Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 04, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | SECOND SIGHT MEDICAL PRODUCTS INC | |
Entity Central Index Key | 1,266,806 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,037,309 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 459 | $ 239 |
Money market funds | 9,786 | 15,721 |
Accounts receivable | 822 | 1,501 |
Inventories, net | 9,081 | 8,209 |
Prepaid expenses and other current assets | 932 | 1,094 |
Total current assets | 21,080 | 26,764 |
Property and equipment, net | 1,429 | 1,432 |
Deposits and other assets | 50 | 49 |
Total assets | 22,559 | 28,245 |
Current liabilities: | ||
Accounts payable | 707 | 710 |
Accrued expenses | 1,664 | 2,068 |
Accrued compensation expense | 1,696 | 2,069 |
Accrued clinical trial expenses | 601 | 616 |
Deferred revenue | 325 | 322 |
Deferred grant revenue | 1,630 | 2,197 |
Total current liabilities | $ 6,623 | $ 7,982 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, no par value, 10,000 shares authorized; none outstanding | ||
Common stock, no par value; 200,000 shares authorized; shares issued and outstanding: 36,019 and 35,942 at March 31, 2016 and December 31, 2015, respectively | $ 166,435 | $ 166,049 |
Common stock to be issued | 280 | 205 |
Additional paid-in capital | 28,250 | 27,277 |
Notes receivable to finance stock option exercises | (3) | (5) |
Accumulated other comprehensive loss | (528) | (581) |
Accumulated deficit | (178,498) | (172,682) |
Total stockholders' equity | 15,936 | 20,263 |
Total liabilities and stockholders' equity | $ 22,559 | $ 28,245 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | ||
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 36,019 | 35,942 |
Common stock, shares outstanding | 36,019 | 35,942 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 1,053 | $ 1,700 |
Cost of sales | 912 | 1,296 |
Gross profit | 141 | 404 |
Operating expenses: | ||
Research and development, net of grants | 762 | 1,048 |
Clinical and regulatory | 778 | 666 |
Selling and marketing | 2,012 | 1,995 |
General and administrative | 2,410 | 1,656 |
Total operating expenses | 5,962 | 5,365 |
Loss from operations | (5,821) | (4,961) |
Interest income | $ 5 | 1 |
Other income, net | 4 | |
Net loss | $ (5,816) | $ (4,956) |
Net loss per common share - basic and diluted | $ (0.16) | $ (0.14) |
Weighted average common shares outstanding - basic and diluted | 35,971 | 35,301 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (5,816) | $ (4,956) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 53 | (59) |
Comprehensive loss | $ (5,763) | $ (5,015) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (5,816) | $ (4,956) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of property and equipment | 99 | 82 |
Stock-based compensation | 946 | 497 |
Common stock issuable for services | 75 | 71 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 667 | (588) |
Inventories | (816) | (679) |
Prepaid expenses and other assets | 196 | (4) |
Accounts payable | (3) | (98) |
Accrued expenses | (427) | 199 |
Accrued compensation expenses | (374) | 261 |
Accrued clinical trial expenses | (15) | (2) |
Deferred revenue | (4) | 205 |
Deferred grant revenue | (567) | (18) |
Net cash used in operating activities | (6,039) | (5,030) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (96) | (79) |
Proceeds from money market funds | 5,941 | 4,913 |
Net cash provided by investing activities | 5,845 | 4,834 |
Cash flows from financing activities: | ||
Proceeds from exercise of options and warrants | $ 387 | 412 |
Payment of employment taxes related to stock option exercises | (124) | |
Net cash provided by financing activities | $ 387 | 288 |
Effect of exchange rate changes on cash | 27 | (59) |
Cash: | ||
Net increase | 220 | 33 |
Balance at beginning of period | 239 | 619 |
Balance at end of period | $ 459 | $ 652 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | 1. Organization and Business Operations Organization and Business Operations Second Sight Medical Products, Inc. (Second Sight or the Company), formerly Second Sight LLC, was founded in 1998 as a limited liability company and was subsequently incorporated in the State of California in 2003. Second Sight develops, manufactures and markets implantable prosthetic devices that can restore some functional vision to patients blinded by outer retinal degenerations, such as Retinitis Pigmentosa. In 2007, Second Sight formed Second Sight (Switzerland) Sarl, initially to manage clinical trials for its products in Europe, and later to manage sales and marketing in Europe and the Middle East. As the laws of Switzerland require at least two corporate stockholders, Second Sight (Switzerland) Sarl is 99.5% owned directly by the Company and 0.5% owned by an executive of Second Sight, who is acting as a nominee of the Company. Accordingly, Second Sight (Switzerland) Sarl is considered 100% owned for financial statement purposes and is consolidated with Second Sight for all periods