Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 27, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-36747 | ||
Entity Registrant Name | Vivani Medical, Inc. | ||
Entity Central Index Key | 0001266806 | ||
Entity Tax Identification Number | 02-0692322 | ||
Entity Incorporation, State or Country Code | CA | ||
Entity Address, Address Line One | 5858 Horton Street | ||
Entity Address, Address Line Two | Suite 280 | ||
Entity Address, City or Town | Emeryville | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94608 | ||
City Area Code | 818 | ||
Local Phone Number | 833-5000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 57,100,000 | ||
Entity Common Stock, Shares Outstanding | 50,735,770 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Registrant intends to file a definitive proxy statement pursuant to Regulation 14A with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of registrant’s fiscal year end of December 31, 2022. | ||
Auditor Firm ID | 207 | ||
Auditor Name | BPM LLP | ||
Auditor Location | Walnut Creek, California | ||
Warrant [Member] | |||
Entity Common Stock, Shares Outstanding | 7,680,938 | ||
Common Stock [Member] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VANI | ||
Security Exchange Name | NASDAQ | ||
Warrants [Member] | |||
Title of 12(b) Security | Warrants | ||
Trading Symbol | VANIW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 45,076 | $ 2,178 |
Prepaid expenses and other current assets | 2,452 | 291 |
Total current assets | 47,528 | 2,469 |
Property and equipment, net | 1,182 | 1,173 |
Right-of-use asset | 779 | 1,611 |
Restricted cash | 1,366 | |
Deposits and other assets | 275 | 200 |
Total assets | 51,130 | 5,453 |
Current liabilities: | ||
Accounts payable | 1,177 | 281 |
Accrued expenses | 2,358 | 895 |
Litigation accrual | 1,675 | |
Accrued compensation expense | 657 | |
Current operating lease liabilities | 955 | 910 |
Total current liabilities | 6,822 | 2,086 |
Long term operating lease liabilities | 902 | |
Total liabilities | 6,822 | 2,988 |
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: 50,736 and 36,803 at December 31, 2022 and December 31, 2021, respectively | 109,050 | 54,649 |
Additional paid-in capital | 8,009 | 6,713 |
Accumulated other comprehensive loss | 35 | |
Accumulated deficit | (72,786) | (58,897) |
Total stockholders’ equity | 44,308 | 2,465 |
Total liabilities and stockholders’ equity | $ 51,130 | $ 5,453 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 50,736,000 | 36,803,000 |
Common stock, shares outstanding | 50,736,000 | 36,803,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | ||
Research and development, net of grants | $ 14,169 | $ 11,002 |
General and administrative, net of grants | 7,072 | 2,321 |
Total operating expenses | 21,241 | 13,323 |
Loss from operations | (21,241) | (13,323) |
Other income | 475 | 550 |
Gain on bargain purchase | 6,877 | |
Net loss | $ (13,889) | $ (12,773) |
Net loss per common share – basic and diluted | $ (0.36) | $ (0.39) |
Weighted average shares outstanding – basic and diluted | 38,241 | 33,092 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Net loss | $ (13,889) | $ (12,773) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 35 | |
Comprehensive loss | $ (13,854) | $ (12,773) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Stockholder's 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 | $ 43,029 | $ 5,045 | $ (46,124) | $ 1,950 | |
Balance beginning (in shares) at Dec. 31, 2020 | 32,197 | ||||
Issuance of shares of common stock and warrants, net of issuance costs | $ 11,564 | 11,564 | |||
Issuance of shares of common stock and warrants, net of issuance costs (in shares) | 3,684 | ||||
Options exercised | $ 24 | 24 | |||
Options exercised (in shares) | 355 | ||||
Warrants exercised | $ 32 | 32 | |||
Warrants exercised (in shares) | 627 | ||||
Repurchase of common stock | |||||
Repurchase of common stock (in shares) | (60) | ||||
Stock-based compensation expense | 1,668 | 1,668 | |||
Net loss | (12,773) | (12,773) | |||
Foreign currency translation adjustment | |||||
Ending balance, value at Dec. 31, 2021 | $ 54,649 | 6,713 | (58,897) | $ 2,465 | |
Balance ending (in shares) at Dec. 31, 2021 | 36,803 | 36,803,000 | |||
Options and warrants exercised, net of partial shares adjustment | $ 16 | $ 16 | |||
Options and warrants exercised, net of partial shares adjustment (in shares) | 797 | ||||
Shares issued for SSMP net assets | $ 54,385 | 54,385 | |||
Shares issued for SSMP net assets (in shares) | 13,136 | ||||
Stock-based compensation expense | 1,296 | 1,296 | |||
Net loss | (13,889) | (13,889) | |||
Foreign currency translation adjustment | 35 | 35 | |||
Ending balance, value at Dec. 31, 2022 | $ 109,050 | $ 8,009 | $ 35 | $ (72,786) | $ 44,308 |
Balance ending (in shares) at Dec. 31, 2022 | 50,736 | 50,736,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (13,889) | $ (12,773) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of property and equipment | 381 | 345 |
Stock-based compensation | 1,296 | 1,668 |
Gain on bargain purchase | (6,877) | |
PPP loan forgiveness | (641) | |
Non-cash lease expense | (36) | 14 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (476) | 102 |
Accounts payable | (1,941) | 13 |
Accrued expenses | 2,551 | 321 |
Accrued compensation expenses | 204 | |
Net cash used in operating activities | (18,787) | (10,951) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (338) | (572) |
Net cash used in investing activities | (338) | (572) |
Cash flows from financing activities: | ||
Cash acquired in merger for stock consideration | 55,374 | |
Proceeds from SAFE note | 8,000 | |
Net proceeds from sale of common stock and exercise of options and warrants | 16 | 11,620 |
Net cash provided by financing activities | 63,390 | 11,620 |
Effect of exchange rate changes on cash and cash equivalents | (1) | |
Cash, cash equivalents and restricted cash: | ||
Net Increase | 44,264 | 97 |
Balance at beginning of year | 2,178 | 2,081 |
Balance at end of year | 46,442 | 2,178 |
Supplemental disclosure of cash flow information; | ||
Income taxes | 1 | |
Non-cash investing and financing activities: | ||
Cancellation of SAFE indebtedness in merger | 8,000 | |
Net liabilities acquired in merger for stock consideration | $ 2,112 |
Organization and Business Opera
Organization and Business Operations | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | 1. Organization and Business Operations Vivani Medical, Inc. (“Vivani,” the “Company,” “we,” “us,” “our” or similar terms) is a preclinical stage biopharmaceutical company which develops miniaturized, subdermal implants utilizing its proprietary NanoPortal™ technology to enable long-term, near constant-rate delivery of a broad range of medicines to treat chronic diseases. Vivani uses this platform technology to develop and potentially commercialize drug implant candidates, alone or in collaboration with pharmaceutical company partners to address a leading cause of poor clinical outcomes in the treatment of chronic disease, medication non-adherence. For example, approximately 50% of patients treated for type 2 diabetes are non-adherent to their medicines, which can lead to poor clinical outcomes. We are developing a portfolio of miniature, sub-dermal drug implant candidates that, unlike most oral and injectable medicines, are designed with the goal of guaranteeing adherence by delivering therapeutic drug levels for up to 6 months or the life of the implant. In addition, the minimal fluctuations of drug levels dictated by our NanoPortal technology may improve the tolerability profiles for medicines that produce side effects associated with fluctuating drug levels. Vivani resulted from the business combination of Second Sight Medical Products (Second Sight) and Nano Precision Medical (NPM). Since inception, Vivani’s main priority has been the further development of the company’s lead program, NPM-119, a miniature, 6-month, GLP-1 implant candidate for the treatment of patients with type 2 diabetes under the company’s Biopharm Division (formerly NPM). In parallel, Vivani’s new management team remained committed to identifying and exploring strategic options for the Neuromodulation Division (formerly Second Sight) that will enable further development of its pioneering neurostimulation systems to help patients recover critical body functions. In February 2022, we announced the signing of a definitive merger agreement between Nano Precision Medical, Inc. (“NPM”) and Second Sight Medical Products, Inc. (“Second Sight”), pursuant to which NPM became a wholly-owned subsidiary of Second Sight. On August 30, 2022, the two companies completed the merger, concurrent with which Second Sight changed its name to Vivani Medical, Inc. and now conducts the present business of the Company. In September 2022, we announced the formation of the Company’s Biopharm Division to advance the assets of the former NPM which includes the further development of the company’s lead program, NPM-119, a miniature, 6-month, GLP-1 implant candidate for the treatment of patients with type 2 diabetes. Vivani’s new management team remains committed to identifying and exploring strategic options for the Neuromodulation Division (formerly Second Sight) that will enable further development of its pioneering neurostimulation systems to help patients recover critical body functions. On December 28, 2022, the assets and liabilities of this segment were contributed to Cortigent, Inc. a newly formed wholly owned subsidiary of Vivani, in exchange for 20 million shares of common stock of Cortigent. In March 2023, Vivani announced the filing of a Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission (“SEC”) for the proposed initial public offering of Cortigent. Cortigent is expected to continue to be majority-owned by Vivani immediately following the initial public offering. Agreement and Plan of Merger with Nano Precision Medical, Inc. On February 4, 2022, Second Sight Medical Products, Inc. (“Second Sight”) entered into an agreement and plan of merger (the “Merger Agreement”) with Nano Precision Medical, Inc. (“NPM”). The Merger was approved by the shareholders of Second Sight on July 27, 2022 and closed on