UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant ☒

Filed by a party other than the Registrant ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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SECOND SIGHT MEDICAL PRODUCTS, INC.

(Name of Registrant as Specified In Its Charter)​

   

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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PROPOSED MERGER

YOUR VOTE IS VERY IMPORTANT

To the Shareholders of Second Sight Medical Products, Inc.:

Second Sight Medical Products, Inc. (“Second Sight”) and Nano Precision Medical, Inc. (“NPM”) have entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which a wholly-owned subsidiary of Second Sight will merge with and into NPM, with NPM surviving as a wholly-owned subsidiary of Second Sight (the “Merger”). The merger will result in a company focused on the development of innovative drug and device medical implants that treat chronic diseases with high unmet medical need.

At the effective time of the merger, the following securities of each NPM securityholder will be converted into the right to receive, or acquire through replacement options and warrants, a portion of 134,349,464 shares of Second Sight’s common stock (the “Merger Shares”). The NPM stock option holders may exercise their options in accordance with their terms. The NPM warrant holders have the right to exercise their securities at a net exercise per share rate of $21.90 prior to the merger. If the NPM stock options and NPM warrants are not exercised then (i) each NPM stock option that is outstanding will be cancelled and Second Sight will assume and/or issue in exchange a Second Sight replacement stock option, under its effective equity incentive plan(s), and (ii) each NPM warrant will adjust according to its terms to represent the right to acquire Second Sight common stock. To the extent that by their terms NPM warrants do not continue to represent the right to acquire securities of Second Sight on comparable terms to those of NPM warrants, then the parties of the Merger Agreement will negotiate in good faith and use commercially reasonable efforts to mutually agree as promptly as practicable to such amendments to the Merger Agreement as are necessary to reflect an assumption, exchange or similar accommodation for such NPM warrants, provided that such assumption, exchange or similar accommodation shall be reasonably satisfactory to each party to the Merger Agreement. The NPM common stockholders as of immediately prior to the closing, including those that have net exercised their NPM stock options and NPM warrants will receive their Pro Rata Portion (as defined in the Merger Agreement) of the Merger Shares.

Second Sight’s shareholders will continue to own and hold their existing shares of Second Sight’s common stock, adjusted for the reverse stock split if implemented before the merger.

Immediately after the merger, current shareholders, warrant holders, and option holders of NPM will own, or hold rights to acquire, approximately 77.32% of the common stock of Second Sight, which for these purposes is defined as the outstanding common stock of Second Sight (including the shares of common stock issued in the merger), plus the number of shares of Second Sight common stock issuable on conversion of options and warrants of Second Sight that were in the in-the-money as of the date of the Merger Agreement, plus the number of shares that would issue from a net exercise of all options and warrants of NPM based on a $21.90 NPM share price (the “Base Amount Common Stock of Second Sight”), with Second Sight’s current shareholders, option holders and warrant holders owning, or holding rights to acquire, approximately 22.68% of the Base Amount Common Stock of Second Sight.

Shares of Second Sight’s common stock are currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “EYES.” Prior to the consummation of the merger, Second Sight will file an initial listing application with Nasdaq pursuant to Nasdaq’s “reverse merger” rules. After completion of the merger, Second Sight will be renamed to “Vivani Medical, Inc.” and expects to trade on Nasdaq under the symbol “VANI.” On June 23, 2022, the last trading day before the date of this proxy statement/prospectus, the closing sale price of Second Sight’s common stock on Nasdaq was $2.27 per share.

Second Sight is holding an annual meeting of shareholders in order to obtain the shareholder approvals necessary to complete the merger and related matters. At the Second Sight annual meeting, which will be held virtually at 10:00 a.m., Pacific time, on July 27, 2022, unless postponed or adjourned to a later date, Second Sight will ask its shareholders, among other things:

1.

to approve the Merger Agreement and thereby approve the transactions contemplated thereby, including the merger, the issuance of the Merger Shares, and the change of control resulting from the merger;

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2.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect a reverse stock split of Second Sight’s common stock, within a range, as determined by Second Sight’s board of directors, of one new share for every 2 to 10 (or any number in between) shares outstanding (the “Second Sight Reverse Stock Split”);

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3.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect the change of name of Second Sight to “Vivani Medical, Inc.;”

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4.

to elect the six directors from the nominees named in the accompanying proxy statement to hold office for the ensuing year and until their successors are duly elected and qualified;

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5.

to approve the Second Sight 2022 Omnibus Plan (the “Second Sight 2022 Plan”);

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6.

to ratify the selection by the audit committee of the board of directors the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

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7.

to consider and vote upon an adjournment of the Second Sight annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposals; and

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8.

to transact such other business as may properly come before the Second Sight annual meeting or any adjournment or postponement thereof.

