equity, due to the potential variability at the time of share settlement. The carrying value of the SAFE as of June 30, 2022 was determined to approximate fair value due to proximity to the issuance date and current probability of a successful merger.

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Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) and the requirements of the United States Securities and Exchange Commission require management to make estimates, assumptions and judgments that affect the amounts, liabilities, revenue and expenses reported in the financial statements and the notes to the financial statements. On an ongoing basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.

There have been no other material changes to our critical accounting policies during the six months ended June 30, 2022.

Results of Operations

Operating Expenses. We generally recognize our operating expenses as incurred in three general operational categories: research and development, clinical and regulatory and general and administrative. Our operating expenses also include a non-cash component related to the amortization of stock-based compensation for research and development, clinical and regulatory and general and administrative personnel. We have received grants from institutions or agencies, such as the National Institutes of Health, to help fund the some of the cost of our development efforts. We have recorded the amount of funding received from these grants as reductions to operating expenses.

● Research and development expenses consist primarily of employee compensation and consulting costs related to the design, development, and enhancements of our current and potential future products, offset by grant revenue received in support of specific research projects. We expense our research and development costs as they are incurred. Due to the recent downsizing of our business, we are currently evaluating the path forward for our research and development activities for Orion, including the potential for collaboration with 3^rd parties and/or outsourcing the engineering work for Orion.

● Clinical and regulatory expenses consist primarily of salaries, travel and related expenses for personnel engaged in clinical and regulatory functions, as well as internal and external costs associated with conducting clinical trials and maintaining relationships with regulatory agencies offset by grant revenue received in support of specific clinical research products. We expect clinical and regulatory expenses to be lower in the short-run as we have closed our clinical study activities related to Argus II. In the long-run, we expect clinical and regulatory expenses to increase if and when we conduct a larger clinical study of Orion.

● General and administrative expenses consist primarily of salaries and related expenses for executive, legal, finance, human resources, information technology and administrative personnel, as well as recruiting and professional fees, patent filing and annuity costs, insurance costs and other general corporate expenses, including rent.

Comparison of the Three Months Ended June 30, 2022 and 2021

Research and development expense. Research and development expense increased by $0.1 million, or 21%, to $0.8 million in the second quarter of 2022 from $0.7 million in the second quarter of 2021. The costs increased due to increased use of outside services and additional salaries as we restart our curtailed activity.

Clinical and regulatory expense. Clinical and regulatory expense decreased $0.1 million, or 39%, to $0.2 million in the second quarter of 2022 from $0.3 million in the second quarter of 2021. This decrease is attributable to decreased costs associated with outside services primarily from patient studies.

General and administrative expense. General and administrative expense increased $0.8 million, or 59%, to $2.1 million in the second quarter of 2022 from $1.3 million in the same period of 2021. This increase is attributable to increased legal costs associated with the current merger agreement.

Comparison of the Six Months Ended June 30, 2022 and 2021

Research and development expense. Research and development expense increased by $0.5 million, or 45%, to $1.5 million in the first six months of 2022 from $1.0 million in the same period of 2021. The costs increased due to increased use of outside services and increased salaries as we restart our curtailed activity.

Clinical and regulatory expense. Clinical and regulatory expense decreased $34,000, or 11%, to $266,000 in the first six months of 2022 from $300,000 in the same period of 2021. This decrease is attributable to decreased costs associated with outside services primarily from patient studies.

General and administrative expense. General and administrative expense decreased $0.2 million, or 6%, to $3.6 million in the first six months of 2022 from $3.8 million in the same period of 2021. This decrease is attributable to the termination fee associated with our termination of the MOU which occurred in the first six months of 2021 partially offset by increased legal costs associated with the current merger agreement.

Liquidity and Capital Resources

Our financial statements have been presented on the basis that our business is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel medical device, including limitations on our operating capital resources and uncertain demand for our products. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future. 

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Conducting clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete and we may never generate the necessary data or results required to obtain marketing approval. We do not expect revenues until we are successful in completing the development and obtaining marketing approval for Orion. We expect expenses to increase in connection with our ongoing activities, particularly as we continue clinical trials of Orion, initiate new research and development projects and seek marketing approval for any product candidates that we successfully develop. In addition, if we obtain marketing approval for Orion, we expect to incur significant additional expenses related to sales, marketing, distribution and other commercial infrastructure to commercialize such product. In addition, our product candidates, if approved, may not achieve commercial success. We incur significant costs associated with operating as a public company in a regulated industry.

Until such time, if ever, we can generate substantial product revenues, we anticipate that we will seek to fund our operations through public or private equity or debt financings, grants, collaborations, strategic partnerships or other sources. However, we may be unable to raise additional capital or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity, convertible debt or other equity-linked securities, the ownership interests of some or all of our common stockholders will be diluted, the holders of new equity securities may have priority rights over our existing stockholders and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If adequate funds are not available, we may be required to further curtail operations significantly or to obtain funds by entering into agreements on unattractive terms. If, for example, we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. Our inability to raise capital could have a material adverse effect on our business, financial condition and results of operations.

Cash and cash equivalents decreased by $13.2 million from $69.6 million as of December 31, 2021 to $56.4 million as of June 30, 2022. Working capital was $54.8 million as of June 30, 2022, as compared to $68.0 million as of December 31, 2021, a decrease of $13.2 million primarily as a result of the funding of the SAFE agreement and the current period operating loss. We use our cash and cash equivalents and working capital to fund our operating activities. 

Material Cash Requirements for Known Contractual and Other Obligations

The Merger Agreement as amended provides for the aggregate amount of cash, cash equivalents, and marketable securities of the Company being not less than $63 million less the amount of any advances made to NPM for working capital, in order to consummate the Merger. To date, the Company made an investment advance to NPM in the amount of $8 million under the SAFE, thereby having decreased the available cash requirement of the Merger Agreement to $55 million. The Company currently anticipates that it will be able to satisfy the available cash requirement of the Merger Agreement. 

Cash Flows from Operating Activities

During the first six months of 2022, we used $5.2 million of cash in operating activities, consisting primarily of a net loss of $5.3 million offset by a net change in operating assets and liabilities of $0.1 million. During the first six months of 2021, we used $4.9 million of cash in operating activities, consisting primarily of a net loss of $5.1 million, offset by non-cash charges which provided cash of $0.1 million for depreciation and amortization of property and equipment, stock-based compensation and change in right of use assets offset by a net change in operating assets and liabilities of $0.1 million.