presented. Since its inception, the Company has generated limited revenues from the sale of products and has financed its operations primarily through the issuance of common stock, convertible debt (which has been converted into common stock), and grants primarily from government agencies. The Companys financial statements have been presented on the basis that its business is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to the risks and uncertainties associated with a business with one product line and limited commercial product revenues, including limitations on the Companys operating capital resources and uncertain demand for its products. The Company has incurred recurring operating losses and negative operating cash flows since inception, and it expects to continue to incur operating losses and negative operating cash flows for at least the next few years. As a result, management has concluded that there is substantial doubt about the Companys ability to continue as a going concern, and the Companys independent registered public accounting firm, in its report on the Companys 2015 consolidated financial statements, has raised substantial doubt about the Companys ability to continue as a going concern. The Company plans to complete a rights offering to shareholders in the near future pending regulatory approvals and anticipates that it may be able to raise funds that will support operations through 2017. If the rights offering is fully subscribed the Company may be able to obtain gross proceeds of up to $19.8 million. However, no assurance can be given that this rights offering will yield proceeds that are adequate for the Company needs. If the Company does not obtain adequate proceeds from its rights offering to shareholders there can be no assurances the Company will be able to raise funds through other means so as to be able to continue to operate its business beyond the third quarter of fiscal 2016. |
Basis of Presentation, Signific
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
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 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Companys audited consolidated financial statements. In the opinion of management, these financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. Significant Accounting Policies The Companys significant accounting policies are set forth in Note 2 in its Annual Report on Form 10-K for the year ended December 31, 2015. Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), |
Concentration of Risk
Concentration of Risk | 3 Months Ended |
Mar. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | 3. Concentration of Risk Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, money market funds, and trade accounts receivable. The Company maintains cash and money market funds with financial institutions that management deems reputable, and at times, cash balances may be in excess of Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits. The Company extends differing levels of credit to customers, and typically does not require collateral. The Company also maintains a cash balance at a bank in Switzerland, which is insured up to an amount specified by the deposit insurance agency of Switzerland. Customer Concentration During the three months ended March 31, 2016 and 2015 (unaudited), the following customers comprised more than 10% of revenues : March31, March 31, 2016 2015 Customer 1 24 % 23 % Customer 2 23 % 3 % Customer 3 15 % 0 % Customer 4 14 % 0 % Customer 5 10 % 0 % Customer 6 0 % 15 % Customer 7 0 % 14 % Customer 8 0 % 10 % As of March 31, 2016 and December 31, 2015, the following customers comprised more than 10% of accounts receivable: March 31, December31, 2016 2015 (unaudited) Customer 1 30 % 17 % Customer 2 18 % 10 % Customer 3 18 % 10 % Customer 4 18 % 2 % Customer 5 10 % 3 % Customer 6 0 % 19 % Customer 7 0 % 10 % Geographic Concentration During the three months ended March 31, 2016 and 2015 (unaudited), regional revenue, based on customer location, consisted of the following: March 31, March 31, 2016 2015 United States 33 % 18 % Italy 24 % 36 % Turkey 15 % 0 % Canada 11 % 7 % France 8 % 30 % Sources of Supply Several of the components, materials and services used in the Companys current Argus II product are available from only one supplier, and substitutes for these items cannot be obtained easily or would require substantial design or manufacturing modifications. Any significant problem experienced by one of the Companys sole source suppliers could result in a delay or interruption in the supply of components to the Company until that supplier cures the problem or an alternative source of the component is located and qualified. Even where the Company could qualify alternative suppliers, the substitution of suppliers may be at a higher cost and create time delays that impede the commercial production of the Argus II, reduce gross profit margins and impact the Companys abilities to deliver its products as may be timely required to meet demand. Foreign Operations The accompanying condensed consolidated financial statements as of March 31, 2016 (unaudited) and December 31, 2015 include assets amounting $2,752,000 and $3,041,000, respectively, relating to operations of the company in Switzerland. It is possible that unanticipated events in foreign countries could disrupt the Companys operations. |
