The SAFE loan of $8.0 million was cancelled in the Merger which adjusted the fair value of net assets acquired.

The following table summarizes the calculation of the gain on bargain purchase (in thousands): 

Because NPM purchased 100% of Second Sight asand the fair value of June 30, 2022. Accordingly, Second Sight Medical Products (Switzerland) Sàrl is considered 100% owned for financial statement purposesidentifiable assets acquired and is consolidated with Second Sight for all periods presented. We have closed our foreign operations and expect final dissolution of this entity in 2023.

Market Development Plans

Orion. By further developing our visual cortical prosthesis, Orion, we believe we may be able to significantly expand our market to include nearly all profoundly blind individuals. The only notable exceptions for potential useliabilities assumed exceeded the fair value of the Orion are those who are blind due to otherwise currently treatable diseases, individuals who are born blind, or blindness due to direct damageconsideration, we reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that all acquired assets and assumed liabilities were properly recognized and that the visual cortex, whichvaluation procedures and resulting measures were appropriate. As a result, we recognized a gain of $6.9 million. The gain is rare. However, of the estimated 36 million blind people worldwide, there are approximately 5.8 million people who are legally blind due to causes that are not otherwise treatable. We continue to develop and refine our estimates of the potential addressable market size as we evaluate the commercial prospects for Orion using a combination of published sources, third party market research, and physician feedback. We currently estimate over 500,000 individualsincluded in the US are legally blind due to retinitis pigmentosa, glaucoma, diabetic retinopathy, optic nerve disease and eye injury. Of this population, we estimateline item “Other income (expense)” in the potential US addressable market is between 50,000 and 100,000 individuals with bi-lateral blindness at the light-perception level or worse. Our marketing approvals by the FDA and other regulatory agencies will ultimately determine the subset of these patients who are eligible for the Orion based on our clinical trials and the associated results.

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

COVID-19 Pandemicconsolidated income statement.

We recognized $0.7 million of acquisition related costs that were expensed in the nine months ended September 30, 2022. These costs are requiring our employees to adhereincluded in the consolidated income statement in the line item entitled “General and administrative costs.”

Operating expenses of Second Sight included in the consolidated income statement from the acquisition date August 30, 2022 to the local and state guidelines regarding the COVID-19 pandemic, and use their best judgement to work remotely or workperiod ending September 30, 2022 were $0.5 million. Pro forma consolidated net loss as if Second Sight had been included in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitorconsolidated results was $21.7 million for the situationyear ended December 31, 2021, and may adjust our current policies as more information and public health guidance becomes available, restricting$20.6 million for the ability to do business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.nine months ended September 30, 2022.

SAFE

In addition, our clinical trials have been affected by

On February 4, 2022, in connection with the COVID-19 outbreak. Patient visits in ongoing clinical trialsMerger, 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 paused, for example, due to prioritization of hospital resources towardbe successfully completed.

Under the COVID-19 outbreak, travel restrictions imposed by governments, and the inability to access sites for initiation and monitoring. Also, some of our suppliers of certain materials used in the development of our product candidates are located in areas impacted by COVID-19 which could limit our ability to obtain sufficient materials for our product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets, and may result in an economic downturn that could affect demand for our product candidates, if approved, and impact our operating results. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a resultterms of the continued global economic impactSAFE, upon successfully completion of the pandemic. We cannot anticipate all ofMerger on August 30, 2022, the ways in which health epidemics such as COVID-19 could adversely impact our business. Although we are continuing to monitor and assessinvestment advance was eliminated. Under the effects ofaccounting for a business combination, the COVID-19 pandemic on our business,$8.0 million adjusted the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.purchase consideration.

Liquidity

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

We were awarded a $1.6reverse merger with Second Sight Medical Products, Inc. provided $53.3 million grant (with the intent to fund $6.4 in net assets including approximately $55.4 million over five years subject to annual review and approval) from the National Institutes of Health (NIH) to fund the “Early Feasibility Clinical Trial of a Visual Cortical Prosthesis” that commenced in January 2018. Our second year grant of $1.4 million was approved on April 6, 2021 and our third year grant of $1.4 million was approved on May 12, 2021 and the fourth year grant of $1.1 million was approved on July 18, 2022.  cash.