Cash Flows from Investing Activities

Cash used for investing activities in the first six months of 2022 was $8,018,000 and was zero in the first six months of 2021. The $18,000 was used for the purchase of property and equipment and $8.0 million was used for our SAFE agreement.

Cash Flows from Financing Activities

Financing activities provided zero cash in the first six months of 2022. Financing activities provided $75.6 million of cash in the first six months of 2021 $77.8 million from the sale of common stock offset by $2.2 million for repayment of debt.

Off-Balance Sheet Arrangements

At June 30, 2022, we did not have any transactions, obligations or relationships that constitute off-balance sheet arrangements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity

The primary objective of our investment activities is to maintain the safety of principal and preserve liquidity without incurring significant risk. We invest cash in excess of our current needs in money market funds. As of June 30, 2022, our investments consisted solely of money market funds.

Exchange Rate Sensitivity

The majority of our operating expenses were denominated in U.S. dollars. We have not entered into foreign currency forward contracts to hedge our operating expense exposure to foreign currencies, but we may do so in the future. 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures 

Our management, including our Acting Chief Executive Officer (“CEO”) and our Acting Chief Accounting Officer (“CAO”), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. As of June 30, 2022, based on the evaluation of these disclosure controls and procedures, our CEO and CAO have concluded that our disclosure controls and procedures were effective at the reasonable assurance level. 

Changes in Internal Control over Financial Reporting   

There has been no change in our internal control over financial reporting during the six months ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are updating our internal control environment to address changes in our risks in financial reporting to accommodate our reductions in operating activities, reductions in staffing levels, and segregation of duties. Such changes may result in new or reduced controls.

Inherent Limitations on Effectiveness of Controls

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

23 

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

Three oppositions filed by Pixium Vision SA (“Pixium”) are pending in the European Patent Office, each challenging the validity of a European patent owned by us. The outcomes of the challenges are not certain, however, if successful, they may affect our ability to block competitors from utilizing our patented technology. We believe a successful challenge will not have a material effect on our ability to manufacture and sell our products, or otherwise have a material effect on our operations.

As described in the Company’s 10-K for the year ended December 31, 2020, the Company had entered into a Memorandum of Understanding (“MOU”) for a proposed business combination with Pixium. In response to a press release by Pixium dated March 24, 2021, and subsequent communications between us and Pixium, our Board of Directors determined that the business combination with Pixium was not in the best interest of our shareholders. On April 1, 2021, we gave notice to Pixium that we were terminating the MOU between the parties and seeking an amicable resolution of termination amounts that may be due, however no assurance can be given that an amicable resolution will be reached. We accrued $1,000,000 of liquidated damages as contemplated by the MOU in accounts payable as of March 31, 2021 and remitted that amount to Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claim damages of approximately €5.1 million or about $5.2 million at current exchange rates. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000 and thus the Company does not believe any further loss accrual is necessary.

In November 2020, we and Pixium retained Oppenheimer & Co. Inc. as placement agent for a proposed private placement of securities in connection with the Business Combination. On April 1, 2021, we received an invoice from Oppenheimer for more than $1.86 million. This amount includes a requested commission of 6.5% on $27.9 million raised in the private placement. We believe that claims for payment presented by this invoice are without merit.

From time to time, we may be involved in a variety of legal proceedings and claims relating to securities laws, product liability, patent infringement, contract disputes, employment matters and other matters relating to various claims that arise in the normal course of our business in addition to governmental and other regulatory investigations and proceedings. It is our opinion that the outcome of such matters will not have a material adverse effect on our results of operations, however, the results of litigation, proceedings, disputes and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on March 29, 2022. For risk factors concomitant to the Merger, please review the Registration Statement. 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

24 

Item 6. Exhibits

EXHIBIT INDEX

Exhibit No.	Exhibit Description
2.1	Merger Agreement dated February 4, 2022 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 8, 2022).
2.2	Waiver of Available Cash Requirement to the Merger Agreement dated June 15, 2022 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2022).
31.1	Certification of Principal Executive Officer of Second Sight Medical Products, Inc. pursuant to Section 302 of Sarbanes-Oxley Act of 2002.*
31.2	Certification of Principal Financial and Accounting Officer of Second Sight Medical Products, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certifications of Principal Executive Officer and Principal Financial and Accounting Officer of Second Sight Medical Products, Inc.  pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instant Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

* Included herein.

25 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Name	Title	Date
/s/ Scott Dunbar	Acting Chief Executive Officer	August  11, 2022
Scott Dunbar	(Principal Executive Officer)
/s/  Edward Sedo	Acting Chief Accounting Officer	August  11, 2022
Edward Sedo	(Principal Financial and Accounting Officer)

26 

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-
14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott Dunbar, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Second Sight Medical Products, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2022	/s/ Scott Dunbar
	Scott Dunbar
	Acting Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER 

PURSUANT TO RULE 13a-14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT, AS ADOPTED PURSUANT 

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward Sedo, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Second Sight Medical Products, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2022	/s/ Edward Sedo
	Edward Sedo
	Acting Chief Accounting Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1 

Certifications of Principal Executive Officer and Principal Financial Officer 

Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To 

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), Scott Dunbar, Acting Chief Executive Officer (Principal Executive Officer) and Edward Sedo, Acting Chief Accounting Officer (Principal Financial and Accounting Officer) of Second Sight Medical Products, Inc. (the “Company”), each hereby certifies that, to the best of his knowledge:

1. The Quarterly Report of the Company on Form 10-Q (the “Report”) for the six months ended June 30, 2022, to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 11, 2022	/s/ Scott Dunbar
	Scott Dunbar
	Acting Chief Executive Officer
	(Principal Executive Officer)
	/s/ Edward Sedo
	Edward Sedo
	Acting Chief Accounting Officer
	(Principal Financial and Accounting Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Second Sight Medical Products, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2022	Aug. 08, 2022
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	001-36747
Entity Registrant Name	Second Sight Medical Products, Inc.
Entity Central Index Key	0001266806
Entity Tax Identification Number	02-0692322
Entity Incorporation, State or Country Code	CA
Entity Address, Address Line One	13170 Telfair Avenue
Entity Address, City or Town	Sylmar
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91342
City Area Code	(818)
Local Phone Number	833-5000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,409,176
Common Stock [Member]
Title of 12(b) Security	Common Stock
Trading Symbol	EYES
Security Exchange Name	NASDAQ
Warrants
Title of 12(b) Security	Warrants
Trading Symbol	EYESW
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 56,377	$ 69,593
Prepaid expenses and other current assets	1,012	914
Total current assets	57,389	70,507
Property and equipment, net	103	117
SAFE (see Note 1)	8,000
Right-of-use assets	140	228
Deposits and other assets	17	27
Total assets	65,649	70,879
Current liabilities:
Accounts payable	966	519
Accrued expenses	796	548
Accrued compensation expense	678	748
Accrued clinical trial expenses		462
Current operating lease liabilities	151	185
Total current liabilities	2,591	2,462
Long term operating lease liabilities		52
Total liabilities	2,591	2,514
Stockholders’ equity:
Preferred stock, no par value, 10,000 shares authorized; none outstanding
Common stock, no par value; 300,000 shares authorized; shares issued and outstanding: 39,409 as of June 30, 2022 and December 31, 2021	347,940	347,940
Additional paid-in capital	49,415	49,389
Accumulated other comprehensive loss	(424)	(379)
Accumulated deficit	(333,873)	(328,585)
Total stockholders’ equity	63,058	68,365
Total liabilities and stockholders’ equity	$ 65,649	$ 70,879

XML

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares outstanding	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	300,000	300,000
Common stock, shares issued	39,409	39,409
Common stock, shares outstanding	39,409	39,409

XML

Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Net sales
Cost of sales
Gross profit
Operating expenses:
Research and development, net of grants	843	695	1,488	1,029
Clinical and regulatory, net of grants	161	263	266	300
General and administrative	2,125	1,338	3,591	3,810
Total operating expenses	3,129	2,296	5,345	5,139
Loss from operations	(3,129)	(2,296)	(5,345)	(5,139)
Other income (expense), net	53	2	57	2
Net loss	$ (3,076)	$ (2,294)	$ (5,288)	$ (5,137)
Net loss per common share – basic and diluted	$ (0.08)	$ (0.08)	$ (0.13)	$ (0.20)
Weighted average common shares outstanding – basic and diluted	39,409	28,667	39,409	26,117

XML

Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Net loss	$ (3,076)	$ (2,294)	$ (5,288)	$ (5,137)
Other comprehensive income (loss):
Foreign currency translation adjustments	(32)	25	(45)	61
Comprehensive loss	$ (3,108)	$ (2,269)	$ (5,333)	$ (5,076)

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2020	$ 270,126	$ 49,314	$ (448)	$ (319,664)	$ (672)
Beginning Balance ( in shares) at Dec. 31, 2020	23,214
Issuance of shares of common stock in connection with private placement	$ 24,451				24,451
Issuance of shares of common stock in connection with private placement (in shares)	4,650
Warrants exercised	$ 15				15
Warrants exercised (in shares)	44
Stock-based compensation expense		19			19
Net loss				(2,843)	(2,843)
Foreign currency translation adjustment			36		36
Ending balance, value at Mar. 31, 2021	$ 294,592	49,333	(412)	(322,507)	21,006
Ending Balance (in shares) at Mar. 31, 2021	27,908
Beginning balance, value at Dec. 31, 2020	$ 270,126	49,314	(448)	(319,664)	(672)
Beginning Balance ( in shares) at Dec. 31, 2020	23,214
Net loss					(5,137)
Foreign currency translation adjustment					61
Ending balance, value at Jun. 30, 2021	$ 347,940	49,352	(387)	(324,801)	72,104
Ending Balance (in shares) at Jun. 30, 2021	39,409
Beginning balance, value at Mar. 31, 2021	$ 294,592	49,333	(412)	(322,507)	21,006
Beginning Balance ( in shares) at Mar. 31, 2021	27,908
Warrants exercised	$ 10				10
Warrants exercised (in shares)	1
Stock-based compensation expense		19			19
Net loss				(2,294)	(2,294)
Foreign currency translation adjustment			25		25
Issuance of shares of common stock in underwritten public offering	$ 53,338				53,338
Issuance of shares of common stock in underwritten public offering (in shares)	11,500
Ending balance, value at Jun. 30, 2021	$ 347,940	49,352	(387)	(324,801)	72,104
Ending Balance (in shares) at Jun. 30, 2021	39,409
Beginning balance, value at Dec. 31, 2021	$ 347,940	49,389	(379)	(328,585)	$ 68,365
Beginning Balance ( in shares) at Dec. 31, 2021	39,409				39,409
Stock-based compensation expense		13			$ 13
Net loss				(2,212)	(2,212)
Foreign currency translation adjustment			(13)		(13)
Ending balance, value at Mar. 31, 2022	$ 347,940	49,402	(392)	(330,797)	66,153
Ending Balance (in shares) at Mar. 31, 2022	39,409
Beginning balance, value at Dec. 31, 2021	$ 347,940	49,389	(379)	(328,585)	$ 68,365
Beginning Balance ( in shares) at Dec. 31, 2021	39,409				39,409
Net loss					$ (5,288)
Foreign currency translation adjustment					(45)
Ending balance, value at Jun. 30, 2022	$ 347,940	49,415	(424)	(333,873)	$ 63,058
Ending Balance (in shares) at Jun. 30, 2022	39,409				39,409
Beginning balance, value at Mar. 31, 2022	$ 347,940	49,402	(392)	(330,797)	$ 66,153
Beginning Balance ( in shares) at Mar. 31, 2022	39,409
Stock-based compensation expense		13			13
Net loss				(3,076)	(3,076)
Foreign currency translation adjustment			(32)		(32)
Ending balance, value at Jun. 30, 2022	$ 347,940	$ 49,415	$ (424)	$ (333,873)	$ 63,058
Ending Balance (in shares) at Jun. 30, 2022	39,409				39,409

XML

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net loss	$ (5,288)	$ (5,137)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	31	39
Stock-based compensation	26	38
Non-cash lease expense	2	13
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(87)	(515)
Accounts payable	433	169
Accrued expenses	218	327
Accrued compensation expenses	(70)	234
Accrued clinical trial expenses	(462)	(131)
Net cash used in operating activities	(5,197)	(4,963)
Cash flows from investing activities:
SAFE (see Note 1)	(8,000)
Purchases of property and equipment	(18)
Net cash used in investing activities	(8,018)
Cash flows from financing activities:
Net proceeds from sale of common stock and exercise of warrants		77,814
Repayment of debt		(2,200)
Net cash provided by financing activities		75,614
Effect of exchange rate changes on cash and cash equivalents	(1)	17
Cash and cash equivalents:
Net increase (decrease)	(13,216)	70,668
Balance at beginning of period	69,593	3,177
Balance at end of period	56,377	73,845
Cash paid during the period ended for:
Interest		$ 135

XML

Organization and Business Operations

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Operations

1. Organization and Business Operations

Second Sight Medical Products, Inc. (“Second Sight,” the “Company,” “we,” “us,” “our” or similar terms) has developed, manufactured and marketed implantable visual prosthetics that are intended to deliver useful artificial vision to blind individuals. We are a recognized global leader in neuromodulation devices for blindness, and are committed to developing new technologies to treat the broadest population of sight-impaired individuals.