August 30, 2022. Upon consummation of the Merger, NPM became a wholly-owned subsidiary of Second Sight. Concurrent with to the Merger, Second Sight changed its name to Vivani Medical, Inc. and changed its trading symbol from EYES to VANI, and trades under the ticker VANI on the NASDAQ market. Certain investors and members of the NPM board of directors are also investors and members of the board of directors of Second Sight. Under the terms and conditions of the Merger Agreement, the securities of NPM converted into the right to receive shares of Second Sight’s common stock representing 77.32 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 provided to NPM an investment advance of $8 million. The Merger Agreement provided that the SAFE would terminate if the Merger were to be successfully completed. Under the terms of the SAFE, upon successfully completion of the Merger on August 30, 2022, the investment advance was eliminated. Under the accounting for a business combination, the $ 8 The Merger involved a change of control and was accounted for as a reverse merger in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, Second Sight was treated as the “acquired” company for financial reporting purposes with NPM as the acquirer. The assets acquired and liabilities assumed by NPM were recorded at fair value under Accounting Codification Standard (“ASC 805”), Business on August 30, 2022 (the “Acquisition Date”), NPM (a calendar year-end entity) was deemed to have acquired 100% of the outstanding common shares and voting interest of Second Sight, Medical, Inc. The acquisition-date fair value of consideration transferred totaled $ 54.4 13,136 4.14 The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): At August 30, 2022 Cash $ 55,374 Property and equipment 99 Prepaid expenses 1,657 Right of use assets 140 Other assets 56 Total identifiable assets acquired 57,326 Current liabilities (3,913 ) Right of use liabilities (151 ) Total liabilities assumed 4,064 Net identifiable assets acquired $ 53,262 The SAFE loan of $ 8.0 The following table summarizes the calculation of the gain on bargain purchase (in thousands) Total consideration $ 54,385 SAFE loan forgiven (8,000 ) Less net identifiable assets acquired (53,262 ) Gain on bargain purchase $ 6,877 Because NPM purchased 100 6.9 We recognized $ 0.7 million Operating expenses of Second Sight included in the consolidated statements of operations from the acquisition date August 30, 2022 to the period ending December 30, 2022 were $2.1 million. Pro forma consolidated net loss as if Second Sight had been included in the consolidated results was $ 21.7 28.3 SAFE 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 provided to NPM an investment advance of $8 million. The agreement provided that the SAFE would terminate if the Merger were to be successfully completed. Under the terms of the SAFE, upon successfully completion of the Merger on August 30, 2022, the investment advance was eliminated. Under the accounting for a business combination, the $8.0 million adjusted the purchase consideration. Liquidity and Capital Resources From inception, our operations have been funded primarily through the sales of our common stock as well as from warrants. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We estimate that currently available cash will provide sufficient funds to enable the Company to meet its planned obligations into the second half of 2024. Our ability to continue as a going concern is dependent on our ability to develop profitable operations through implementation of our business initiatives and/or raise additional capital, however, there can be no assurances that we will be able to do so. |
Summary of Significant Accounti
Summary of Significant Accounting | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the financial statements of the Biopharm Division (formerly NPM) and the Neuromodulation Division (formerly Second Sight including Second Sight Switzerland) each of which is a reporting segment. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. We base our estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole 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. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential liabilities, valuing equity instruments and stock-based compensation, and the realization of deferred tax assets. Actual results could differ from those estimates. Reclassifications Certain items in prior period financial statements have been reclassified to conform to the presentation in the current period financial statements. Such reclassification did not impact our previously reported net loss or financial position. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash is carried at cost, which approximates fair value, and cash equivalents are carried at fair value. We generally invest funds that are in excess of current needs in high credit quality instruments such as money market funds. Restricted cash of $ 1.4 Property and Equipment Property and equipment are recorded at historical cost less accumulated depreciation and amortization. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the consolidated statements of operations. Depreciation is provided for using the straight-line method in amounts sufficient to relate the cost of assets to operations over their estimated service lives. Leasehold improvements are amortized over the shorter of the life of the asset or the related lease term. Estimated useful lives of the principal classes of assets are as follows: Schedule of estimated useful lives of principal classes of assets Lab equipment 5 – 7 Computer hardware and software 3 – 7 Leasehold improvements 2 – 5 Furniture, fixtures and equipment 5 – 10 We review our property and equipment for impairment annually or whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Depreciation and amortization of property and equipment amounted to $ 0.4 million 0.3 million Leases Leases are accounted for under FASB ASC 842, Leases The Company has elected not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with a lease as a single lease component. It also elected to exempt from capitalization all leases with an initial term of 12 months or less. Certain leases include one or more options to renew with renewal terms that can extend the lease term. The exercise of the lease renewal options is at the Company’s discretion and are included in the determination of the ROU asset and lease liability when the option is reasonably certain of being exercised. Research and Development Research and development costs are charged to operations in the period incurred and amounted to $ 14.2 million 11.0 million Patent Costs Due to the uncertainty associated with the successful development of one or more commercially viable products based on our research efforts and any related patent applications, all patent costs, including patent-related legal, filing fees and other costs, including internally generated costs, are expensed as incurred. Patent costs were $ 0.4 million 0.1 million NIH Grant From time to time, we receive grants that help fund specific development programs. Any amounts received pursuant to grants are offset against the related operating expenses as the costs are incurred. During the year ended December 31, 2022 grants offset against operating expenses were $ 0.5 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 management deems credit worthy, and at times, cash balances may be in excess of FDIC and SIPC insurance limits of $ 250,000 500,000 250,000 We also maintain cash at a bank in Switzerland. Accounts at said bank are insured up to an amount specified by the deposit insurance agency of Switzerland. Foreign Operations The accompanying consolidated financial statements as of December 31, 2022 include assets amounting to approximately $ 40,000 Fair Value of Financial Instruments 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. We determine the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, we perform an analysis of the assets and liabilities at each reporting period end. Cash equivalents, which include money market funds, are the only financial instrument measured and recorded at fair value in assets or liabilities on our consolidated balance sheet, and they are valued using Level 1 inputs. Stock-Based Compensation Pursuant to FASB ASC 718 Share-Based Payment (“ASC 718”), we record stock-based compensation expense for all stock-based awards. Under ASC 718, we estimate the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The Company accounts for forfeitures as they occur. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The assumptions used in the Black-Scholes valuation model are as follows: ● The grant price of the issuances is determined based on the fair value of the shares at the date of grant. ● The risk-free interest rate for periods within the contractual life of the option is based on the U.S. treasury yield in effect at the time of grant. ● We calculate the expected term of options using a weighted average of option vesting periods and an estimate of one-half of the period between vesting and expiration of the option. ● Volatility is determined based on our average historical volatilities since our trading history began in November 2014, supplemented with average historical volatilities of comparable companies in our similar industry. ● Expected dividend yield is based on current yield at the grant date or the average dividend yield over the historical period. We have never declared or paid dividends and have no plans to do so in the foreseeable future. Comprehensive Loss We comply with provisions of FASB ASC 220, Comprehensive Income Comprehensive loss is reported on the face of the financial statements. For the year ended December 31, 2022 comprehensive loss is the total of net loss and other comprehensive income which, for us, consists entirely of foreign currency translation adjustments and there were no material reclassifications from other comprehensive loss to net loss during the year ended December 31, 2022. Foreign Currency Translation and Transactions The financial statements and transactions of the subsidiary’s operations are reported in the local (functional) currency of Swiss francs (CHF) and translated into U.S. dollars in accordance with U.S. GAAP. Assets and liabilities of those operations are translated at exchange rates in effect at the balance sheet date. The resulting gains and losses from translating foreign currency financial statements are recorded as other comprehensive income. Revenues and expenses are translated at the average exchange rate for the reporting period. Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the foreign operations’ functional currencies are included in expenses in the consolidated statements of operations. Income Taxes We account for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, we recognize deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. We have incurred losses for tax purposes since inception and have significant tax losses and tax credit carry-forwards. Product Warranties Our policy is to warrant all shipped products against defects in materials and workmanship for up to two years by replacing failed parts. We also provide a three-year manufacturer’s warranty covering implant failure by providing a functionally-equivalent replacement implant. Accruals for product warranties are estimated based on historical warranty experience and current product performance trends and are recorded at the time revenue is recognized as a component of cost of sales. The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. The warranty liabilities are included in accrued expenses in the consolidated balance sheets and amount to $ 50,000 Net Loss per Share Our computation of earnings per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) available to common shareholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible notes payable, convertible preferred stock, common stock warrants and stock options) as if they had been converted at the beginning of the periods presented, or the issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the respective periods. Basic and diluted loss per common share is the same for all periods presented because all common stock warrants and common stock options outstanding were anti-dilutive. At December 31, 2022, and 2021, we excluded the outstanding securities summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive (in thousands). Schedule of net loss per share 2022 2021 Shares underlying warrants outstanding 10,311 9,074 Common stock options 5,272 4,542 Total 15,583 13,616 Operating Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. Our chief operating decision-maker, our CEO, reviews financial information presented for each of our segments. We consider ourselves to have two reporting segments, specifically the Biopharm Division and the Neuromodulation Division. Neither division is revenue producing. The Neuromodulation Division 2.1 19.1 1.5 12.4 13.9 6.9 2.1 million 49.0 million Recently Adopted Accounting Standards We believe that any recently issued, but not yet effective, authoritative guidance, if currently adopted, would not have a material impact on our financial statement presentation or disclosures. |
Money Market Funds
Money Market Funds | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Money Market Funds | 3. Money Market Funds Money market funds included in cash equivalents at December 31, 2022 were $ 44.4 The following table presents money market funds at their level within the fair value hierarchy at December 31, 2022 and 2021 (in thousands). Schedule of Money Market Funds at their Level within the Fair Value Hierarchy Total Level 1 Level 2 Level 3 December 31, 2022: Money market funds $ 44,417 $ 44,417 $ — $ — December 31, 2021: Money market funds $ — $ — $ — $ — |
Selected Balance Sheet Detail
Selected Balance Sheet Detail | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Selected Balance Sheet Detail | 4. Selected Balance Sheet Detail Property and equipment, net of accumulated depreciation and amortization Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): 2022 2021 Equipment $ 3,520 $ 3,174 Furniture 10 10 Leasehold improvements 12 12 Computer software 51 8 3,593 3,204 Accumulated depreciation and amortization (2,411 ) (2,031 ) Property and equipment, net $ 1,182 $ 1,173 Contract Liabilities Contract liabilities amounted to $ 335,000 |
Grants
Grants | 12 Months Ended |
Dec. 31, 2022 | |
Grants | |
Grants | 5. Grants We received an award for $ 1.6 6.4 five 0.5 0.4 0.1 |
Equity Securities
Equity Securities | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity Securities | 6. Equity Securities We are authorized to issue 300,000,000 50,735,770 10,000,000 none 13,136,362 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Warrants | 7. Warrants NPM, prior to the Merger, issued common stock and warrants (collectively, the “unit” or “units”) in 2019, 2020 and 2021 for $ 3.15 5 The other adjustment for 2,563,688 A summary of warrant activity for the years ended December 31, 2022 and 2021 is presented below (in thousands, except per share and contractual life data). Summary of Warrant Activity Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in Years) Warrants outstanding as of December 31, 2020 5,402 $ 3.15 Issued 3,672 3.15 Exercised — Forfeited or expired — Warrants outstanding as of December 31, 2021 9,074 $ 3.15 Issued — — — Exercised (1,327 ) $ 3,15 Forfeited or expired — Other adjustment 2,564 $ 35.24 1.46 Warrants outstanding as of December 31, 2022 10,311 $ 11.13 2.31 Warrants exercisable as of December 31, 2022 10,311 $ 11.13 2.31 The warrants outstanding as of December 31, 2022 have |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 8. Employee Benefit Plans We have a 401(k) Savings Retirement Plan (the “Plan”) that covers substantially all full-time employees who meet the Plan’s eligibility requirements and provides for an employee elective contribution. The Plan provides for employer matching contributions. Employer contributions are discretionary and determined annually by the Board of Directors. For the years ended December 31, 2022 and 2021, employer contributions to the Plan totaled $ 0.2 0.2 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation The Company initiated a new Incentive Plan at the time of the Merger. Under the 2022 Omnibus Plan we were authorized to issue options covering up to 20% of the outstanding shares of common stock. The maximum number of shares with respect to which options could be granted was approximately 10,147,000 shares at December 31, 2022, which is offset and reduced by options previously granted under the 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 four years and expire ten years from the grant date. The plan provides for accelerated vesting if there is a change of control, as defined in the Plan. We recognized stock-based compensation cost of $ 1.3 1.7 Summary of Option Grant using the Black-Scholes Option-pricing Model 2022 2021 Risk-free interest rate 3.42 4.45 0.7 0.9 Expected dividend yield 0 0 Expected volatility 100 100 Expected term 4.25 6.08 5 6.08 A summary of stock option activity for the years ended December 31, 2022 and 2021 is presented below (in thousands, except per share and contractual life data): Summary of Stock Option Activity Weighted Weighted Average Number Average Remaining of Exercise Contractual Shares Price Life (in Years) Options outstanding at December 31, 2020 5,888 $ 2.95 Granted 549 3.15 Exercised (1,020 ) 0.67 Forfeited or expired (875 ) 2.82 Options outstanding at December 31, 2021 4,542 2.89 Granted 866 2.31 Exercised (73 ) 1.66 Forfeited or expired (335 ) 4.16 Other adjustment 272 8.70 Options outstanding, vested and expected to vest at December 31, 2022 5,272 $ 3.07 7.15 Options exercisable at December 31, 2022 3,819 $ 3.24 6.55 The estimated aggregate intrinsic value of stock options exercisable as of December 31, 2022 was $ 151,000 2.1 million 1.2 The total stock-based compensation recognized for stock-based awards granted in the consolidated statements of operations for the years ended December 31, 2022 and 2021 is as follows (in thousands): Stock-based Compensation Expense 2022 2021 Research and development $ 896 $ 1,329 General and administrative 400 339 Total $ 1,296 $ 1,668 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 10. Income taxes As discussed in Note 1, Business Due to the net losses in 2022 and 2021, the provision for income taxes consists only of minimum California franchise taxes presented in general and administrative expenses. The components of deferred income assets and liabilities as of December 31, 2022 and 2021 are as follows (in thousands): As of December 31, 2022 As of NPM Legacy SSMP Combined NPM Deferred Tax : Accruals/reserves $ 725 $ 750 $ 1,475 $ 226 Capitalized R&E §174 1,997 459 2,456 Lease ROU 48 — 48 56 Stock Compensation 1,079 420 1,499 776 Net operating loss 16,775 27,974 44,749 14,194 R&D credit 2,358 3,961 6,319 1,671 Gross Deferred Tax Assets 22,982 33,564 56,546 16,698 Investment in Sub (1,510 ) — (1,510 ) — Accumulated depreciation/amortization (150 ) (52 ) (202 ) (120 ) Gross deferred tax liabilities (1,660 ) (52 ) (1,712 ) (120 ) Valuation Allowance (21,322 ) (33,512 ) (54,834 ) (16,804 ) Total Deferred Tax Assets, Net $ — $ — $ — $ — Change in valuation allowance for the year ended $ 4,519 $ 461 $ 4,980 $ 4,204 The reconciliation of income tax computed at the expected U.S. federal statutory tax rate of 21% to income tax expense (benefit) and the corresponding rate from operations consist of the following (in thousands): For the Year Ended December 31, 2022 NPM Legacy SSMP Combined Pre-Tax Loss (a) $ (13,889 ) $ (1,479 ) $ (13,889 ) Federal tax (benefit) at statutory rate $ (2,916 ) 21.0 % $ (311 ) 21.0 % $ (2,916 ) 21.0 % State tax (benefit), net of federal tax benefit (970 ) 7.0 % (103 ) 7.0 % (1,073 ) 7.7 % R&D tax credit from current year (687 ) 4.9 % (20 ) 0.0 % (707 ) 5.1 % Impact on effective rate of SSMP loss eliminated in consolidation — — (311 ) 2.2 % Other 55 -0.4 % (27 ) 1.8 % 28 -0.2 % Change in valuation allowance 4,519 -32.5 % 462 -31.2 % 4,980 -35.9 % Total provision for income taxes $ 1 0.0 % $ 1 -0.1 % $ 2 0.0 % (a) The pre-tax losses for NPM and Legacy SSMP are presented on a stand-alone basis and do not reflect elimination of intercompany balances and transactions; specifically, the net loss recognized by NPM on its investment in Legacy SSMP. The combined pre-tax loss reflects the elimination of intercompany balances and transactions, including NPM’s interest in Legacy SSMP’s pre-tax loss. NPM For the year ended December 31, 2021 Pre-tax income (loss) $ (12,773 ) Federal tax (benefit) at statutory rate (2,682 ) 21.0 % State tax (benefit), net of federal tax benefit (893 ) 7.0 % R&D tax credit from current year (475 ) 3.7 % Other (163 ) 1.3 % Change in valuation allowance 4,214 -33.0 % Total provision for income taxes $ 1 0.0 % The pre-tax losses for NPM and Legacy SSMP in the preceding table are presented as if each entity filed separate returns; and accordingly, the information does not reflect elimination of intercompany transactions or balances. The combined pre-tax loss in the table reflects elimination of intercompany transactions and balances. Since NPM and Legacy SSMP file as separate taxpayers, deferred tax assets and liabilities and attributes such as NOL and R&D carry-forwards of one taxpayer are not available to offset those of the other taxpayer. The combined data is presented for disclosure purposes only. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, as of December 31, 2022 and 2021, a full valuation allowance has been recorded because deferred tax assets have been assessed to be less than “more likely than not” to be realized. As of December 31, 2022, we had federal and apportioned state net operating loss (“NOL”) and federal and state R&D credit carry-forwards available to offset future taxable income and income taxes as follows (in thousands): As of December 31, 2022 NPM Legacy SSMP Pre TCJA (Tax Cuts and Jobs Acts of 2017) period federal NOL carry-forward, begin expiring 2030 $ 18,257 $ 29,095 Post TCJA period federal NOL carry-forward, with no carry-forward limitation 39,503 86,412 Total federal NOL carry-forward $ 57,760 $ 115,508 State NOL carry-forward, begin expiring 2030 $ 66,514 $ 30,439 Federal R&D tax credit carry-forward, begin expiring in 2026 1,586 20 State R&D carry-forward, begin expiring in 2026 1,973 4,989 Total R&E related deferred income tax assets (net of applicable amortization) as of December 31, 2022, in the table above, was 1,997 459 Reserve for uncertain income tax positions Nil Nil Under recently enacted U.S. tax legislation, although the treatment of tax losses generated in taxable years ending before December 31, 2017, has generally not changed, tax losses generated in taxable years beginning after December 31, 2017, may only be utilized to offset 80% of taxable income annually. This change may require NPM and Legacy SSMP to pay federal income taxes in future years despite generating a loss for federal income tax purposes in prior years. To the extent that each of the tax filers continue to generate taxable losses, unused losses will carry-forward to offset future taxable income, if any, until these unused losses expire. However, the tax filers may be unable to use these losses to offset taxable income before our unused losses expire at various dates that range from 2030 through 2038 for federal net operating losses generated before 2018. Federal net operating losses generated for year 2018 and forward do not expire. State net operating losses expire from 2030 through 2042. Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss, or NOL, carry-forwards to offset its post-change taxable income may be limited. Limitations may also apply to the utilization of other pre-change tax attributes as a result of an ownership change. Our legal subsidiary, NPM experienced an “ownership change” within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as amended, during the third quarter of 2022 as a result of the merger. The ownership change will subject its net operating loss carry-forwards to an annual limitation, which will significantly restrict its ability to use them to offset taxable income in periods following the ownership change. In general, the annual use limitation equals the aggregate value of stock at the time of the ownership change multiplied by a tax-exempt interest rate specified by the Internal Revenue Service. We have not yet fully analyzed the available information to determine the amount of the annual limitation. We periodically review the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. We use a “more likely than not” criterion for recognizing the income tax benefit of uncertain tax positions and establishing measurement criteria for income tax benefits. We have evaluated the impact of these positions and believe tax filing positions and deductions will more likely than not be sustained upon examination. Accordingly, no reserve for uncertain income tax positions has been recorded as of December 31, 2022. If the cumulative unrecognized tax benefit is recognized, there will be no effect on our effective tax rate due to the full valuation allowance. Due to the nature of the unrecognized tax benefits and the existence of tax attributes, we have not accrued any interest or penalties associated with unrecognized tax benefits in the Consolidated Statement of Operations nor recognized a liability in the Consolidated Balance Sheet. We do not believe the total amount of unrecognized benefit as of December 31, 2022, will increase or decrease significantly in the next twelve months. Beginning January 1, 2022, we are required to capitalize certain research and development expenditures in accordance with section 174 of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, instead of previously being allowed to expense. Amortization of such capitalized expenditures are allowed over a 5-year period if incurred in the U.S. or a 15-year period if incurred outside the United States. We file income tax returns in the U.S. federal jurisdiction and various states and are subject to income tax examinations by federal tax authorities for tax years ended 2017 and later and by state authorities for tax years ended 2016 and later. We currently are not under examination by any tax authority. Our policy is to record interest and penalties on uncertain tax positions as income tax expense. As of December 31, 2021, and 2020, we have no accrued interest or penalties related to uncertain tax positions. Second Sight Switzerland, our foreign subsidiary, has not had any taxable income in the prior and current years. |
Right-of-use Assets and Operati
Right-of-use Assets and Operating Lease Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Right-of-use Assets And Operating Lease Liabilities | |
Right-of-use Assets and Operating Lease Liabilities | 11. 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 based on the information available at commencement date in determining the present value of lease payments. The Company evaluated the lease amendment under the provisions of ASC 842. Information related to the Company’s right-of-use assets and related lease liabilities are as followings (in thousands, except for remaining lease term and discount rate): Year ending December 31: 2023 975 Total lease payments 975 Less: Imputed interest (20 ) Total lease liabilities $ 955 Other supplemental information: Current operating lease liabilities $ 955 Long term operating lease liabilities — Total lease liabilities $ 955 For the year ended December 31, 2022 For the year ended December 31, 2021 Cash paid for operating lease liabilities $ 1.0 million $ 0.9 million Rent expense, including common area maintenance charges, was $ 0.9 million 0.8 million |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Indemnification Agreements We maintain indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. Clinical Trial Agreements Based upon FDA approval of Argus II, which was obtained in February 2013, we were required to collect follow-up data from subjects enrolled in our pre-approval trial for a period of up to ten years post-implant, which was extended through the year 2019. This requirement to collect follow-up data was halted in 2020 with FDA approval. In addition, we conducted three post-market studies to comply with U.S. FDA, French, and European post-market surveillance regulations and requirements and are conducting an early feasibility clinical study of Orion. We have contracted with various universities, hospitals, and medical practices to provide these services. Payments are based on procedures performed for each subject and are charged to clinical and regulatory expense as incurred. Total amounts charged to expense for the year ended December 31, 2022 were $ 0.2 Litigation, Claims and Assessments Three oppositions filed by Pixium Vision 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 Vision SA (“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 Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $ 1,000,000 On December 9, 2022, the Company received notice that the Paris Commercial Court has rendered its judgement, including finding that the Company’s termination of the MOU was not valid. In the judgement, the Company was ordered to pay to Pixium the amount of €2,500,000 minus a €947,780 credit for the $1,000,000 already paid for, a net amount payable of approximately €1,552,220. The Company may appeal the decision within three months from the date of service. The Company recorded a charge of $1,675,000 for the year ended December 31, 2022 related to this matter but plans to raise any and all legal challenges to this preliminary judgement. 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 financial statements, however the results of litigation and claims are inherently unpredictable. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Event On February 1, 2023 Cortigent entered into a lease agreement, effective March 1, 2023, to sublease office space to replace our existing headquarters. Our rental payments amount to $ 22,158 lease 14,823 square feet of office space at 27200 Tourney Road, Valencia, California 91355. The sub-lease has a term of two years and two months. We also entered into a lease for storage space on January 25, 2023 in the same building at a cost of $6,775 per month for a term of two years and one month. As of January 2023, Cortigent commenced to pay Mr. Adams $25,000 per month for his services to us. In March 2023 we entered into an at will letter agreement with Jonathan Adams by which we appointed him President and Chief Executive Officer of Cortigent at a base salary of $350,000 per year commencing as of March 1, 2023. He may also receive a onetime signing bonus of up to $50,000 upon Board approval. Upon Board approval following completion of the initial public offering of securities, Mr. Adams may also be issued an option to purchase 400,000 shares of our common stock at a strike price equal to the price per share at which shares initially are sold to the public in this offering. Of these, options to purchase 100,000 shares will vest on November 10, 2023 and the balance shall vest in approximately equal monthly instalments over the ensuing 36 months. In March 2023 Cortigent entered into a Transition Funding, Support and Services Agreement with Vivani whereby Vivani will advance funds and provide or cause to be provided to the Company the services and funding that will cover salaries and related costs, rent and other overhead in order to permit the Company to operate in substantially the same manner in which business operations of the Company were previously operated by Second Sight, prior to the formation of Cortigent, which obligations will continue, in the case of the funding obligations, until the earlier of December 31, 2024 or receipt of proceeds from this offering. Vivani entered into a triple net lease agreement for a single building with 43,645 square feet of space in Alameda, California on November 21, 2022. The stated term of the lease commences on June 1, 2023 and terminates on September 30, 2033, ten years and 4 months. Payments increase annually from $2,676,311 to $3,596,784, or 124 payments less the first four which are abated, totalling approximately $31 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Policies Principles of Consolidation | Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the financial statements of the Biopharm Division (formerly NPM) and the Neuromodulation Division (formerly Second Sight including Second Sight Switzerland) each of which is a reporting segment. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. We base our estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole 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. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential liabilities, valuing equity instruments and stock-based compensation, and the realization of deferred tax assets. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain items in prior period financial statements have been reclassified to conform to the presentation in the current period financial statements. Such reclassification did not impact our previously reported net loss or financial position. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash is carried at cost, which approximates fair value, and cash equivalents are carried at fair value. We generally invest funds that are in excess of current needs in high credit quality instruments such as money market funds. Restricted cash of $ 1.4 |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost less accumulated depreciation and amortization. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the consolidated statements of operations. Depreciation is provided for using the straight-line method in amounts sufficient to relate the cost of assets to operations over their estimated service lives. Leasehold improvements are amortized over the shorter of the life of the asset or the related lease term. Estimated useful lives of the principal classes of assets are as follows: Schedule of estimated useful lives of principal classes of assets Lab equipment 5 – 7 Computer hardware and software 3 – 7 Leasehold improvements 2 – 5 Furniture, fixtures and equipment 5 – 10 We review our property and equipment for impairment annually or whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Depreciation and amortization of property and equipment amounted to $ 0.4 million 0.3 million |
Leases | Leases Leases are accounted for under FASB ASC 842, Leases The Company has elected not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with a lease as a single lease component. It also elected to exempt from capitalization all leases with an initial term of 12 months or less. Certain leases include one or more options to renew with renewal terms that can extend the lease term. The exercise of the lease renewal options is at the Company’s discretion and are included in the determination of the ROU asset and lease liability when the option is reasonably certain of being exercised. |
Research and Development | Research and Development Research and development costs are charged to operations in the period incurred and amounted to $ 14.2 million 11.0 million |
Patent Costs | Patent Costs Due to the uncertainty associated with the successful development of one or more commercially viable products based on our research efforts and any related patent applications, all patent costs, including patent-related legal, filing fees and other costs, including internally generated costs, are expensed as incurred. Patent costs were $ 0.4 million 0.1 million |
NIH Grant | NIH Grant From time to time, we receive grants that help fund specific development programs. Any amounts received pursuant to grants are offset against the related operating expenses as the costs are incurred. During the year ended December 31, 2022 grants offset against operating expenses were $ 0.5 |
Concentration of Risk | 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 management deems credit worthy, and at times, cash balances may be in excess of FDIC and SIPC insurance limits of $ 250,000 500,000 250,000 We also maintain cash at a bank in Switzerland. Accounts at said bank are insured up to an amount specified by the deposit insurance agency of Switzerland. |
Foreign Operations | Foreign Operations The accompanying consolidated financial statements as of December 31, 2022 include assets amounting to approximately $ 40,000 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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. We determine the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, we perform an analysis of the assets and liabilities at each reporting period end. Cash equivalents, which include money market funds, are the only financial instrument measured and recorded at fair value in assets or liabilities on our consolidated balance sheet, and they are valued using Level 1 inputs. |
Stock-Based Compensation | Stock-Based Compensation Pursuant to FASB ASC 718 Share-Based Payment (“ASC 718”), we record stock-based compensation expense for all stock-based awards. Under ASC 718, we estimate the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The Company accounts for forfeitures as they occur. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The assumptions used in the Black-Scholes valuation model are as follows: ● The grant price of the issuances is determined based on the fair value of the shares at the date of grant. ● The risk-free interest rate for periods within the contractual life of the option is based on the U.S. treasury yield in effect at the time of grant. ● We calculate the expected term of options using a weighted average of option vesting periods and an estimate of one-half of the period between vesting and expiration of the option. ● Volatility is determined based on our average historical volatilities since our trading history began in November 2014, supplemented with average historical volatilities of comparable companies in our similar industry. ● Expected dividend yield is based on current yield at the grant date or the average dividend yield over the historical period. We have never declared or paid dividends and have no plans to do so in the foreseeable future. |
Comprehensive Loss | Comprehensive Loss We comply with provisions of FASB ASC 220, Comprehensive Income Comprehensive loss is reported on the face of the financial statements. For the year ended December 31, 2022 comprehensive loss is the total of net loss and other comprehensive income which, for us, consists entirely of foreign currency translation adjustments and there were no material reclassifications from other comprehensive loss to net loss during the year ended December 31, 2022. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The financial statements and transactions of the subsidiary’s operations are reported in the local (functional) currency of Swiss francs (CHF) and translated into U.S. dollars in accordance with U.S. GAAP. Assets and liabilities of those operations are translated at exchange rates in effect at the balance sheet date. The resulting gains and losses from translating foreign currency financial statements are recorded as other comprehensive income. Revenues and expenses are translated at the average exchange rate for the reporting period. Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the foreign operations’ functional currencies are included in expenses in the consolidated statements of operations. |
Income Taxes | Income Taxes We account for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, we recognize deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. We have incurred losses for tax purposes since inception and have significant tax losses and tax credit carry-forwards. |
Product Warranties | Product Warranties Our policy is to warrant all shipped products against defects in materials and workmanship for up to two years by replacing failed parts. We also provide a three-year manufacturer’s warranty covering implant failure by providing a functionally-equivalent replacement implant. Accruals for product warranties are estimated based on historical warranty experience and current product performance trends and are recorded at the time revenue is recognized as a component of cost of sales. The warranty liabilities are reduced by material and labor costs used to replace parts over the warranty period in the periods in which the costs are incurred. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. The warranty liabilities are included in accrued expenses in the consolidated balance sheets and amount to $ 50,000 |