Money Market Funds
Money Market Funds | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Money Market Funds | 4. Money Market Funds 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 the Company has 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. Money market funds are the only financial instrument measured and recorded at fair value on the Companys balance sheet, and they are considered Level 1 valuation securities. The following table presents money market funds at their level within the fair value hierarchy at March 31, 2016 and December 31, 2015 (in thousands) Total Level 1 Level 2 Level 3 March 31, 2016 (unaudited): Money market funds $ 9,786 $ 9,786 $ $ December 31, 2015: Money market funds $ 15,721 $ 15,721 $ $ |
Selected Balance Sheet Detail
Selected Balance Sheet Detail | 3 Months Ended |
Mar. 31, 2016 | |
Selected Balance Sheet Detail | |
Selected Balance Sheet Detail | 5. Selected Balance Sheet Detail Inventories, net Inventories consisted of the following at (in thousands): March 31, December 31, 2016 2015 (unaudited) Raw materials $ 529 $ 575 Work in process 5,824 5,028 Finished goods 3,239 3,156 9,592 8,759 Allowance for excess and obsolescence (511 ) (550 ) Inventories, net $ 9,081 $ 8,209 Property and equipment, net of accumulated depreciation and amortization Property and equipment consisted of the following at (in thousands): March 31, December 31, 2016 2015 (unaudited) Laboratory equipment $ 3,440 $ 3,369 Computer hardware and software 1,985 1,960 Leasehold improvements 508 508 Furniture, fixtures and equipment 135 135 6,068 5,972 Accumulated depreciation and amortization (4,639 ) (4,540 ) Property and equipment, net $ 1,429 $ 1,432 |
Long Term Investor Right
Long Term Investor Right | 3 Months Ended |
Mar. 31, 2016 | |
Contractors [Abstract] | |
Long Term Investor Right | 6. Long Term Investor Right Investors who purchased shares in the Companys IPO, and who complied with certain terms and conditions, such as holding their IPO shares in their name during the twenty-four month period following the closing of the IPO, are entitled under certain conditions to receive up to one additional share for each share they purchased in the IPO. For a more complete discussion of the Long Term Investor Right, see Note 2 in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. As of March 31, 2016, the Company identified investors who had perfected and maintained Long Term Investor Rights in 1,203,677 shares of common stock that were acquired as part of the Companys IPO. The highest average closing price for the Companys common stock on NASDAQ during any consecutive 90 day period ended on or before March 31, 2016 was $13.96. Based on this average closing stock price, an investor who purchased shares as part of the IPO, and who has perfected its Long Term Investor Right, would be entitled to 0.2894 shares for each share purchased in the IPO, rounded up to the next whole share, which represents an aggregate maximum of 348,385 shares that are potentially issuable by the Company pursuant to the Long Term Investor Right at such date. The actual number of common shares issuable pursuant to the Long Term Investor Right is dependent on the future stock price of the Company over the two year period subsequent to the November 24, 2014 closing date of the IPO, and could be as high as 348,385 shares and as low as zero shares. The Long Term Investor Right is an equity instrument that will be accounted for as a component of the actual price per common share paid by the investor in the IPO. For basic earnings per share, the common shares associated with the Long Term Investor Right are treated as contingently issuable shares and are not being included in basic earnings per share until the actual number of shares can be calculated and the shares have been issued. |
Equity Securities
Equity Securities | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Equity Securities | 7. Equity Securities Common Stock Issuable Beginning with services rendered in 2014, and with the first payment in June 2015, non-employee members of the Board of Directors are paid for their services in common stock on June 1 of each year based on the average closing prices for the immediately preceding twenty trading days. As of March, 31, 2016, the Company accrued $280,000 for these services, which equates to 56,054 shares. These shares have not yet been issued and are excluded from the calculation of weighted average common shares outstanding for EPS purposes. Potentially Dilutive Common Stock Equivalents At March 31, 2016 and 2015 (unaudited), the Company excluded the outstanding securities summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculations of earnings per share and weighted average shares outstanding, as their effect would have been anti-dilutive (in thousands). March 31, March 31, 2016 2015 Long Term Investor Rights 348 813 Underwriters warrants 802 805 Warrants associated with convertible debt 1,038 1,100 Common stock options 3,675 3,228 Restricted stock units 190 Employee stock purchase plan 96 Total 6,149 5,946 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 8. Warrants A summary of warrant activity for the three months ended March 31, 2016 (unaudited) is presented below (in thousands, except per share data). Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Warrants outstanding at December 31, 2015 1,840 $ 7.72 2.80 Granted Exercised Forfeited or expired Warrants outstanding at March 31, 2016 1,840 $ 7.72 2.55 Warrants exercisable at March 31, 2016 1,840 $ 7.72 2.55 The intrinsic value of warrants outstanding at March 31, 2016 was $0. During the three months ended March 31, 2016, no warrants were exercised. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Under the 2003 Plan, as restated in June 2011, the Company was authorized to issue options covering up to 3,500,000 common stock shares. Effective June 1, 2011, the Company adopted the 2011 Equity Incentive Plan (the 2011 Plan). The maximum number of shares with respect to which options may be granted under the 2011 Plan is 6,000,000 shares, which is offset and reduced by options previously granted under the 2003 Plan. The option price is determined by the Board of Directors but cannot be less than the fair value of the shares at the grant date. Generally, the options vest ratably over either four or five years and expire ten years from the grant date. Both plans provide for accelerated vesting if there is a change of control, as defined in the plans. A summary of stock option activity for the three months ended March 31, 2016 (unaudited) is presented below (in thousands, except per share data). Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Options outstanding at December 31, 2015 3,472 $ 8.01 6.39 Granted 355 $ 4.20 Exercised (77 ) $ 5.00 Forfeited or expired (75 ) $ 8.70 Options outstanding at March 31, 2016 3,675 $ 7.69 6.71 Options exercisable at March 31, 2016 1,573 $ 5.57 3.73 The estimated aggregate intrinsic value of stock options exercisable at March 31, 2016 was approximately $100,000. As of March 31, 2016, there was $8.7 million of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted average period of 3.09 years. On January 1, 2015, the Companys current Chairman, who at the time was the Chief Executive Officer exercised stock options on a cashless basis to purchase 59,063 shares of common stock at an exercise price of $4.75 per share. Based on the closing market price of the Companys common stock of $10.26 on December 31, 2014, the Chief Executive Officer tendered 27,344 shares of common stock that he owned to satisfy the aggregate exercise price and surrendered 12,055 shares of common stock to satisfy the related $123,684 income and payroll tax withholding amounts related to the transaction. During the three months ended March 31, 2016, the Company granted stock options to purchase 324,973 shares of common stock to certain employees. The options are exercisable for a period of ten years from the date of grant at prices ranging from $4.10 to $4.18 per share, which was the fair value of the Companys common stock on the respective grant dates. The options vest over a period of four years. The fair value of these options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $645,000 ($1.98 to $2.03 per share). Assumptions used in the model were an expected term of 6.25 years, volatility of 48.2%, a risk-free interest rate of 1.77% to 1.87%, and an expected dividend rate of 0%. During the three months ended March 31, 2016, the Company granted stock options to purchase 30,000 shares of common stock to an outside attorney in connection with his services relating to the Companys rights offering to shareholders. The options are exercisable for a period of four years from the date of grant at a price of $5.23 per share, which was 125% of the fair value of the Companys common stock on the grant date of January 14, 2016. As of March 31, 2016, 15,000 of the options have vested. The fair value of these options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $53,000 ($1.77 per share). Assumptions used in the model were an expected term of 6.25 years, volatility of 48.2%, a risk-free interest rate of 1.87%, and an expected dividend rate of 0%. The cost of these shares is treated as an issuance cost of the offering and will be deducted from the gross proceeds from the offering. During the three months ended March 31, 2016, the Company recorded a charge of $55,000 to extend the exercise period of 98,681 vested options for one employee who resigned and became a consultant for the Company. All unvested options for this employee were terminated when this employee ceased full-time