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In addition, following the effectiveness of the registration statement on Form S-4 (the “Registration Statement”), of which this proxy statement/prospectus is a part, and pursuant to the conditions of the Merger Agreement, NPM will ask its shareholders to approve by written consent a proposal to adopt and approve the Merger Agreement and the transactions contemplated thereby, including the merger.

At a meeting of a special committee of the board of directors of Second Sight (the “Special Committee”), established because of the conflict of interests of certain members of the board of directors of Second Sight as more particularly described in Related Party Transactions Of Directors And Executive Officers Of The Combined Company, the Special Committee unanimously adopted resolutions concluding and finding the transactions contemplated by the Merger Agreement (and SAFE agreement entered as a corollary thereof) to be advisable and fair to, and in the best interests of Second Sight and its shareholders and recommended the full board of directors of Second Sight to authorize the execution of the Merger Agreement and proposing that the transactions contemplated by the Merger be brought to the shareholders of Second Sight for their approval.

After careful consideration, each of Second Sight’s board of directors (following the recommendation of the Special Committee) and NPM’s board of directors has (i) determined that the transactions contemplated by the Merger Agreement are fair to, advisable, and in the best interests of Second Sight or NPM, as applicable, and their respective shareholders, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated therein and (iii) determined to recommend, upon the terms and subject to the conditions set forth in the Merger Agreement, that its shareholders vote to adopt or approve, as applicable, the Merger Agreement and, therefore, approve the transactions contemplated therein. Second Sight’s board of directors recommends that Second Sight’s shareholders vote “FOR” the proposals described in the accompanying proxy statement/prospectus.

More information about Second Sight, NPM, and the proposed transaction is contained in this proxy statement/prospectus. Second Sight and NPM urge you to read the accompanying proxy statement/​prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 23.

Second Sight and NPM are excited about the opportunities the merger brings to both Second Sight’s and NPM’s shareholders and thank you for your consideration and continued support.

If you have any questions or need assistance voting your shares, please call Second Sight’s proxy solicitor, Morrow Sodali LLC, which we refer to as Morrow, toll-free at (800) 662-5200, or via e-mail EYES@info.morrowsodali.com.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated June 24, 2022, and is first being mailed to Second Sight’s shareholders on or about June 29, 2022.

 

SECOND SIGHT MEDICAL PRODUCTS, INC.

13170 Telfair Ave
Sylmar, California 91342
(818) 833-5000

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 27, 2022

Dear Shareholders of Second Sight:

On behalf of the board of directors of Second Sight Medical Products, Inc., a California corporation (“Second Sight”), we are pleased to deliver this proxy statement/prospectus for the proposed merger between Second Sight and Nano Precision Medical, Inc., a California corporation (“NPM”), pursuant to which NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of Second Sight (“Merger Sub”), will merge with and into NPM, with NPM surviving as a wholly-owned subsidiary of Second Sight. The annual meeting of shareholders of Second Sight will be held virtually on July 27, 2022 at 10:00 a.m., Pacific time unless postponed or adjourned to a later date. The meeting will be held as a virtual meeting conducted exclusively via live webcast at www.proxydocs.com/EYES. For procedures for attending the virtual meeting, please refer to the section entitled “Questions and Answers about the Merger” beginning on page 1 of this proxy statement/prospectus. The annual meeting of the shareholders of Second Sight will be held virtually for the following purposes:

1.

to approve the Merger Agreement and thereby approve the transactions contemplated thereby, including the merger, the issuance of the Merger Shares, and the change of control resulting from the merger;

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2.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect a reverse stock split of Second Sight’s common stock, within a range, as determined by Second Sight’s board of directors, of one new share for every 2 to 10 (or any number in between) shares outstanding (the “Second Sight Reverse Stock Split”);

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3.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect the change of name of Second Sight to “Vivani Medical, Inc.”;

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4.

to elect the six directors from the nominees named in the accompanying proxy statement to hold office for the ensuing year and until their successors are duly elected and qualified;

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5.

to approve the Second Sight 2022 Omnibus Plan (the “Second Sight 2022 Plan”);

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6.

to ratify the selection by the audit committee of the board of directors the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

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7.

to consider and vote upon an adjournment of the Second Sight annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposals; and

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8.

to transact such other business as may properly come before the Second Sight annual meeting or any adjournment or postponement thereof.