Net Loss per Share | Net Loss per Share Our computation of earnings per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) available to common shareholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible notes payable, convertible preferred stock, common stock warrants and stock options) as if they had been converted at the beginning of the periods presented, or the issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the respective periods. Basic and diluted loss per common share is the same for all periods presented because all common stock warrants and common stock options outstanding were anti-dilutive. At December 31, 2022, and 2021, we excluded the outstanding securities summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive (in thousands). Schedule of net loss per share 2022 2021 Shares underlying warrants outstanding 10,311 9,074 Common stock options 5,272 4,542 Total 15,583 13,616 |
Operating Segments | Operating Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. Our chief operating decision-maker, our CEO, reviews financial information presented for each of our segments. We consider ourselves to have two reporting segments, specifically the Biopharm Division and the Neuromodulation Division. Neither division is revenue producing. The Neuromodulation Division 2.1 19.1 1.5 12.4 13.9 6.9 2.1 million 49.0 million |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards We believe that any recently issued, but not yet effective, authoritative guidance, if currently adopted, would not have a material impact on our financial statement presentation or disclosures. |
Organization and Business Ope_2
Organization and Business Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): | The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): At August 30, 2022 Cash $ 55,374 Property and equipment 99 Prepaid expenses 1,657 Right of use assets 140 Other assets 56 Total identifiable assets acquired 57,326 Current liabilities (3,913 ) Right of use liabilities (151 ) Total liabilities assumed 4,064 Net identifiable assets acquired $ 53,262 |
The following table summarizes the calculation of the gain on bargain purchase (in thousands) | The following table summarizes the calculation of the gain on bargain purchase (in thousands) Total consideration $ 54,385 SAFE loan forgiven (8,000 ) Less net identifiable assets acquired (53,262 ) Gain on bargain purchase $ 6,877 |
Summary of Significant Accoun_3
Summary of Significant Accounting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of principal classes of assets | Schedule of estimated useful lives of principal classes of assets Lab equipment 5 – 7 Computer hardware and software 3 – 7 Leasehold improvements 2 – 5 Furniture, fixtures and equipment 5 – 10 |
Schedule of net loss per share | Schedule of net loss per share 2022 2021 Shares underlying warrants outstanding 10,311 9,074 Common stock options 5,272 4,542 Total 15,583 13,616 |
Money Market Funds (Tables)
Money Market Funds (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Money Market Funds at their Level within the Fair Value Hierarchy | The following table presents money market funds at their level within the fair value hierarchy at December 31, 2022 and 2021 (in thousands). Schedule of Money Market Funds at their Level within the Fair Value Hierarchy Total Level 1 Level 2 Level 3 December 31, 2022: Money market funds $ 44,417 $ 44,417 $ — $ — December 31, 2021: Money market funds $ — $ — $ — $ — |
Selected Balance Sheet Detail (
Selected Balance Sheet Detail (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): | Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): 2022 2021 Equipment $ 3,520 $ 3,174 Furniture 10 10 Leasehold improvements 12 12 Computer software 51 8 3,593 3,204 Accumulated depreciation and amortization (2,411 ) (2,031 ) Property and equipment, net $ 1,182 $ 1,173 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Summary of Warrant Activity | A summary of warrant activity for the years ended December 31, 2022 and 2021 is presented below (in thousands, except per share and contractual life data). Summary of Warrant Activity Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in Years) Warrants outstanding as of December 31, 2020 5,402 $ 3.15 Issued 3,672 3.15 Exercised — Forfeited or expired — Warrants outstanding as of December 31, 2021 9,074 $ 3.15 Issued — — — Exercised (1,327 ) $ 3,15 Forfeited or expired — Other adjustment 2,564 $ 35.24 1.46 Warrants outstanding as of December 31, 2022 10,311 $ 11.13 2.31 Warrants exercisable as of December 31, 2022 10,311 $ 11.13 2.31 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Option Grant using the Black-Scholes Option-pricing Model | We recognized stock-based compensation cost of $ 1.3 1.7 Summary of Option Grant using the Black-Scholes Option-pricing Model 2022 2021 Risk-free interest rate 3.42 4.45 0.7 0.9 Expected dividend yield 0 0 Expected volatility 100 100 Expected term 4.25 6.08 5 6.08 |
Summary of Stock Option Activity | A summary of stock option activity for the years ended December 31, 2022 and 2021 is presented below (in thousands, except per share and contractual life data): Summary of Stock Option Activity Weighted Weighted Average Number Average Remaining of Exercise Contractual Shares Price Life (in Years) Options outstanding at December 31, 2020 5,888 $ 2.95 Granted 549 3.15 Exercised (1,020 ) 0.67 Forfeited or expired (875 ) 2.82 Options outstanding at December 31, 2021 4,542 2.89 Granted 866 2.31 Exercised (73 ) 1.66 Forfeited or expired (335 ) 4.16 Other adjustment 272 8.70 Options outstanding, vested and expected to vest at December 31, 2022 5,272 $ 3.07 7.15 Options exercisable at December 31, 2022 3,819 $ 3.24 6.55 |
Stock-based Compensation Expense | The total stock-based compensation recognized for stock-based awards granted in the consolidated statements of operations for the years ended December 31, 2022 and 2021 is as follows (in thousands): Stock-based Compensation Expense 2022 2021 Research and development $ 896 $ 1,329 General and administrative 400 339 Total $ 1,296 $ 1,668 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
The components of deferred income assets and liabilities as of December 31, 2022 and 2021 are as follows (in thousands): | The components of deferred income assets and liabilities as of December 31, 2022 and 2021 are as follows (in thousands): As of December 31, 2022 As of NPM Legacy SSMP Combined NPM Deferred Tax : Accruals/reserves $ 725 $ 750 $ 1,475 $ 226 Capitalized R&E §174 1,997 459 2,456 Lease ROU 48 — 48 56 Stock Compensation 1,079 420 1,499 776 Net operating loss 16,775 27,974 44,749 14,194 R&D credit 2,358 3,961 6,319 1,671 Gross Deferred Tax Assets 22,982 33,564 56,546 16,698 Investment in Sub (1,510 ) — (1,510 ) — Accumulated depreciation/amortization (150 ) (52 ) (202 ) (120 ) Gross deferred tax liabilities (1,660 ) (52 ) (1,712 ) (120 ) Valuation Allowance (21,322 ) (33,512 ) (54,834 ) (16,804 ) Total Deferred Tax Assets, Net $ — $ — $ — $ — Change in valuation allowance for the year ended $ 4,519 $ 461 $ 4,980 $ 4,204 |
The reconciliation of income tax computed at the expected U.S. federal statutory tax rate of 21% to income tax expense (benefit) and the corresponding rate from operations consist of the following (in thousands): | The reconciliation of income tax computed at the expected U.S. federal statutory tax rate of 21% to income tax expense (benefit) and the corresponding rate from operations consist of the following (in thousands): For the Year Ended December 31, 2022 NPM Legacy SSMP Combined Pre-Tax Loss (a) $ (13,889 ) $ (1,479 ) $ (13,889 ) Federal tax (benefit) at statutory rate $ (2,916 ) 21.0 % $ (311 ) 21.0 % $ (2,916 ) 21.0 % State tax (benefit), net of federal tax benefit (970 ) 7.0 % (103 ) 7.0 % (1,073 ) 7.7 % R&D tax credit from current year (687 ) 4.9 % (20 ) 0.0 % (707 ) 5.1 % Impact on effective rate of SSMP loss eliminated in consolidation — — (311 ) 2.2 % Other 55 -0.4 % (27 ) 1.8 % 28 -0.2 % Change in valuation allowance 4,519 -32.5 % 462 -31.2 % 4,980 -35.9 % Total provision for income taxes $ 1 0.0 % $ 1 -0.1 % $ 2 0.0 % (a) The pre-tax losses for NPM and Legacy SSMP are presented on a stand-alone basis and do not reflect elimination of intercompany balances and transactions; specifically, the net loss recognized by NPM on its investment in Legacy SSMP. The combined pre-tax loss reflects the elimination of intercompany balances and transactions, including NPM’s interest in Legacy SSMP’s pre-tax loss. NPM For the year ended December 31, 2021 Pre-tax income (loss) $ (12,773 ) Federal tax (benefit) at statutory rate (2,682 ) 21.0 % State tax (benefit), net of federal tax benefit (893 ) 7.0 % R&D tax credit from current year (475 ) 3.7 % Other (163 ) 1.3 % Change in valuation allowance 4,214 -33.0 % Total provision for income taxes $ 1 0.0 % |
As of December 31, 2022, we had federal and apportioned state net operating loss (“NOL”) and federal and state R&D credit carry-forwards available to offset future taxable income and income taxes as follows (in thousands): | As of December 31, 2022, we had federal and apportioned state net operating loss (“NOL”) and federal and state R&D credit carry-forwards available to offset future taxable income and income taxes as follows (in thousands): As of December 31, 2022 NPM Legacy SSMP Pre TCJA (Tax Cuts and Jobs Acts of 2017) period federal NOL carry-forward, begin expiring 2030 $ 18,257 $ 29,095 Post TCJA period federal NOL carry-forward, with no carry-forward limitation 39,503 86,412 Total federal NOL carry-forward $ 57,760 $ 115,508 State NOL carry-forward, begin expiring 2030 $ 66,514 $ 30,439 Federal R&D tax credit carry-forward, begin expiring in 2026 1,586 20 State R&D carry-forward, begin expiring in 2026 1,973 4,989 Total R&E related deferred income tax assets (net of applicable amortization) as of December 31, 2022, in the table above, was 1,997 459 Reserve for uncertain income tax positions Nil Nil |
Right-of-use Assets and Opera_2
Right-of-use Assets and Operating Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Right-of-use Assets And Operating Lease Liabilities | |