employment with the Company. On April 4, 2016, the Board of Directors approved, subject to shareholder approval, amendments to Second Sight 2011 Equity Incentive Plan that will (i) increase the maximum number of shares of common stock that may be issued under the Plan from 6.0 million shares to 7.5 million shares, (ii) allow issuance of Restricted Stock Units, and (iii) permit repricing and exchanges of options at the discretion of the Board of Directors. The Company adopted an employee stock purchase plan in June, 2015 for all eligible employees. Under the plan, shares of the Company's common stock may be purchased at six-month intervals at 85% of the lower of the closing fair market value of the common stock (i) on the first trading day of the offering period or (ii) on the last trading day of the purchase period. An employee may purchase in any one calendar year shares of common stock having an aggregate fair market value of up to $25,000 determined as of the first trading day of the offering period. Additionally, a participating employee may not purchase more than 100,000 shares of common stock in any one offering period. At March 31, 2016, 52,469 shares had been issued under the plan. The following table summarizes Restricted Stock Unit (RSU) activity for the three months ended March 31, 2016 (in thousands, except per share data): Number Weighted Outstanding as of December 31, 2015 190 $ 12.43 Awarded - - Vested - - Forfeited/canceled - - Outstanding as of March 31, 2016 190 $ 12.43 As of March 31, 2016, there was $1,995,000 of total unrecognized compensation cost related to the outstanding RSUs that will be recognized over a weighted average period of 3.38 years. The total stock-based compensation recognized for stock-based awards granted under the 2003 Plan and the 2011 Plan in the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (unaudited) is as follows (in thousands): March 31, March 31, 2016 2015 Cost of sales $ 78 $ 99 Research and development 77 80 Clinical and regulatory 48 70 Selling and marketing 108 89 General and administrative 635 159 Total $ 946 $ 497 |
Litigation, Claims and Assessme
Litigation, Claims and Assessments | 3 Months Ended |
Mar. 31, 2016 | |
Litigation Settlement [Abstract] | |
Litigation, Claims and Assessments | 10. Litigation, Claims and Assessments Fourteen oppositions have been filed by a third-party in the European Patent Office, each challenging the validity of a European patent owned or exclusively licensed by the Company. The outcome of the challenges is not certain, however, if successful, they may affect the Company's ability to block competitors from utilizing some of its patented technology in Europe. Management of the Company does not believe a successful challenge will have a material effect on its ability to manufacture and sell its products, or otherwise have a material effect on its operations. The Company is party to litigation arising in the ordinary course of business. It is management's opinion that the outcome of such matters will not have a material effect on the Company's financial statements. |
Basis of Presentation, Signif17
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Companys audited consolidated financial statements. In the opinion of management, these financial statements reflect all normal recurring and other adjustments necessary for a fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods. |
Significant Accounting Policies | Significant Accounting Policies The Companys significant accounting policies are set forth in Note 2 in its Annual Report on Form 10-K for the year ended December 31, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), |
Concentration of Risk (Tables)
Concentration of Risk (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Summary of customer concentration of risk in revenue | During the three months ended March 31, 2016 and 2015 (unaudited), the following customers comprised more than 10% of revenues : March31, March 31, 2016 2015 Customer 1 24 % 23 % Customer 2 23 % 3 % Customer 3 15 % 0 % Customer 4 14 % 0 % Customer 5 10 % 0 % Customer 6 0 % 15 % Customer 7 0 % 14 % Customer 8 0 % 10 % |
Summary of customer concentration of risk in accounts receivable | As of March 31, 2016 and December 31, 2015, the following customers comprised more than 10% of accounts receivable: March 31, December31, 2016 2015 (unaudited) Customer 1 30 % 17 % Customer 2 18 % 10 % Customer 3 18 % 10 % Customer 4 18 % 2 % Customer 5 10 % 3 % Customer 6 0 % 19 % Customer 7 0 % 10 % |
Summary of geographic concentration of risk in revenue | During the three months ended March 31, 2016 and 2015 (unaudited), regional revenue, based on customer location, consisted of the following: March 31, March 31, 2016 2015 United States 33 % 18 % Italy 24 % 36 % Turkey 15 % 0 % Canada 11 % 7 % France 8 % 30 % |
Money Market Funds (Tables)