Agreement and Plan of Merger with Nano Precision Medical, Inc.

As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on February 8, 2022, on February 4, 2022, Second Sight entered into the agreement and plan of merger (the “Merger Agreement”) with Nano Precision Medical, Inc., a California corporation (“NPM”), and, upon and subject to the execution of a joinder, NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, NPM will merge with and into Merger Sub (the “Merger”), and upon consummation of the Merger, Merger Sub will cease to exist and NPM will become a wholly-owned subsidiary of the Company. Upon completion of the Merger and subject to shareholder approval, the Company will change its name as the Company and NPM may agree in the future and change its trading symbol as NPM requests in writing following consultation with Nasdaq. Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, the securities of NPM will be converted into the right to receive an aggregate of approximately 134,349,464 shares of the Company’s common stock (the “Merger Shares”) representing approximately 77.32% of the total issued and outstanding shares of common stock of the Company on a fully converted basis, including, without limitation, giving effect to the conversion of all options, warrants, and any and all other convertible securities. The Merger will involve change of control and may be consummated only following the approval of the Company’s shareholders. The Company filed a Registration Statement on Form S-4 on May 13, 2022, as amended, in connection with the Merger to register the Merger Shares, which registration statement is currently effective. The Company’s shareholders approved the Merger on July 27, 2022.

SAFE Agreement

On February 4, 2022, in connection with the Merger, Second Sight and NPM also entered into a Simple Agreement for Future Equity (“SAFE”) whereby Second Sight would provide to NPM, pending closing of the Merger, an investment advance of $8 million which, effective upon the termination date of the Merger Agreement without completion of the Merger, will result in NPM’s issuing to Second Sight that number of shares of NPM common stock which following that issuance will equal not less than 2.133% of the issued and outstanding shares of NPM common stock assuming exercise or conversion of all outstanding vested and unvested options, warrants, and convertible securities. In the event NPM completes an equity financing at a lower valuation, Second Sight may be eligible to receive additional shares of NPM common stock as set forth in the SAFE. If the Merger is completed, the SAFE will terminate. The SAFE is classified as a marked-to-market asset pursuant to ASC 480, Distinguishing Liabilities from Equity, due to the potential variability at the time of share settlement. The carrying value of the SAFE as of June 30, 2022 was determined to approximate fair value due to proximity to the issuance date and the significant probability of a successful merger.

Product and Clinical Development Plans

Leveraging our 20 years of experience in neuromodulation for vision, we are developing the Orion^® Visual Cortical Prosthesis System (“Orion”), an implanted cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes, including glaucoma, diabetic retinopathy, optic nerve injury or disease and eye injury. Orion is intended to convert images captured by a miniature video camera mounted on glasses into a series of small electrical pulses. The device is designed to bypass diseased or injured eye anatomy and to transmit these electrical pulses wirelessly to an array of electrodes implanted on the surface of the brain’s visual cortex, where it is intended to provide the perception of patterns of light. We are conducting an Early Feasibility Study of the Orion device at the Ronald Reagan UCLA Medical Center in Los Angeles (“UCLA”) and Baylor College of Medicine in Houston (“Baylor”). Regularly scheduled visits at both sites were paused in mid-March 2020 due to the coronavirus outbreak, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36-month results, all of which were measured after the study resumed, indicate to us that:

● We have a good safety profile. Five subjects experienced a total of fourteen adverse events (AEs) related to the device or to the surgery, through February 2022. One was considered a serious adverse event (SAE), and all of the adverse events were in the expected category. The one SAE occurred at about three months post-implant, was resolved quickly, and did not require a hospital stay. There have been no serious adverse events due to the device or surgery since June 2018.

● The efficacy data is encouraging. We measure efficacy by looking at three measures of visual function: The first is square localization, where Orion subjects sit in front of a touch screen and are asked to touch within the boundaries of a square when it appears. The second is direction of motion, where subjects are asked to identify the direction and motion of lines on a screen. The third is grating visual acuity, a measure of visual acuity that is adapted for very low vision. Five subjects have completed these tests at 36-months. For these 36-month results, on square localization, five of five subjects tested in our feasibility study performed significantly better with the system on than off. On direction of motion, five of five performed better with the system on than off. On grating visual acuity, two of five tested had measurable visual acuity on the scale of this test (versus none who can do it with the device off). Another efficacy measurement of day-to-day functionality and benefit is FLORA, an acronym for Functional Low-Vision Observer Rated Assessment. FLORA is an assessment performed by an independent, third-party low vision orientation and mobility specialist who spends time with each of the subjects in their homes. The specialist asks each of the subjects a series of questions and also observes them performing 15 or more daily living tasks, such as finding light sources, following a sidewalk, or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral, or if it is actually hurting the abilities of subjects to perform these tasks. FLORA results to date show that 4 out of 4 completing the FLORA at 36 months had positive or mild positive results indicating the Orion system is providing benefit. We reached agreement with the FDA in the fourth quarter of 2019 to utilize a revised version of FLORA as our primary efficacy endpoint in our pivotal trial for Orion, pending successful validation of the instrument.

No peer-reviewed data is available yet for the Orion system. We are currently negotiating the clinical and regulatory pathway to commercialization with the FDA as part of the Breakthrough Devices Program.

In November 2017, the FDA granted Breakthrough Devices Program designation for the Orion. This designation is given to a few select medical devices in order to provide more effective treatment of life-threatening or irreversibly debilitating diseases or conditions. This program is intended to help patients have more timely access to these medical devices by expediting their development, assessment, and review.