The Company evaluated the lease amendment under the provisions of ASC 842. Information related to the Company’s right-of-use assets and related lease liabilities are as followings (in thousands, except for remaining lease term and discount rate): | The Company evaluated the lease amendment under the provisions of ASC 842. Information related to the Company’s right-of-use assets and related lease liabilities are as followings (in thousands, except for remaining lease term and discount rate): Year ending December 31: 2023 975 Total lease payments 975 Less: Imputed interest (20 ) Total lease liabilities $ 955 Other supplemental information: Current operating lease liabilities $ 955 Long term operating lease liabilities — Total lease liabilities $ 955 For the year ended December 31, 2022 For the year ended December 31, 2021 Cash paid for operating lease liabilities $ 1.0 million $ 0.9 million |
The following table summarizes
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): (Details) $ in Thousands | Aug. 30, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash | $ 55,374 |
Property and equipment | 99 |
Prepaid expenses | 1,657 |
Right of use assets | 140 |
Other assets | 56 |
Total identifiable assets acquired | 57,326 |
Current liabilities | (3,913) |
Right of use liabilities | (151) |
Total liabilities assumed | 4,064 |
Net identifiable assets acquired | $ 53,262 |
The following table summarize_2
The following table summarizes the calculation of the gain on bargain purchase (in thousands) (Details) $ in Thousands | Aug. 30, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Total consideration | $ 54,385 |
SAFE loan forgiven | (8,000) |
Less net identifiable assets acquired | (53,262) |
Gain on bargain purchase | $ 6,877 |
Organization and Business Ope_3
Organization and Business Operations (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Aug. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Purchase consideration | $ 8,000,000 | ||
Common stock, voting rights | on August 30, 2022 (the “Acquisition Date”), NPM (a calendar year-end entity) was deemed to have acquired 100% of the outstanding common shares and voting interest of Second Sight, Medical, Inc. | ||
Common stock issued | 13,136 | 50,736 | 36,803 |
Common stock, par or stated value per share | $ 4.14 | ||
Assets, fair value adjustment | $ 8,000,000 | ||
Fair value of identifiable assets acquired and liabilities | 100% | ||
Gain of other income expenses | $ 6,900,000 | ||
Business Combination, Acquisition Related Costs | 700,000 | ||
Net Income (Loss) Attributable to Parent | (13,889,000) | $ (12,773,000) | |
Pro Forma [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Net Income (Loss) Attributable to Parent | $ 28,300,000 | $ 21,700,000 | |
Series of Individually Immaterial Business Acquisitions [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Fair value of the consideration transferred | $ 54,400,000 | ||
Second Sight Switzerland Sarl [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership interest (in percentage) | 77.32% |
Schedule of estimated useful li
Schedule of estimated useful lives of principal classes of assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Schedule of net loss per share
Schedule of net loss per share (Details) - shares shares in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Shares underlying warrants outstanding | 10,311 | 9,074 |
Common stock options | 5,272 | 4,542 |
Total | 15,583 | 13,616 |
Summary of Significant Accoun_4
Summary of Significant Accounting (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted cash | $ 1,400,000 | |
Depreciation and amortization of property and equipment | 400,000 | $ 300,000 |
Research and development costs | 14,200,000 | 11,000,000 |
Patent costs | 400,000 | 100,000 |
Grants offset against operating expenses | 500,000 | |
FDIC insured amount | 250,000 | |
SPIC insured amount | 500,000 | |
SPIC cash limit coverage | 250,000 | |
Assets | 51,130,000 | 5,453,000 |
Accrued expenses | 50,000 | |
Biopharm Division [Member] | ||
Division Incurred | 2,100,000 | $ 19,100,000 |
Operating loss | 12,400,000 | |
Operating loss | 13,900,000 | |
Operating loss | 6,900,000 | |
Division incurred | 49,000,000 | |
Neuromodulation Division [Member] | ||
Operating loss | 1,500,000 | |
Division incurred | 2,100,000 | |
Country [Member] | ||
Assets | $ 40,000 |
Schedule of Money Market Funds
Schedule of Money Market Funds at their Level within the Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Impairment Effects on Earnings Per Share [Line Items] | ||
Money market funds | $ 44,417 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Money market funds | 44,417 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Money market funds | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Money market funds |
Money Market Funds (Details Nar
Money Market Funds (Details Narrative) $ in Millions | Dec. 31, 2022 USD ($) |
Money Market Funds [Member] | |
Cash and Cash Equivalents [Line Items] | |
Cash equivalents | $ 44.4 |
Property and equipment consiste
Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands): (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,593 | $ 3,204 |
Accumulated depreciation and amortization | (2,411) | (2,031) |
Property and equipment, net | 1,182 | 1,173 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,520 | 3,174 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10 | 10 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12 | 12 |
Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 51 | $ 8 |
Selected Balance Sheet Detail_2
Selected Balance Sheet Detail (Details Narrative) | Dec. 31, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Contract liabilities | $ 335,000 |
Grants (Details Narrative)
Grants (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Grants | |||
Received grant | $ 1,600 | ||
Grant receivable with intent to fund early feasibility clinical trial for five years | $ 6,400 | ||
Grant received funding period | 5 years | ||
Grants against operating expenses | $ 500 | ||
Research and development expenses | 14,169 | $ 11,002 | |
General and administrative expenses. | $ 7,072 | $ 2,321 |
Equity Securities (Details Narr
Equity Securities (Details Narrative) - shares | Dec. 31, 2022 | Aug. 30, 2022 | Dec. 31, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 | |
Common Stock, Shares, Issued | 50,736,000 | 13,136,000 | 36,803,000 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | |
Stock issued during period shares merger acquisitions | 13,136,362 | ||
Common Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common Stock, Shares Authorized | 300,000,000 | ||
Common Stock, Shares, Issued | 50,735,770 | ||
Preferred Stock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Preferred Stock, Shares Authorized | 10,000,000 | ||
Preferred Stock, Shares Issued | 0 |
Summary of Warrant Activity (De
Summary of Warrant Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Outstanding at beginning | 9,074,000 | 5,402,000 |
Outstanding at beginning | $ 3.15 | $ 3.15 |
Issued | 3,672,000 | |
Class of warrant or right exercise issued | $ 3.15 | |
Exercised | (1,327,000) | |
Forfeited or expired | ||
Class of warrant or right to be exercised | 3.15 | |
Other adjustments | 2,564,000 | |
Class of warrant or right other adjustment | $ 35.24 | |
Other adjustments (in years) | 1 year 5 months 16 days | |
Outstanding at ending | 10,311,000 | 9,074,000 |
Outstanding at ending | $ 11.13 | $ 3.15 |
Outstanding at ending (in years) | 2 years 3 months 22 days | |
Exercisable at ending | 10,311,000 | |
Exercisable at ending | 11.13 | |
Exercisable at ending (in years) | 2 years 3 months 22 days |
Warrants (Details Narrative)
Warrants (Details Narrative) - Right Offering [Member] - $ / shares | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Share price (in dollars per share) | $ 3.15 | $ 3.15 | $ 3.15 | ||
Term of warrants | 5 years | ||||
Warrants granted | 2,563,688 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Employer contributions to plan | $ 0.2 | $ 0.2 |
Summary of Option Grant using t
Summary of Option Grant using the Black-Scholes Option-pricing Model (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
stock based compensation cost | $ 1,470,000 | $ 1,668,000 |
Expected dividend yield | 0% | 0% |
Expected volatility | 100% | 100% |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate | 3.42% | 0.70% |
Expected term | 4 years 3 months | 5 years |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk-free interest rate | 4.45% | 0.90% |
Expected term | 6 years 29 days | 6 years 29 days |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options outstanding, number of shares (in shares) | 4,542 | 5,888 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 2.89 | $ 2.95 |
Granted | 866 | 549 |
Granted, weighted average exercise price (in dollars per share) | $ 2.31 | $ 3.15 |
Exercised | (73) | (1,020) |
Exercised, weighted average exercise price (in dollars per share) | $ 1.66 | $ 0.67 |
Forfeited or expired | (335) | (875) |
Forfeited or expired, weighted average exercise price (in dollars per share) | $ 4.16 | $ 2.82 |
Other adjustments | 272 | |
Other adjustments , weighted average exercise price (in dollars per share) | $ 8.70 | |
Options outstanding, number of shares (in shares) | 5,272 | 4,542 |
Options outstanding, vested and expected to vest (in dollars per share) | $ 3.07 | |
Options outstanding, vested and expected to vest (in years) | 7 years 1 month 24 days | |
Options exercisable, number of shares (in shares) | 3,819 | |
Options exercisable, weighted average exercise price (in dollars per share) | $ 3.24 | |
Options exercisable period (in years) | 6 years 6 months 18 days |
Stock-based Compensation Expens
Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated share-based compensation expense | $ 1,296 | $ 1,668 |
Research and Development Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated share-based compensation expense | 896 | 1,329 |
General and Administrative Expense [Member] | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Allocated share-based compensation expense | $ 400 | $ 339 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Stock options exercisable | $ 151,000 |