Money Market Funds (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of money market fund | The following table presents money market funds at their level within the fair value hierarchy at March 31, 2016 and December 31, 2015 (in thousands) Total Level 1 Level 2 Level 3 March 31, 2016 (unaudited): Money market funds $ 9,786 $ 9,786 $ $ December 31, 2015: Money market funds $ 15,721 $ 15,721 $ $ |
Selected Balance Sheet Detail (
Selected Balance Sheet Detail (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Selected Balance Sheet Detail | |
Summary of inventory | Inventories consisted of the following at (in thousands): March 31, December 31, 2016 2015 (unaudited) Raw materials $ 529 $ 575 Work in process 5,824 5,028 Finished goods 3,239 3,156 9,592 8,759 Allowance for excess and obsolescence (511 ) (550 ) Inventories, net $ 9,081 $ 8,209 |
Summary of property and equipment | Property and equipment consisted of the following at (in thousands): March 31, December 31, 2016 2015 (unaudited) Laboratory equipment $ 3,440 $ 3,369 Computer hardware and software 1,985 1,960 Leasehold improvements 508 508 Furniture, fixtures and equipment 135 135 6,068 5,972 Accumulated depreciation and amortization (4,639 ) (4,540 ) Property and equipment, net $ 1,429 $ 1,432 |
Equity Securities (Tables)
Equity Securities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of potentially dilutive securities | At March 31, 2016 and 2015 (unaudited), the Company excluded the outstanding securities summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculations of earnings per share and weighted average shares outstanding, as their effect would have been anti-dilutive (in thousands). March 31, March 31, 2016 2015 Long Term Investor Rights 348 813 Underwriters warrants 802 805 Warrants associated with convertible debt 1,038 1,100 Common stock options 3,675 3,228 Restricted stock units 190 Employee stock purchase plan 96 Total 6,149 5,946 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of warrant activity | A summary of warrant activity for the three months ended March 31, 2016 (unaudited) is presented below (in thousands, except per share data). Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Warrants outstanding at December 31, 2015 1,840 $ 7.72 2.80 Granted Exercised Forfeited or expired Warrants outstanding at March 31, 2016 1,840 $ 7.72 2.55 Warrants exercisable at March 31, 2016 1,840 $ 7.72 2.55 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | A summary of stock option activity for the three months ended March 31, 2016 (unaudited) is presented below (in thousands, except per share data). Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Options outstanding at December 31, 2015 3,472 $ 8.01 6.39 Granted 355 $ 4.20 Exercised (77 ) $ 5.00 Forfeited or expired (75 ) $ 8.70 Options outstanding at March 31, 2016 3,675 $ 7.69 6.71 Options exercisable at March 31, 2016 1,573 $ 5.57 3.73 |
Summarizes Restricted Stock | The following table summarizes Restricted Stock Unit (RSU) activity for the three months ended March 31, 2016 (in thousands, except per share data): Number Weighted Outstanding as of December 31, 2015 190 $ 12.43 Awarded - - Vested - - Forfeited/canceled - - Outstanding as of March 31, 2016 190 $ 12.43 |
Summary of stock-based compensation | The total stock-based compensation recognized for stock-based awards granted under the 2003 Plan and the 2011 Plan in the condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015 (unaudited) is as follows (in thousands): March 31, March 31, 2016 2015 Cost of sales $ 78 $ 99 Research and development 77 80 Clinical and regulatory 48 70 Selling and marketing 108 89 General and administrative 635 159 Total $ 946 $ 497 |
Organization and Business Ope24
Organization and Business Operations (Details Narrative) | Mar. 31, 2016 |
Ownership by the Company | 99.50% |
Executive [Member] | |
Ownership by the Company | 0.50% |
Concentration of Risk (Details)
Concentration of Risk (Details) - Sales Revenue, Net [Member] | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Customer 1 [Member] | ||
Percentage | 24.00% | 23.00% |
Customer 2 [Member] | ||
Percentage | 23.00% | 3.00% |
Customer 3 [Member] | ||
Percentage | 15.00% | 0.00% |
Customer 4 [Member] | ||
Percentage | 14.00% | 0.00% |
Customer 5 [Member] | ||
Percentage | 10.00% | 0.00% |
Customer 6 [Member] | ||
Percentage | 0.00% | 15.00% |
Customer 7 [Member] | ||
Percentage | 0.00% | 14.00% |
Customer 8 [Member] | ||
Percentage | 0.00% | 10.00% |
Concentration of Risk (Details
Concentration of Risk (Details 1) - Accounts Receivable [Member] | Mar. 31, 2016 | Dec. 31, 2015 |
Customer 1 [Member] | ||
Percentage | 30.00% | 17.00% |
Customer 2 [Member] | ||
Percentage | 18.00% | 10.00% |
Customer 3 [Member] | ||
Percentage | 18.00% | 10.00% |
Customer 4 [Member] | ||
Percentage | 18.00% | 2.00% |
Customer 5 [Member] | ||
Percentage | 10.00% | 3.00% |
Customer 6 [Member] | ||
Percentage | 0.00% | 19.00% |
Customer 7 [Member] | ||
Percentage | 0.00% | 10.00% |
Concentration of Risk (Detail27
Concentration of Risk (Details 2) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
United States [Member] | ||