On February 26, 2021, the U.S. Food and Drug Administration (FDA) approved the Argus 2s Retinal Prosthesis System, a redesigned set of external hardware (glasses and video processing unit) initially for use in combination with previously implanted Argus II systems for the treatment of retinitis pigmentosa (RP). The Company expects that the Argus 2s will be adapted to be the external system for the next generation Orion Visual Cortical Prosthesis System currently under development. In addition to ergonomic improvements, the Argus 2s system offers significantly more processing power, potentially allowing for improved video processing.

Our principal offices are located in Los Angeles, California.

In 2007, Second Sight formed Second Sight Medical Products (Switzerland) Sàrl, initially to manage clinical trials and sales and marketing in Europe, the Middle East and Asia-Pacific, and more recently for the research of future technologies. As the laws of Switzerland require at least two corporate stockholders, Second Sight Medical Products (Switzerland) Sàrl is 99.5% owned directly by us and 0.5% owned by an executive of Second Sight as of June 30, 2022. Accordingly, Second Sight Medical Products (Switzerland) Sàrl is considered 100% owned for financial statement purposes and is consolidated with Second Sight for all periods presented. We have closed our foreign operations and expect final dissolution of this entity in 2023.

Market Development Plans

Orion. By further developing our visual cortical prosthesis, Orion, we believe we may be able to significantly expand our market to include nearly all profoundly blind individuals. The only notable exceptions for potential use of the Orion are those who are blind due to otherwise currently treatable diseases, individuals who are born blind, or blindness due to direct damage of the visual cortex, which is rare. However, of the estimated 36 million blind people worldwide, there are approximately 5.8 million people who are legally blind due to causes that are not otherwise treatable. We continue to develop and refine our estimates of the potential addressable market size as we evaluate the commercial prospects for Orion using a combination of published sources, third party market research, and physician feedback. We currently estimate over 500,000 individuals in the US are legally blind due to retinitis pigmentosa, glaucoma, diabetic retinopathy, optic nerve disease and eye injury. Of this population, we estimate the potential US addressable market is between 50,000 and 100,000 individuals with bi-lateral blindness at the light-perception level or worse. Our marketing approvals by the FDA and other regulatory agencies will ultimately determine the subset of these patients who are eligible for the Orion based on our clinical trials and the associated results.

Our objective in designing and developing the Orion visual prosthesis system is to bypass the optic nerve and directly stimulate the part of the brain responsible for human vision. An Early Feasibility Study of the Orion device is currently underway at UCLA and Baylor College of Medicine. Regularly scheduled visits at both sites were placed on hold in mid-March due to Covid-19, however visits at UCLA resumed mid-September 2020 and Baylor resumed in December 2020. Our 36-month results indicate a good safety profile with encouraging efficacy data and benefits in helping subjects perform their daily living tasks. We believe these data are encouraging and support advancement of Orion into a larger pivotal clinical study. Early promising results are not necessarily indicative of results which may be obtained in large clinical trials. No assurance can be given that we will achieve similar results in our larger Orion clinical trials. No peer-reviewed data is available yet for the Orion system.

COVID-19 Pandemic

We are requiring our employees to adhere to the local and state guidelines regarding the COVID-19 pandemic, and use their best judgement to work remotely or work in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available, restricting the ability to do business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.

In addition, our clinical trials have been affected by the COVID-19 outbreak. Patient visits in ongoing clinical trials were paused, for example, due to prioritization of hospital resources toward the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. Also, some of our suppliers of certain materials used in the development of our product candidates are located in areas impacted by COVID-19 which could limit our ability to obtain sufficient materials for our product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets, and may result in an economic downturn that could affect demand for our product candidates, if approved, and impact our operating results. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the continued global economic impact of the pandemic. We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

Liquidity

From inception, our operations have been funded primarily through the sales of our common stock and warrants, as well as from the issuance of convertible debt, research and clinical grants, and limited product revenue generated from the sale of our Argus II product. We have funded our business since 2020 primarily through the following transactions:

● On June 25, 2021, we closed an underwritten public offering of 11,500,000 shares of common stock at a price of $5.00 per share for aggregate net proceeds of $53.3 million

● On March 23, 2021, we closed our private placement to seven institutional investors of 4,650,000 shares of common stock at a price of $6.00 per share for aggregate net proceeds of approximately $24.5 million

We were awarded a $1.6 million grant (with the intent to fund $6.4 million over five years subject to annual review and approval) from the National Institutes of Health (NIH) to fund the “Early Feasibility Clinical Trial of a Visual Cortical Prosthesis” that commenced in January 2018. Our second year grant of $1.4 million was approved on April 6, 2021 and our third year grant of $1.4 million was approved on May 12, 2021 and the fourth year grant of $1.1 million was approved on July 18, 2022.  

Our financial statements have been presented on the basis that our business is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel medical device, including limitations on our operating capital resources. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future.

On March 31, 2020, due to the COVID-19 pandemic and related inability to secure additional funding, we laid off the majority of our employees and reduced our operating expenses significantly to allow for our continuing business operations.  We continue to advance the development of our Orion technology and are exploring various strategic options for this technology.       

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Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements

2. Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and following the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2021, contained in our Annual Report on Form 10-K filed with the SEC on March 29, 2022. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Significant Accounting Policies

Our significant accounting policies are set forth in Note 2 of the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements

We do not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.

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Concentration of Risk

6 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

Concentration of Risk

3. Concentration of Risk

Credit Risk

Financial instruments that subject us to concentrations of credit risk consist primarily of cash and money market funds. We maintain cash and money market funds with financial institutions that we deem reputable.

Foreign Operations

The accompanying condensed consolidated financial statements as of June 30, 2022 and December 31, 2021 include gross assets amounting to $0.1 million and $0.1 million, respectively, relating to operations of our subsidiary based in Switzerland.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The authoritative guidance with respect to fair value establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required.

Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that we have the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives.

Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange based derivatives, mutual funds, and fair-value hedges.

Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

Cash equivalents, which includes money market funds, are the only financial instrument measured and recorded at fair value on our consolidated balance sheet, and they are valued using Level 1 inputs.