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Second Sight’s board of directors has fixed June 20, 2022, as the record date for the determination of shareholders entitled to notice of, and to vote at, the Second Sight annual meeting and any adjournment or postponement thereof. Only holders of record of shares of Second Sight’s common stock at the close of business on the record date are entitled to notice of, and to vote at, the Second Sight annual meeting. At the close of business on June 17, 2022, the first trading day prior to the record date (which is a federal holiday), Second Sight had 39,409,176 shares of common stock outstanding and entitled to vote.

Your vote is important.

Assuming that a quorum is present at the annual meeting, the affirmative vote of a majority of the issued and outstanding shares of Second Sight common stock entitled to vote is required to approve Proposals Nos. 1,

 

 

2, and 3. Director nominees in Proposal No. 4 are elected by a plurality of the votes cast by the holders of shares entitled to vote in the election at the annual meeting. The affirmative vote of holders of a majority of the shares represented and voting at the annual meeting (which shares voting affirmatively also constitute at least a majority of the required quorum) is needed to approve Proposals Nos. 5 and 6. For the purpose of Proposal No. 7: (i) if a quorum is present at the annual meeting, the affirmative vote of holders of a majority of the shares represented and voting at the annual meeting (which shares voting affirmatively also constitute at least a majority of the required quorum) is needed to approve Proposal No. 7 and (ii) if a quorum is not present, at the annual meeting, a majority of the shares present and voting in person or by proxy, even if less than a majority of a quorum, would be sufficient to approve Proposal No. 7.

Each of Proposals Nos. 1, 3, and 5 are conditions to the Merger and the Merger cannot be consummated without the approval of each of Proposals Nos. 1, 3, and 5, subject to the right of NPM to waive the approval of Proposals Nos. 3 and 5 as conditions to the Merger. If Proposal No. 5 is approved by the shareholders, but the Merger is not completed or the shareholders do not approve Proposal Nos. 1 or 3, the Second Sight 2022 Omnibus Plan will, nevertheless, become effective.

By Order of Second Sight’s Board of Directors,

/s/ Scott Dunbar

Scott Dunbar, Secretary

June 24, 2022

SECOND SIGHT’S BOARD OF DIRECTORS, BASED ON THE OPINION OF THE SPECIAL COMMITTEE, HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE TO, AND IN THE BEST INTERESTS OF, SECOND SIGHT AND ITS SHAREHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. SECOND SIGHT’S BOARD OF DIRECTORS RECOMMENDS THAT SECOND SIGHT’S SHAREHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.

 

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER

Except where specifically noted, the following information and all other information contained in this proxy statement/prospectus does not give effect to the proposed reverse stock split within a range, as determined by the board of directors of Second Sight Medical Products, Inc. (“Second Sight”), of one new share for every 2 to 10 (or any number in between) shares outstanding, as described in Proposal No. 2 in this proxy statement/prospectus (the “Second Sight Reverse Stock Split”).

The following section provides answers to frequently asked questions about the Second Sight annual meeting and the merger. This section, however, provides only summary information. For a more complete response to these questions and for additional information, please refer to the cross-referenced sections.

Q:   Why am I receiving these materials?

A:

The board of directors of Second Sight is providing these proxy materials to you in connection with the solicitation of proxies for use at the annual meeting of Second Sight to be held on July 27, 2022 at 10:00 a.m. Pacific time. Due to the public health risk of the COVID-19 pandemic and to support the health and well-being of Second Sight shareholders and other meeting participants, the 2022 annual meeting of Second Sight will be held in a virtual-only format. Second Sight believes that hosting a virtual meeting will allow for greater shareholder attendance and participation from any location around the world. The virtual-only approach also lowers costs and aligns with our broader sustainability goals. You will not be able to attend the 2022 annual meeting in person.

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If Second Sight experiences technical difficulties during the meeting (e.g., a temporary or prolonged power outage), it will determine whether the meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a later day (if the technical difficulty is more prolonged).