Regional revenue by customer location | 33.00% | 18.00% |
Italy [Member] | ||
Regional revenue by customer location | 24.00% | 36.00% |
Turkey [Member] | ||
Regional revenue by customer location | 15.00% | 0.00% |
Canada [Member] | ||
Regional revenue by customer location | 11.00% | 7.00% |
France [Member] | ||
Regional revenue by customer location | 8.00% | 30.00% |
Concentration of Risk (Detail28
Concentration of Risk (Details Narrative) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | $ 22,559 | $ 28,245 |
Switzerland [Member] | ||
Assets | $ 2,752,000 | $ 3,041,000 |
Money Market Funds (Details)
Money Market Funds (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Money market funds | $ 9,786 | $ 15,721 |
Level 1 [Member] | ||
Money market funds | $ 9,786 | $ 15,721 |
Level 2 [Member] | ||
Money market funds | ||
Level 3 [Member] | ||
Money market funds |
Selected Balance Sheet Detail30
Selected Balance Sheet Detail (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Selected Balance Sheet Detail | ||
Raw materials | $ 529 | $ 575 |
Work in process | 5,824 | 5,028 |
Finished goods | 3,239 | 3,156 |
Inventory, Gross | 9,592 | 8,759 |
Allowance for excess and obsolescence | (511) | (550) |
Inventories, net | $ 9,081 | $ 8,209 |
Selected Balance Sheet Detail31
Selected Balance Sheet Detail (Detail 1) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Property and equipment, Gross | $ 6,068 | $ 5,972 |
Accumulated depreciation and amortization | (4,639) | (4,540) |
Property and equipment, net | 1,429 | 1,432 |
Laboratory equipment [Member] | ||
Property and equipment, Gross | 3,440 | 3,369 |
Computer hardware and software [Member] | ||
Property and equipment, Gross | 1,985 | 1,960 |
Leasehold Improvements [Member] | ||
Property and equipment, Gross | 508 | 508 |
Furniture, fixtures and equipment [Member] | ||
Property and equipment, Gross | $ 135 | $ 135 |
Long Term Investor Right (Detai
Long Term Investor Right (Details Narrative) | Mar. 31, 2016$ / sharesshares |
Contractors [Abstract] | |
Shares of common stock acquired perfected and maintained by investors since IPO | 1,203,677 |
Highest average closing price on NASDAQ during any consecutive 90 day | $ / shares | $ 13.96 |
Actual number of common shares issuable pursuant to Long Term Investor Right, maximum | 348,385 |
Actual number of common shares issuable pursuant to Long Term Investor Right, minimum | 0 |
Equity Securities (Details)
Equity Securities (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Total | 6,149 | 5,946 |
Long Term Investor Rights [Member] | ||
Total | 348 | 813 |
Underwriter's Warrants [Member] | ||
Total | 802 | 805 |
Warrants associated with convertible debt [Member] | ||
Total | 1,038 | 1,100 |
Common stock options [Member] | ||
Total | 3,675 | 3,228 |
Restricted Stock Units [Member] | ||
Total | 190 | |
Employee stock purchase plan [Member] | ||
Total | 96 |
Equity Securities (Details Narr
Equity Securities (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Equity [Abstract] | |
Shares issued for services to directors | shares | 56,054 |
Accrued services, Value | $ | $ 280,000 |
Warrants (Details)
Warrants (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Options outstanding at December 31, 2015 | 3,472 | ||
Granted | 355 | ||
Exercised | (77) | (27,344) | |
Forfeited or expired | 75 | ||
Options outstanding at March 31, 2016 | 3,675 | 3,472 | |
Options exercisable at March 31, 2016 | 1,573 | ||
Weighted Average Exercise Price | |||
Options outstanding at December 31, 2015 | $ 8.01 | ||
Granted | 4.20 | ||
Exercised | 5 | ||
Forfeited or expired | 8.70 | ||
Options outstanding at March 31, 2016 | 7.69 | $ 8.01 | |
Options exercisable at March 31, 2016 | $ 5.57 | ||
Weighted Average Remaining Contractual Life (in Years) | |||
Warrants outstanding | 6 years 8 months 16 days | 6 years 4 months 21 days | |
Warrants outstanding at March 31, 2016 | 3 years 8 months 23 days | ||
Warrant [Member] | |||
Number of Shares | |||
Options outstanding at December 31, 2015 | 1,840 | ||
Granted | |||
Exercised | 0 | ||
Forfeited or expired | |||
Options outstanding at March 31, 2016 | 1,840 | 1,840 | |
Options exercisable at March 31, 2016 | 1,840 | ||
Weighted Average Exercise Price | |||
Options outstanding at December 31, 2015 | $ 7.72 | ||
Options outstanding at March 31, 2016 | 7.72 | $ 7.72 | |
Options exercisable at March 31, 2016 | $ 7.72 | ||
Weighted Average Remaining Contractual Life (in Years) | |||
Warrants outstanding | 2 years 6 months 18 days | 2 years 9 months 18 days | |
Warrants outstanding at March 31, 2016 | 2 years 6 months 18 days |
Warrants (Details Narrative)
Warrants (Details Narrative) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Intrinsic value of warrants outstanding | $ | $ 0 |
Warrants exercised, shares | shares | 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Options outstanding at December 31, 2015 | 3,472 | ||
Granted | 355 | ||
Exercised | (77) | (27,344) | |
Forfeited or expired | (75) | ||