Unrecognized compensation cost | $ 2,100,000 |
Weighted average period (in years) | 1 year 2 months 12 days |
The components of deferred inco
The components of deferred income assets and liabilities as of December 31, 2022 and 2021 are as follows (in thousands): (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Accruals/reserves | $ 1,475 | |
Capitalized R&E §174 | 2,456 | |
Lease ROU | 48 | |
Stock Compensation | 1,499 | |
Net operating loss | 44,749 | |
R&D credit | 6,319 | |
Gross Deferred Tax Assets | 56,546 | |
Investment in Sub | (1,510) | |
Accumulated depreciation/amortization | (202) | |
Gross deferred tax liabilities | (1,712) | |
Valuation Allowance | (54,834) | |
Total Deferred Tax Assets, Net | ||
Change in valuation allowance for the year ended | 4,980 | |
NPM [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Accruals/reserves | 725 | $ 226 |
Capitalized R&E §174 | 1,997 | |
Lease ROU | 48 | 56 |
Stock Compensation | 1,079 | 776 |
Net operating loss | 16,775 | 14,194 |
R&D credit | 2,358 | 1,671 |
Gross Deferred Tax Assets | 22,982 | 16,698 |
Investment in Sub | (1,510) | |
Accumulated depreciation/amortization | (150) | (120) |
Gross deferred tax liabilities | (1,660) | (120) |
Valuation Allowance | (21,322) | (16,804) |
Total Deferred Tax Assets, Net | ||
Change in valuation allowance for the year ended | 4,519 | $ 4,204 |
Legacy SSMP [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Accruals/reserves | 750 | |
Capitalized R&E §174 | 459 | |
Lease ROU | ||
Stock Compensation | 420 | |
Net operating loss | 27,974 | |
R&D credit | 3,961 | |
Gross Deferred Tax Assets | 33,564 | |
Investment in Sub | ||
Accumulated depreciation/amortization | (52) | |
Gross deferred tax liabilities | (52) | |
Valuation Allowance | (33,512) | |
Total Deferred Tax Assets, Net | ||
Change in valuation allowance for the year ended | $ 461 |
The reconciliation of income ta
The reconciliation of income tax computed at the expected U.S. federal statutory tax rate of 21% to income tax expense (benefit) and the corresponding rate from operations consist of the following (in thousands): (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | |||
Operating Loss Carryforwards [Line Items] | ||||
Pre-Tax Income (Loss) | [1] | $ (13,889) | ||
Pre-Tax Income (Loss) | $ (2,916) | |||
Federal tax (benefit) at statutory rate (percent) | 21% | |||
Pre-Tax Income (Loss) | $ (1,073) | |||
State tax (benefit), net of federal tax benefit (percent) | 7.70% | |||
Pre-Tax Income (Loss) | $ (707) | |||
R&D tax credit from current year (percent) | 5.10% | |||
Pre-Tax Income (Loss) | $ (311) | |||
Effective Income Tax Rate Reconciliation, Noncontrolling Interest Income (Loss), Percent | 2.20% | |||
Pre-Tax Income (Loss) | $ 28 | |||
Other (percent) | (0.20%) | |||
Pre-Tax Income (Loss) | $ 4,980 | |||
Change in valuation allowance (percent) | (35.90%) | |||
Pre-Tax Income (Loss) | $ 2 | |||
Total provision for income taxes (percent) | 0% | |||
NPM [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Pre-Tax Income (Loss) | $ (13,889) | [1] | $ (12,773) | |
Pre-Tax Income (Loss) | $ (2,916) | $ (2,682) | ||
Federal tax (benefit) at statutory rate (percent) | 21% | 21% | ||
Pre-Tax Income (Loss) | $ (970) | $ (893) | ||
State tax (benefit), net of federal tax benefit (percent) | 7% | 7% | ||
Pre-Tax Income (Loss) | $ (687) | $ (475) | ||
R&D tax credit from current year (percent) | 4.90% | 3.70% | ||
Pre-Tax Income (Loss) | ||||
Pre-Tax Income (Loss) | $ 55 | $ (163) | ||
Other (percent) | (0.40%) | 1.30% | ||
Pre-Tax Income (Loss) | $ 4,519 | $ 4,214 | ||
Change in valuation allowance (percent) | (32.50%) | (33.00%) | ||
Pre-Tax Income (Loss) | $ 1 | $ 1 | ||
Total provision for income taxes (percent) | 0% | 0% | ||
Legacy SSMP [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Pre-Tax Income (Loss) | [1] | $ (1,479) | ||
Pre-Tax Income (Loss) | $ (311) | |||
Federal tax (benefit) at statutory rate (percent) | 21% | |||
Pre-Tax Income (Loss) | $ (103) | |||
State tax (benefit), net of federal tax benefit (percent) | 7% | |||
Pre-Tax Income (Loss) | $ (20) | |||
R&D tax credit from current year (percent) | 0% | |||
Pre-Tax Income (Loss) | ||||
Pre-Tax Income (Loss) | $ (27) | |||
Other (percent) | 1.80% | |||
Pre-Tax Income (Loss) | $ 462 | |||
Change in valuation allowance (percent) | (31.20%) | |||
Pre-Tax Income (Loss) | $ 1 | |||
Total provision for income taxes (percent) | (0.10%) | |||
[1]The pre-tax losses for NPM and Legacy SSMP are presented on a stand-alone basis and do not reflect elimination of intercompany balances and transactions; specifically, the net loss recognized by NPM on its investment in Legacy SSMP. The combined pre-tax loss reflects the elimination of intercompany balances and transactions, including NPM’s interest in Legacy SSMP’s pre-tax loss. |
As of December 31, 2022, we had
As of December 31, 2022, we had federal and apportioned state net operating loss (“NOL”) and federal and state R&D credit carry-forwards available to offset future taxable income and income taxes as follows (in thousands): (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
NPM [Member] | |
Operating Loss Carryforwards [Line Items] | |
Pre TCJA (Tax Cuts and Jobs Acts of 2017) period federal NOL carry-forward, begin expiring 2030 | $ 18,257 |
Post TCJA period federal NOL carry-forward, with no carry-forward limitation | 39,503 |
Total federal NOL carry-forward | 57,760 |
State NOL carry-forward, begin expiring 2030 | 66,514 |
Federal R&D tax credit carry-forward, begin expiring in 2026 | 1,586 |
State R&D carry-forward, begin expiring in 2026 | 1,973 |
Total R&E related deferred income tax assets (net of applicable amortization) as of December 31, 2022, in the table above, was | 1,997 |
Legacy SSMP [Member] | |
Operating Loss Carryforwards [Line Items] | |
Pre TCJA (Tax Cuts and Jobs Acts of 2017) period federal NOL carry-forward, begin expiring 2030 | 29,095 |
Post TCJA period federal NOL carry-forward, with no carry-forward limitation | 86,412 |
Total federal NOL carry-forward | 115,508 |
State NOL carry-forward, begin expiring 2030 | 30,439 |
Federal R&D tax credit carry-forward, begin expiring in 2026 | 20 |
State R&D carry-forward, begin expiring in 2026 | 4,989 |
Total R&E related deferred income tax assets (net of applicable amortization) as of December 31, 2022, in the table above, was | $ 459 |
The Company evaluated the lease
The Company evaluated the lease amendment under the provisions of ASC 842. Information related to the Company’s right-of-use assets and related lease liabilities are as followings (in thousands, except for remaining lease term and discount rate): (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Right-of-use Assets And Operating Lease Liabilities | ||
2023 | $ 975 | |
Total lease payments | 975 | |
Imputed interest | (20) | |
Total lease liabilities | 955 | |
Current operating lease liabilities | 955 | |
Long term operating lease liabilities | ||
Cash paid for operating lease liabilities | $ 1,000,000 | $ 900,000 |
Right-of-use Assets and Opera_3
Right-of-use Assets and Operating Lease Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Right-of-use Assets And Operating Lease Liabilities | ||
Rent expense | $ 900,000 | $ 800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 09, 2022 | Dec. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Clinical and regulatory expense | $ 200,000 | ||
Liquidated damage | $ 1,000,000 | ||
Description of contract termination and claims | 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 $5.6 million. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000. | ||
Loss contingency, damages paid, value | $ 1,000,000 | ||
Description of legal settlement | On December 9, 2022, the Company received notice that the Paris Commercial Court has rendered its judgement, including finding that the Company’s termination of the MOU was not valid. In the judgement, the Company was ordered to pay to Pixium the amount of €2,500,000 minus a €947,780 credit for the $1,000,000 already paid for, a net amount payable of approximately €1,552,220. The Company may appeal the decision within three months from the date of service. The Company recorded a charge of $1,675,000 for the year ended December 31, 2022 related to this matter but plans to raise any and all legal challenges to this preliminary judgement. |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | ||
Mar. 03, 2023 | Mar. 31, 2023 | Jan. 31, 2023 | |
Subsequent Event [Line Items] | |||
Rental payments amount | $ 22,158 | ||
Description of lease agreement | lease 14,823 square feet of office space at 27200 Tourney Road, Valencia, California 91355. The sub-lease has a term of two years and two months. We also entered into a lease for storage space on January 25, 2023 in the same building at a cost of $6,775 per month for a term of two years and one month. | Vivani entered into a triple net lease agreement for a single building with 43,645 square feet of space in Alameda, California on November 21, 2022. The stated term of the lease commences on June 1, 2023 and terminates on September 30, 2033, ten years and 4 months. Payments increase annually from $2,676,311 to $3,596,784, or 124 payments less the first four which are abated, totalling approximately $31 million. | |
Mr dams [Member] | Chief Executive Officer [Member] | |||
Subsequent Event [Line Items] | |||
Description of lease agreement | Mr. Adams $25,000 per month for his services to us. In March 2023 we entered into an at will letter agreement with Jonathan Adams by which we appointed him President and Chief Executive Officer of Cortigent at a base salary of $350,000 per year commencing as of March 1, 2023. He may also receive a onetime signing bonus of up to $50,000 upon Board approval. Upon Board approval following completion of the initial public offering of securities, Mr. Adams may also be issued an option to purchase 400,000 shares of our common stock at a strike price equal to the price per share at which shares initially are sold to the public in this offering. Of these, options to purchase 100,000 shares will vest on November 10, 2023 and the balance shall vest in approximately equal monthly instalments over the ensuing 36 months. |