Q:   What is the purpose of the Second Sight annual meeting?

A:

At the Second Sight annual meeting, the shareholders of Second Sight will consider and vote on the following matters:

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1.

to approve the Merger Agreement and thereby approve the transactions contemplated thereby, including the merger, the issuance of the Merger Shares, and the change of control resulting from the merger;

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2.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect a reverse stock split of Second Sight’s common stock, within a range, as determined by Second Sight’s board of directors (the “Second Sight Board”), of one new share for every 2 to 10 (or any number in between) shares outstanding (the “Second Sight Reverse Stock Split”);

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3.

to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect the change of name of Second Sight to “Vivani Medical, Inc.”;

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4.

to elect the six directors from the nominees named in the accompanying proxy statement to hold office for the ensuing year and until their successors are duly elected and qualified;

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5.

to approve the Second Sight 2022 Omnibus Plan (the “Second Sight 2022 Plan”);

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6.

to ratify the selection by the audit committee of the board of directors the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;

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7.

to consider and vote upon an adjournment of the Second Sight annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposals; and

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8.

to transact such other business as may properly come before the Second Sight annual meeting or any adjournment or postponement thereof.

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Q:   What shares will be entitled to vote at the 2022 Annual Meeting?

A:

Our voting securities consist of common stock, of which approximately 39,409,176 shares were outstanding on June 20, 2022, the record date (provided, that the de facto record date, due to the record date being a federal holiday, is the close of business of June 17, 2022). Holders of record of Second Sight common stock may vote on each proposal that comes before the 2022 annual meeting.

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Q:   How many votes do I have?

A:

Each share of common stock entitles you to one vote. However, in the election of directors, you are entitled to cumulate your votes if you are present at the meeting, the nominee’s(s’) name(s) have properly been placed in nomination, and you have given notice at the meeting prior to the actual voting of your intention to vote your shares cumulatively. Cumulative voting allows you to give one nominee as many votes as are equal to the number of directors to be elected, multiplied by the number of shares you own, or to distribute your votes in the same fashion between two or more nominees. Our receipt of an executed proxy grants the named proxies discretionary authority to also cumulate votes.

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Q:   What is the merger?

A:

Second Sight Medical Products, Inc. (“Second Sight” or the “Company”) and Nano Precision Medical, Inc. (“NPM”) have entered into an Agreement and Plan of Merger, dated as of February 4, 2022 (the “Merger Agreement”). The Merger Agreement contains the terms and conditions of the proposed business combination of Second Sight and NPM. Under the Merger Agreement, NPM Acquisition Corp., a wholly owned subsidiary of Second Sight (“Merger Sub”), will merge with and into NPM, with NPM surviving as a wholly owned subsidiary of Second Sight. This transaction is referred to as the “Merger.”

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At the effective time of the merger (the “Effective Time”), the following securities of each NPM securityholder will be converted into the right to receive the Pro Rata Portion of the Merger Shares, subject to the adjustment to account for the Second Sight Reverse Stock Split, provided, however, that no fractional shares of the Company will be issued as a result of the Merger: (x) the aggregate number of issued and outstanding shares of NPM common stock prior to the Effective Time; (y) the aggregate number of shares of NPM common stock issuable upon the exercise of all NPM stock options outstanding as of immediately prior to the Effective Time; and (z) the aggregate number of shares of NPM common stock issuable upon exercise of NPM warrants outstanding as of immediately prior to the effective time that are converted into the right to acquire securities of Second Sight in accordance with their terms and subject to the assumptions under the Merger Agreement, provided that each NPM stock option that is outstanding shall be cancelled and Second Sight will assume and/or issue in exchange a Second Sight’s replacement stock option, under its then effective Equity incentive plan(s). It is anticipated that outstanding NPM warrants will have been “net” exercised prior to the closing in exchange for shares of NPM common stock in accordance with their terms and shall no longer be outstanding and shall automatically be cancelled, extinguished, and retired and shall cease to exist, provided, however, that in the event that any such NPM warrants are not so exercised, to the extent that by their terms they do not continue to represent the right to acquire securities of the Company on comparable terms to those of NPM warrants, then the parties of the Merger Agreement shall negotiate in good faith and use commercially reasonable efforts to mutually agree as promptly as practicable to such amendments the Merger Agreement as are necessary to reflect an assumption, exchange or similar accommodation for such NPM warrants, provided that such assumption, exchange or similar accommodation shall be reasonably satisfactory to each party of the Merger Agreement.