Options outstanding at March 31, 2016 | 3,675 | 3,472 | |
Options exercisable at March 31, 2016 | 1,573 | ||
Weighted Average Exercise Price | |||
Options outstanding at December 31, 2015 | $ 8.01 | ||
Granted | 4.20 | ||
Exercised | 5 | ||
Forfeited or expired | 8.70 | ||
Options outstanding at March 31, 2016 | 7.69 | $ 8.01 | |
Options exercisable at March 31, 2016 | $ 5.57 | ||
Weighted Average Remaining Contractual Life (in Years) | |||
Options outstanding at March 31, 2016 | 6 years 8 months 16 days | 6 years 4 months 21 days | |
Options exercisable at March 31, 2016 | 3 years 8 months 23 days |
Stock-Based Compensation (Det38
Stock-Based Compensation (Details 1) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number of Awards | |
Awarded | 355 |
Restricted Stock Units [Member] | |
Number of Awards | |
Outstanding as of December 31, 2015 | 190 |
Awarded | |
Vested | |
Forfeited/canceled | |
Outstanding as of March 31, 2016 | 190 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding as of December 31, 2015 | $ / shares | $ 12.43 |
Awarded | $ / shares | |
Vested | $ / shares | |
Forfeited/canceled | $ / shares | |
Outstanding as of March 31, 2016 | $ / shares | $ 12.43 |
Stock-Based Compensation (Det39
Stock-Based Compensation (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock-based compensation, Total | $ 946 | $ 497 |
Cost of sales [Member] | ||
Stock-based compensation, Total | 78 | 99 |
Research and development [Member] | ||
Stock-based compensation, Total | 77 | 80 |
Clinical and regulatory [Member] | ||
Stock-based compensation, Total | 48 | 70 |
Selling and marketing [Member] | ||
Stock-based compensation, Total | 108 | 89 |
General and administrative [Member] | ||
Stock-based compensation, Total | $ 635 | $ 159 |
Stock-Based Compensation (Det40
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 02, 2015 | Jun. 30, 2011 | Apr. 04, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Authorized shares | 200,000 | 200,000 | |||||
Estimated aggregate intrinsic value of stock options exercisabl | $ 100,000 | ||||||
Unrecognized compensation cost related to outstanding stock options | $ 8,700,000 | ||||||
Weighted average period, stock options | 3 years 1 month 2 days | ||||||
Exercised stock options on cashless basis to purchase, shares | 77 | 27,344 | |||||
Exercise price,stock option | $ 10.26 | ||||||
Surrendered stock options to purchase | 12,055 | ||||||
Satisfy Income and payroll tax | $ 123,684 | ||||||
Granted stock options to purchase | 355 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | Shareholder approval, amendments to Second Sight 2011 Equity Incentive Plan that will (i) increase the maximum number of shares of common stock that may be issued under the Plan from 6.0 million shares to 7.5 million shares, (ii) allow issuance of Restricted Stock Units, and (iii) permit repricing and exchanges of options at the discretion of the Board of Directors. | The Company recorded a charge of $55,000 to extend the exercise period of 98,681 vested options for one employee who resigned and became a consultant for the Company. | |||||
Common Stock, Capital Shares Reserved for Future Issuance | 52,469 | ||||||
Fair value of common stock | $ 25,000 | ||||||
Maximum number of shares purchased by a employee | 100,000 | ||||||
2003 Plan [Member] | |||||||
Authorized shares | 3,500,000 | ||||||
2011 Plan [Member] | |||||||
Granted stock options to purchase | 6,000,000 | ||||||
Employees [Member] | |||||||
Granted stock options to purchase | 324,973 | ||||||
Exercise ranges of stock options, Minimum | $ 4.10 | ||||||
Exercise ranges of stock options, Maximum | $ 4.18 | ||||||
Options exercisable period | 10 years | ||||||
Options vested perioid | P4Y | ||||||
Expected term | 6 years 3 months | ||||||
volatility | 48.20% | ||||||
Risk-free interest rate, minimum | 1.77% | ||||||
Risk-free interest rate, maximum | 1.87% | ||||||
Expected dividend rate | 0.00% | ||||||
Fair value of options | $ 645,000 | ||||||
Chief Executive Officer [Member] | |||||||
Exercised stock options on cashless basis to purchase, shares | 59,063 | ||||||
Exercise price,stock option | $ 4.75 | ||||||
Surrendered stock options to purchase | 27,344 | ||||||
Satisfy Income and payroll tax | $ 123,684 | ||||||
Common Stock [Member] | |||||||
Granted stock options to purchase | 30,000 | ||||||
Exercise ranges of stock options, Maximum | $ 5.23 | ||||||
Options exercisable period | 4 years | ||||||
Options vested | $ 15,000 | ||||||
Expected term | 6 years 3 months | ||||||
volatility | 48.20% | ||||||
Risk-free interest rate, maximum | 1.87% | ||||||
Expected dividend rate | 0.00% | ||||||
Fair value of options | $ 53,000 | ||||||
Fair value of options, average per share | $ 1.77 | ||||||
Restricted Stock Units [Member] | |||||||
Unrecognized compensation cost related to outstanding stock options | $ 1,995,000 | ||||||
Weighted average period, stock options | 3 years 4 months 17 days | ||||||
Granted stock options to purchase | |||||||
Fair value of options, average per share |