Assets measured at fair value on a recurring basis are as follows (in thousands):

	Total		Level 1		Level 2		Level 3
June 30, 2022 (unaudited):
Money market funds	$	56,338	$	56,338	$	—	$	—
December 31, 2021:
Money market funds	$	69,487	$	69,487	$	—	$	—

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Selected Balance Sheet Detail

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Selected Balance Sheet Detail

5. Selected Balance Sheet Detail  

Property and equipment

Property and equipment consisted of the following (in thousands):

	June 30,			December 31,
	2022			2021
Laboratory equipment	$	584		$	584
Computer hardware and software		100			82
		684			666
Accumulated depreciation and amortization		(581	)		(549	)
Property and equipment, net	$	103		$	117

Contract Liabilities

Contract liabilities which are included in accrued expenses consisted of the following (in thousands):

Beginning balance as of December 31, 2021	$	335
Consideration received in advance of revenue recognition		—
Revenue recognized		—
Ending balance as of June 30, 2022	$	335

Product Warranties

A summary of activity of our warranty liabilities, which are included in accrued expenses, for the six month period ended June 30, 2022 is presented below:

Beginning balance as of December 31, 2021	$	50
Additions		—
Settlements		—
Adjustments and other		—
Ending balance as of June 30, 2022	$	50

Right-of-use assets and operating lease liabilities

We lease certain office space and equipment for our use. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease costs are recognized in the income statement over the lease term on a straight-line basis. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. As most of our leases do not provide an implicit rate, we used our estimated incremental borrowing rate of 10% based on the information available at commencement date in determining the present value of lease payments.      

On January 22, 2021, we entered into a lease agreement, effective February 1, 2021, to sub-lease office space to replace our existing headquarters.  We will pay $17,000 per month, increasing to $17,500 per month on February 1, 2022, plus operating expenses, to lease 17,290 square feet of office space at 13170 Telfair Avenue, Sylmar CA 91342.  Additionally, we received full rent abatement for March 2021, and half rent abatement for March 2022. The sub-lease is for two years and two months.  Neither we nor any affiliates are related to, or otherwise have any other relationship with, the other parties, other than the lease.

Assets	Classification	June 30, 2022		December 31, 2021
Non-current assets	Right-of-use assets	$	140	$	228
Liabilities
Current	Current operating lease liabilities	$	151	$	185
Long term	Long term operating lease liabilities	$	—	$	52

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Cash paid for operating lease liabilities	$	49	$	51		92		68

Rent expense, including common area maintenance charges, was $49,000 and $27,000 and $98,000 and $49,000 during the three and six-month periods ended June 30, 2022 and 2021, respectively.

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Equity Securities

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Equity Securities

6. Equity Securities  

Potentially Dilutive Common Stock Equivalents

As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereof to potentially acquire shares of common stock, from our calculations of net loss per share and weighted average common shares outstanding, as their effect would have been anti-dilutive (in thousands).

	June 30,
	2022		2021
Common stock warrants issued to underwriter		10		10
Common stock warrants issued in rights offerings		7,681		7,681
Common stock options		180		182
		7,871		7,873

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Warrants

6 Months Ended

Jun. 30, 2022

Disclosure Warrants Abstract

Warrants

7. Warrants

On February 22, 2019, we completed a registered rights offering to existing stockholders in which we sold approximately 5,976,000 units at $5.792 per unit, which was the adjusted closing price of our common stock on that date. Each Unit consisted of a share of our common stock and a warrant to purchase an additional share of our stock for $11.76. The warrants have a five-year life and trade on Nasdaq under the symbol EYESW.

On March 6, 2017, we completed a registered rights offering to existing stockholders in which we sold approximately 1,706,000 units at $11.76 per unit, which was the adjusted closing price of our common stock on that date. Each unit consisted of a share of our comm11.76 on stock and a warrant to purchase an additional share of our stock for $11.76. The warrants had a five-year life but were extended to expire in February, 2024 to coincide with the February 22, 2019 warrants.

As a component of the funding underwriting fee of our May 5, 2020 public underwriting offer, we granted 375,000 warrants at an exercise price of $1.25 which expire on May 5, 2025. At June 30, 2022, 10,125 of the warrants are still outstanding.

A summary of warrants activity for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares		Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Warrants outstanding as of December 31, 2021		7,691	$	11.75		2.21
Issued		—		—		—
Exercised		—
Forfeited or expired		—
Warrants outstanding as of June 30, 2022		7,691	$	11.75		1.71
Warrants exercisable as of June 30, 2022		7,691	$	11.75		1.71

The warrants outstanding as of June 30, 2022 had $8,000 in intrinsic value.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

A summary of stock option activity under our 2011 Equity Incentive Plan (“2011 Plan”) for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares			Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Options outstanding as of December 31, 2021		182		$	15.68		6.59
Granted		—		$	—
Exercised		—		$	—
Forfeited or expired		(2	)	$	40.00
Options outstanding, vested and expected to vest as of June 30, 2022		180		$	15.47		6.15
Options exercisable as of June 30, 2022		155		$	17.39		5.91

The estimated aggregate intrinsic value of stock options exercisable as of June 30, 2022 was $25,000. As of June 30, 2022, there was $0.1 million of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted average period of 0.75 years.

We adopted an employee stock purchase plan in June 2015 for all eligible employees. At June 30, 2022 the available number of shares that may be issued under the plan is 77,031.

Stock-based compensation expense recognized for stock-based awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	5	$	5	$	10	$	10
Clinical and regulatory		3		9		6		18
General and administrative		5		5		10		10
Total	$	13	$	19	$	26	$	38

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Risk and Uncertainties

6 Months Ended

Jun. 30, 2022

Risk And Uncertainties

Risk and Uncertainties

9. Risk and Uncertainties

COVID-19 has directly and indirectly adversely affected Second Sight and will likely continue to do so for an uncertain period of time. We are asking our employees to adhere to local and state guidelines regarding the COVID-19 pandemic and use their best judgement to work remotely or work in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available, restricting the ability to do business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.

In addition, our clinical trials have been affected by the COVID-19 outbreak. Patient visits in ongoing clinical trials were paused, for example, due to prioritization of hospital resources toward the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. Also, some of our suppliers of certain materials used in the development of our product candidates are located in areas impacted by COVID-19 which could limit our ability to obtain sufficient materials for our product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets and may result in an economic downturn that could affect demand for our product candidates, if approved, and impact our operating results. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the continued global economic impact of the pandemic. We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic on our business, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

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Litigation, Claims and Assessments

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Litigation, Claims and Assessments

10. Litigation, Claims and Assessments

Three oppositions filed by Pixium Vision SA (“Pixium”) are pending in the European Patent Office, each challenging the validity of a European patent owned by us. The outcomes of the challenges are not certain, however, if successful, they may affect our ability to block competitors from utilizing our patented technology. We believe a successful challenge will not have a material effect on our ability to manufacture and sell our products, or otherwise have a material effect on our operations.