Our financial statements have been presented on the basis that our business is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel medical device,devices, including limitations on our operating capital resources. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future. We estimate that currently available cash will provide sufficient funds to enable the Company to meet its planned obligations for at least the next twenty-four months.

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

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

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and following the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2021, contained in our Annual Report on Form 10-K filed with the SEC on March 29, 2022.2021. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Income taxes - interim periods

In calculating the provision for interim income taxes, in accordance with ASC 740, Income Taxes, an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. This differs from the method utilized at the end of an annual period.

Use of estimates

The preparation of financial statements requires management to make a number of estimates and assumptions related to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the period. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Some of the more significant estimates include the purchase price of net assets acquired in the Merger, useful lives of long-lived assets, the fair value of equity-based compensation and evaluation of going concern. Actual results could differ materially from those estimates. 

Net income/loss per share

Basic net income/loss per share is computed using net income/loss from operations divided by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income/loss per share represents net income/loss from operations divided by the weighted- average number of common shares outstanding during the period, including all potentially dilutive common stock equivalents. Common stock equivalents consist of shares subject to warrants and share-based awards with exercise prices less than the average market price of common stock for the period, to the extent their inclusion would be dilutive.

The computation of the weighted-average shares of common stock outstanding for diluted EPS excludes the following potential common shares as of September 30, 2022 and 2021 (in thousands):

The shares underlying the SAFE obligation were issuable only if the Merger were to be terminated. These contingently issuable shares were excluded from the dilutive computation because conversion was not “probable” as defined in the accounting literature. However, if the evaluation met the probability threshold, the shares would be excluded from diluted EPS since their inclusion would have an anti-dilutive effect.

Significant Accounting Policies

Our significant accounting policies are set forth in Note 2 of theour financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.2021 as filed in the prospectus.

Recently Issued Accounting Pronouncements

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

3. Concentration of Risk

Credit Risk

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

Foreign Operations

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

4. Fair Value Measurements

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

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

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

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

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

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

5. Selected Balance Sheet Detail  

Property and equipment

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

Contract Liabilities

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

Product Warranties

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

Right-of-use assets and operating lease liabilities

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

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

Schedule of right of use assets and operating lease liabilties

Schedule of lease liabilities

Rent expense, including common area maintenance charges, was $49,0000.2 million and $27,0000.2 million and $98,0000.7 million and $49,0000.6 million during the three and six-monthnine-month periods ended JuneSeptember 30, 2022 and 2021, respectively.

6.Equity Securities  

Potentially Dilutive Common Stock Equivalents

As of June 30, 2022 and 2021, we excluded the potentially dilutive securities summarized below, which entitle the holders thereofWe are authorized to potentially acquireissue 300,000,000 shares of common stock from our calculationswith 50,735,770 issued as of net loss perSeptember 30, 2022. In addition, we are authorized to issue 10,000,000 shares of preferred stock with none issued. On August 19, 2022 the Company initiated a reverse stock split of one share and weighted average common shares outstanding, as their effect wouldfor every three shares. All share numbers have been anti-dilutive (in thousands)retroactively adjusted for the split. On August 30, 2022, 13,136,362.

shares were deemed issued for the merger acquisition.

7. Warrants

On February 22, 2019, we completed a registered rights offering

NPM, prior to existing stockholders in which we sold approximately 5,976,000 units at $5.792 per unit, which was the adjusted closing price of our common stock on that date. Each Unit consisted of a share of ourMerger, issued common stock and a warrantwarrants (collectively, the “unit” or “units”) in 2019, 2020 and 2021 for $3.147 per unit. Outstanding warrants to purchase an additionalcommon stock are shown in the table below and generally expire 5 years from the date of issuance at $3.147 per share, are transferable into one share of ourcommon stock for $11.76.and may be exercised on a cashless basis. The warrants have a five-year lifequalified for an exception to derivative accounting and, trade on Nasdaq underaccordingly, their value was not bifurcated from the symbol EYESW.total purchase price.

On March 6, 2017, we completedThe other adjustment for 2,563,688 warrants in the table below were outstanding Second Sight warrants exchanged as part of the Merger for VIVANI warrants on a registered rights offering to existing stockholders in which we sold approximately 1,706,000 units at $11.76 per unit, which was the adjusted closing price of our common stock on that date. Each unit consisted of a share of our comm11.76 on stock and a warrant to purchase an additional share of our stock for $11.76.like-for-like basis. The warrants hadare tradeable on the open market. Under accounting standards in a five-year life butbusiness combination, these warrants were extended to expire in February, 2024 to coincide with the February 22, 2019 warrants.

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

were substantially out-of-the-money and were assigned no value.

A summary of warrantswarrant activity for the sixnine months ended JuneSeptember 30, 2022 is presented below (in thousands, except per share and contractual life datadata).).

The warrants outstanding as of JuneSeptember 30, 2022 had $8,000no in intrinsic value.

8. Stock-Based Compensation

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

The estimated aggregate intrinsic value of stock options exercisable as of JuneSeptember 30, 2022 was $25,0000.9 million. As of JuneSeptember 30, 2022, there was $0.11.9 million of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted average period of 0.751.16 years. In connection with the Merger, 272 options presented in the table above were outstanding Second Sight options exchanged as part of the Merger for VIVANI options on a like-for-like basis. Under accounting standards in a business combination, these options have been measured at fair value as of the Merger date; however, the options were substantially out-of-the-money and were assigned no value.

During the quarter ended September 30, 2022, we granted stock options to purchase 453,576 shares of common stock to certain employees and board members. The options are exercisable for a period of ten years from the date of grant at a price of $2.80 per share, which was the fair value of our common stock on the respective grant date. The options generally vest over a period of four years. The fair value of these options, calculated using the Black-Scholes option-pricing model, was determined to be $1.0 million ($2.01 to $2.20 per share) using the following assumptions: expected term of 4.25 to 5.58 years, volatility of 100%, risk-free interest rate of 3.42% to 3.60%, and expected dividend rate of 0.0%.

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

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

9.Risk and Uncertainties

COVID-19 has directly and indirectly adversely affected Second Sight and will likely continue to do so for an uncertain period of time. We are asking our employees to adhere to local and state guidelines regarding the COVID-19 pandemic and use their best judgement to work remotely or work in the office. While many of our employees are accustomed to working remotely, much of our workforce has not historically been remote. Although we continue to monitor the situationongoing COVID-19 global pandemic which has resulted in travel and may adjust our current policies as more informationother restrictions to reduce the spread of the disease. We presently are not experiencing any significant disruptions from the ongoing COVID-19 pandemic. All clinical and publicchemistry, manufacturing and control activities are currently active.

The safety, health guidance becomes available, restrictingand well-being of all patients, medical staff and internal and external teams is the abilityparamount and primary focus. As the pandemic and its resulting restrictions evolve in jurisdictions across the country, the potential exists for further disruptions to doprojected timelines. We are in close communication with clinical teams and key vendors and are prepared to take action should the pandemic worsen and impact the business in person may create operational or other challenges, any of which could harm our business, financial condition and results of operations.

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

10. Litigation, Claims and Assessments

Three oppositions filed by Pixium Vision SA (“Pixium”) are pending in the European Patent Office, each challenging the validity of a European patent owned by us. The outcomes of the challenges are not certain, however, if successful, they may affect our ability to block competitors from utilizing our patented technology. We do not 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 hadSecond Sight entered into a Memorandum of Understanding (“MOU”) for a proposed business combination with Pixium. In response to a press release by Pixium dated March 24, 2021, and subsequent communications between usSecond Sight and Pixium, ourSecond Sight’s Board of Directors determined that the business combination with Pixium was not in the best interest of ourtheir shareholders. On April 1, 2021, weSecond Sight gave notice to Pixium that wethey 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. WeSecond Sight accrued $1,000,000 of liquidated damages as contemplated by the MOU in accounts payable as of March 31, 2021 and remitted that amount to Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claims damages of approximately €5.1 million or about $5.25.1 million at current exchange rates. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000 and thus the Company does not believe any further loss accrual is necessary.