As described in the Company’s 10-K for the year ended December 31, 2020, the Company had entered into a Memorandum of Understanding (“MOU”) for a proposed business combination with Pixium. In response to a press release by Pixium dated March 24, 2021, and subsequent communications between us and Pixium, our Board of Directors determined that the business combination with Pixium was not in the best interest of our shareholders. On April 1, 2021, we gave notice to Pixium that we were terminating the MOU between the parties and seeking an amicable resolution of termination amounts that may be due, however no assurance can be given that an amicable resolution will be reached. We accrued $1,000,000 of liquidated damages as contemplated by the MOU in accounts payable as of March 31, 2021 and remitted that amount to Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claims damages of approximately €5.1 million or about $5.2 million at current exchange rates. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000 and thus the Company does not believe any further loss accrual is necessary.

In November 2020, we and Pixium retained Oppenheimer & Co. Inc. as placement agent for a proposed private placement of securities in connection with the Business Combination. On April 1, 2021, we received an invoice from Oppenheimer for more than $1.86 million. This amount includes a requested commission of 6.5% on $27.9 million raised in the private placement. We believe that claims for payment presented by this invoice are without merit.

We are party to litigation arising in the ordinary course of business. It is our opinion that the outcome of such matters will not have a material effect on our results of operations, however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

The 2022 Annual Meeting of Shareholders of Second Sight Medical Products Inc. was held on July 27, 2022. Holders of 27,621,649 shares of Second Sight’s common stock were represented at the meeting in person or by proxy, constituting a quorum. A proposal to approve the transactions contemplated by the Agreement and Plan of Merger, dated February 4, 2022, by and between the Company and Nano Precision Medical, Inc., a California corporation (“NPM”), pursuant to which NPM will merge with and into NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of the Company, with NPM surviving as a wholly-owned subsidiary of the Company was approved.

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Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and following the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2021, contained in our Annual Report on Form 10-K filed with the SEC on March 29, 2022. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Significant Accounting Policies

Significant Accounting Policies

Our significant accounting policies are set forth in Note 2 of the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

We do not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Assets measured at fair value on a recurring basis are as follows (in thousands)

Assets measured at fair value on a recurring basis are as follows (in thousands):

	Total		Level 1		Level 2		Level 3
June 30, 2022 (unaudited):
Money market funds	$	56,338	$	56,338	$	—	$	—
December 31, 2021:
Money market funds	$	69,487	$	69,487	$	—	$	—

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Selected Balance Sheet Detail (Tables)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Property and equipment consisted of the following (in thousands)

Property and equipment consisted of the following (in thousands):

	June 30,			December 31,
	2022			2021
Laboratory equipment	$	584		$	584
Computer hardware and software		100			82
		684			666
Accumulated depreciation and amortization		(581	)		(549	)
Property and equipment, net	$	103		$	117

Contract liabilities which are included in accrued expenses consisted of the following (in thousands)

Contract liabilities which are included in accrued expenses consisted of the following (in thousands):

Beginning balance as of December 31, 2021	$	335
Consideration received in advance of revenue recognition		—
Revenue recognized		—
Ending balance as of June 30, 2022	$	335

A summary of activity of our warranty liabilities, which are included in accrued expenses, for the six month period ended June 30, 2022 is presented below:

A summary of activity of our warranty liabilities, which are included in accrued expenses, for the six month period ended June 30, 2022 is presented below:

Beginning balance as of December 31, 2021	$	50
Additions		—
Settlements		—
Adjustments and other		—
Ending balance as of June 30, 2022	$	50

Schedule of right of use assets and operating lease liabilties

Assets	Classification	June 30, 2022		December 31, 2021
Non-current assets	Right-of-use assets	$	140	$	228
Liabilities
Current	Current operating lease liabilities	$	151	$	185
Long term	Long term operating lease liabilities	$	—	$	52

Schedule of lease liabilities

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
Cash paid for operating lease liabilities	$	49	$	51		92		68

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Equity Securities (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereof to potentially acquire shares of common stock, from our calculations of net loss per share and weighted average common shares outstanding, as their effect would have been anti-dilutive (in thousands)

As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereof to potentially acquire shares of common stock, from our calculations of net loss per share and weighted average common shares outstanding, as their effect would have been anti-dilutive (in thousands).

	June 30,
	2022		2021
Common stock warrants issued to underwriter		10		10
Common stock warrants issued in rights offerings		7,681		7,681
Common stock options		180		182
		7,871		7,873

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Warrants (Tables)

6 Months Ended

Jun. 30, 2022

Disclosure Warrants Abstract

A summary of warrants activity for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data

A summary of warrants activity for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares		Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Warrants outstanding as of December 31, 2021		7,691	$	11.75		2.21
Issued		—		—		—
Exercised		—
Forfeited or expired		—
Warrants outstanding as of June 30, 2022		7,691	$	11.75		1.71
Warrants exercisable as of June 30, 2022		7,691	$	11.75		1.71

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

A summary of stock option activity under our 2011 Equity Incentive Plan (“2011 Plan”) for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data

A summary of stock option activity under our 2011 Equity Incentive Plan (“2011 Plan”) for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data).

	Number of  Shares			Weighted  Average  Exercise  Price  Per Share		Weighted  Average  Remaining  Contractual  Life (in Years)
Options outstanding as of December 31, 2021		182		$	15.68		6.59
Granted		—		$	—
Exercised		—		$	—
Forfeited or expired		(2	)	$	40.00
Options outstanding, vested and expected to vest as of June 30, 2022		180		$	15.47		6.15
Options exercisable as of June 30, 2022		155		$	17.39		5.91

Stock-based compensation expense recognized for stock-based awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

Stock-based compensation expense recognized for stock-based awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	5	$	5	$	10	$	10
Clinical and regulatory		3		9		6		18
General and administrative		5		5		10		10
Total	$	13	$	19	$	26	$	38

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Organization and Business Operations (Details Narrative) - USD ($)				3 Months Ended		6 Months Ended
	Jun. 25, 2021	May 12, 2021	Mar. 23, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 08, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net sales
Chairman of Board of Directors [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Other Borrowings								$ 6,400,000
Unaffiliated Shareholders [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Other Borrowings								$ 1,400,000
National institites of health member | Grant [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Net sales						$ 1,600,000
Grant received funding		$ 1,400,000
Second sight switzerland sarl
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Share price (in dollars per share)				77.32%		77.32%
Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares issued upon right offering	11,500,000		4,650,000			134,349,464
Share price (in dollars per share)	$ 5.00		$ 6.00
Proceeds from issuance or sale of equity, total	$ 53,200,000		$ 24,500,000