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

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

10. Subsequent Events

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

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited 2021 financial statements and related notes included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 29, 2022.10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our products, plans and strategy for our business and related financing, contains forward-looking statements that involve risks and uncertainties, including statements regarding our expected financial results in future periods. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “projects,” “will,” “would,” “strategy” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding expectations for revenues, liquidity, cash flows and financial performance, the anticipated results of our development efforts and the timing for receipt of required regulatory approvals, insurance reimbursements and product launches, our financing plans and future capital requirements, and statements regarding the anticipated or projected impact of our merger with NPM (as defined below), if and when occurs, on our business, results of operations, financial condition or prospects, the materially adverse impact of the recent COVID-19 coronavirus pandemic and related public health measures on our business. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. We assume no obligations to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect actual outcomes.

Second SightVivani Medical, Products, Inc. (“Second Sight,Vivani,” the “Company,” “we,” “us,” “our” or similar terms) has developed, manufactured and marketed implantable visual prosthetics that are intended to deliver useful artificial vision to blind individuals. We areis a recognized global leader in neuromodulation devices for blindness and are committed toclinical-stage company developing new technologiestherapeutic implants to treat conditions with high unmet medical need. Vivani’s biopharm division, which is the broadest populationmain focus of sight-impaired individuals.

Leveraging our 20 yearsthe company, develops miniaturized, subdermal drug implants utilizing its proprietary NanoPortal™ technology to enable long-term, near constant-rate delivery of experiencea broad range of medicines to treat chronic diseases. An alarmingly significant 50% of patients are non-adherent to their medicines, contributing to more than $500 billion in neuromodulationavoidable healthcare costs and approximately 125,000 potentially preventable deaths per year in the US alone. Vivani’s portfolio of tiny, sub-dermal drug implants seeks to address medication non-adherence by providing steady levels of medication over a target duration of six months or longer. Vivani’s lead product, NPM-119, is a 6-month implant candidate under investigation for vision,the treatment of Type 2 diabetes. Medication non-adherence is a primary reason why Type 2 diabetes treatments face significant challenges in achieving positive real-world effectiveness. Based on feedback from the U.S. FDA, we expect to utilize the 505(b)(2) pathway under the Food, Drug and Cosmetics Act for the development of NPM-119.  In addition to NPM-119, we are also exploring compounds in the feasibility stage for feline pre-diabetes and diabetes, non-alcoholic steatohepatitis and human obesity.  If regulatory approval is obtained, we expect our product candidates in our biopharm division to compete in markets with large potential.  Vivani’s neuromodulation division is developing the Orion^® Visual Cortical Prosthesis System (“Orion”), an implanted cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes, including glaucoma, diabetic retinopathy, optic nerve injury or disease and eye injury. Orion is intended to convert images captured by a miniature video camera mounted on glasses into a series of small electrical pulses. The device is designed to bypass diseased or injured eye anatomy and to transmit these electrical pulses wirelessly to an array of electrodes implanted on the surface of the brain’s visual cortex, where it is intended to provide the perception of patterns of light. We are conducting an Early Feasibility Study of the Orion device at the Ronald Reagan UCLA Medical Center in Los Angeles (“UCLA”) and Baylor College of Medicine in Houston (“Baylor”).   Regularly scheduled visits at both sites were paused in mid-March 2020 due

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 would become a wholly-owned subsidiary of Second Sight. On August 30, 2022, the coronavirus outbreak, however visits at UCLA resumed mid-September 2020two companies completed the merger, concurrent with which Second Sight changed its name to Vivani Medical, Inc. and Baylor resumed in December 2020. Our 36-month results, allnow conducts the present business of which were measured after the study resumed, indicateCompany. In September 2022, we announced the formation of the Company’s Biopharm Division to us that:advance the assets of the former NPM and the Neuromodulation Division to advance the assets of the former Second Sight.  

Below is a summary of other key business highlights and upcoming milestones:

Biopharm Division  

NPM-119 (GLP-1 receptor agonist implant) 

Pipeline