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Concentration of Risk (Details Narrative) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Assets	$ 65,649,000	$ 70,879,000
Eyes Second Sight Switzerland Sarl [Member]
Assets	$ 100,000	$ 100,000

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Assets measured at fair value on a recurring basis are as follows (in thousands) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 56,338	$ 69,487
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	56,338	69,487
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds

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Property and equipment consisted of the following (in thousands) (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 684	$ 666
Accumulated depreciation and amortization	(581)	(549)
Property and equipment, net	103	117
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	584	584
Computer Hardware and Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 100	$ 82

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Contract liabilities which are included in accrued expenses consisted of the following (in thousands) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Contract liabilities beginning	$ 335
Revenue recognized
Contract liabilities ending	$ 335

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A summary of activity of our warranty liabilities, which are included in accrued expenses, for the six month period ended June 30, 2022 is presented below: (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Beginning balance	$ 50
Additions
Settlements
Adjustments and other
Ending balance	$ 50

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Schedule of right of use assets and operating lease liabilties (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Right-of-use assets	$ 140	$ 228
Current operating lease liabilities	151	185
Long term operating lease liabilities		$ 52

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Schedule of lease liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash paid for operating lease liabilities	$ 49	$ 51	$ 92	$ 68

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Selected Balance Sheet Detail (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
	Jan. 22, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Lessee, Lease, Description [Line Items]
Estimated incremental borrowing rate				10.00%
Non-cash lease expense				$ 2,000	$ 13,000
Rent expense manintenance charges		$ 49,000	$ 27,000	$ 98,000	$ 49,000
Lessor [Member]
Lessee, Lease, Description [Line Items]
Termination date of the lease	Feb. 01, 2021
Non-cash lease expense	$ 17,000
Early lease termination fee	$ 17,500

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As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereof to potentially acquire shares of common stock, from our calculations of net loss per share and weighted average common shares (Details) - shares	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	7,871	7,873
Warrants Issued to UnderwriterIn Connection with May 2020 Offering [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	10	10
Warrants Issued in Connection with March 2017 Rights Offering [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	7,681	7,681
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities (in shares)	180	182

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A summary of warrants activity for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Class of Warrant or Right [Line Items]
Issued
Exercised
Forfeited or expired
Warrant [Member]
Class of Warrant or Right [Line Items]
Outstanding at Beginning	7,691
Outstanding at Beginning | $ / shares	$ 11.75
Class of Warrant or Right Weighted Average Remaining Contractual Life of Warrants or Rights1	2 years 2 months 16 days
Issued | $ / shares	$ 0
Outstanding at Ending	7,691
Outstanding at Ending | $ / shares	$ 11.75
Outstanding at Ending	1 year 8 months 16 days
Exercisable at ending	7,691
Exercisable at ending | $ / shares	$ 11.75
Outstanding at Ending	1 year 8 months 16 days

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Warrants (Details Narrative) - USD ($)					6 Months Ended
	May 05, 2020	May 05, 2020	Feb. 22, 2019	Mar. 06, 2017	Jun. 30, 2022	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Class of warrent or right issued during period		375,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1.25	$ 1.25
Warrants expiration date	May 05, 2025
Class of Warrant or Right, Outstanding	10,125	10,125
Warrant [Member]
Subsidiary, Sale of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares					$ 11.75	$ 11.75
Class of Warrant or Right, Outstanding					7,691	7,691
Intrinsic value					$ 8,000
Right Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares issued upon right offering			5,976,000	1,706,000
Share price (in dollars per share) | $ / shares			$ 5.792	$ 11.76
Share Price			$ 11.76	$ 11.76
Term of warrants				5 years

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A summary of stock option activity under our 2011 Equity Incentive Plan (“2011 Plan”) for the six months ended June 30, 2022 is presented below (in thousands, except per share and contractual life data (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Forfeited or expired, weighted average exercise price (in dollars per share) | $ / shares	$ 40.00
Exercised | shares	0
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 0
Options outstanding, vested and expected to vest (in shares) | shares	180
Options outstanding, vested and expected to vest (in per shares) | $ / shares	$ 15.47
Options exercisable, number of shares (in shares) | shares	155
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 17.39
Share-Based Payment Arrangement, Option [Member] | The2011 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options outstanding, number of shares (in shares) | shares	182,000
Forfeited or expired, weighted average exercise price (in dollars per share) | $ / shares	$ 15.68
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6 years 7 months 2 days
Granted | shares
Granted, weighted average exercise price (in dollars per share) | $ / shares
Forfeited or expired, number of shares (in shares) | shares	(2,000)
Options outstanding, vested and expected to vest	6 years 1 month 24 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	5 years 10 months 28 days

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Stock-based compensation expense recognized for stock-based awards in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands): (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Research and development	$ 13	$ 19	$ 26	$ 38
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Research and development	5	5	10	10
Clinical and Regulatory [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Research and development	3	9	6	18
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Research and development	$ 5	$ 5	$ 10	$ 10

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Stock-Based Compensation (Details Narrative)	6 Months Ended
	Jun. 30, 2022 USD ($) shares
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value	$ 25,000
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 100,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	9 months
Number of shares that may be issued | shares	77,031

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Litigation, Claims and Assessments (Details Narrative) - USD ($)			6 Months Ended
	May 19, 2021	Apr. 02, 2021	Jun. 30, 2022	Jun. 30, 2021
Defined Benefit Plan Disclosure [Line Items]
Liquidated damage				$ 1,000,000
Description of contract termination and claims			Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claims damages of approximately €5.1 million or about $5.2 million at current exchange rates. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000 and thus the Company does not believe any further loss accrual is necessary.
Loss contingency, damages paid, value			$ 1,000,000
Demanded damages, value	$ 5,200,000
Oppenheimer and co inc member
Defined Benefit Plan Disclosure [Line Items]
Invoice amount, receivable		$ 1,860,000
Percentage		6.50%
Private placement, amount raised		$ 27,900,000

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Subsequent Events (Details Narrative) - shares	Jul. 27, 2022	May 05, 2020
Subsequent Event [Line Items]
Number of shares		10,125
Common Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of shares	27,621,649