As a result of the merger, current holders of NPM’s common stock and options and warrants to purchase NPM’s common stock are expected to own, or hold rights to acquire, in the aggregate 134,349,464 shares of Second Sight common stock, representing approximately 77.32% of the of the common stock of Second Sight, which for these purposes is defined as the outstanding common stock of Second Sight (including the shares of common stock issued in the merger), plus the number of shares of Second Sight common stock issuable on conversion of options and warrants of Second Sight that were in the in-the-money as of the date of the Merger Agreement, plus the number of shares that would issue from a net exercise of all options and warrants of NPM based on a $21.90 NPM share price

 

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(the “Base Amount Common Stock of Second Sight”), with Second Sight’s current shareholders, option holders and warrant holders owning, or holding rights to acquire, approximately 22.68% of the Base Amount Common Stock of Second Sight, and Second Sight’s current shareholders, option holders and warrant holders are expected to own, or hold rights to acquire, in the aggregate approximately 22.68% of the Base Amount Common Stock of Second Sight, in each case, following the Effective Time of the merger. After the completion of the merger, Second Sight will change its corporate name from “Second Sight Medical Products, Inc.” to “Vivani Medical, Inc.” ​(or to such other name as Second Sight and NPM may agree) as contemplated by the Merger Agreement (the “Second Sight Name Change”).

Q:   What will happen to Second Sight if, for any reason, the merger does not close?

A:

If, for any reason, the merger does not close, the Second Sight Board may elect to, among other things, attempt to complete another strategic transaction like the merger, attempt to sell or otherwise dispose of the various assets of Second Sight, resume its research and development activities and continue to operate the business of Second Sight or pursue alternative strategical routes, as determined by the Second Sight Board.

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Q:   Why are the two companies proposing to merge?

A:

NPM and Second Sight believe that the merger will result in a combined company focused on developing innovative drug and medical device implants that treat chronic diseases with high unmet medical needs. For a discussion of Second Sight’s and NPM’s reasons for the merger, please see the section entitled “The Merger — Second Sight Reasons for the Merger” and “The Merger — NPM Reasons for the Merger” in this proxy statement/prospectus.

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Q:   Why am I receiving this proxy statement/prospectus?

A:

You are receiving this proxy statement/prospectus because you have been identified as a shareholder of Second Sight as of the applicable record date. If you are a shareholder of Second Sight, you are entitled to vote at Second Sight’s annual shareholder meeting (referred to herein as the “Second Sight annual meeting”) to (i) approve the proposals typical for the Second Sight annual meetings including the proposal to elect the six directors from the named nominees and (ii) approve the Merger Agreement and the transactions contemplated thereby, including the merger and the issuance of shares of Second Sight’s common stock pursuant to the Merger Agreement. This document serves as:

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a proxy statement of Second Sight used to solicit proxies for the Second Sight annual meeting; and

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a prospectus of Second Sight used to offer shares of Second Sight common stock in exchange for shares of NPM’s common stock in the merger and issuable as a replacement of NPM’s warrants and options, as applicable.

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Q:   What is required to consummate the merger?

A:

To consummate the merger, Second Sight’s shareholders must approve the merger, the issuance of Second Sight common stock pursuant to the Merger Agreement, the amendment to the Restated Articles of Incorporation, as amended, to effect the change of name of Second Sight, the Second Sight 2022 Omnibus Plan, the adoption and approval of each other proposal that either the SEC or Nasdaq indicates is necessary in its comments to the Registration Statement or in correspondence related thereto, the adoption and approval of each other proposal reasonably agreed to by Second Sight and NPM as necessary or appropriate in connection with the consummation and NPM’s shareholders must adopt the Merger Agreement, and thereby, approve the merger and the other transactions contemplated therein. Each of Proposals Nos. 1, 3, and 5 are conditions to the Merger and the Merger cannot be consummated without the approval of each of Proposals Nos. 1, 3, and 5, subject to the right of NPM to waive the approval of Proposals Nos. 3 and 5 as conditions to the Merger.

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In addition to the requirement of obtaining the shareholder approvals described above, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. One of these conditions is that Second Sight is required to have net cash of at least $63 million (pursuant to a waiver

 

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granted by NPM to Second Sight on June 15, 2022), less the amount of any advance made by Second Sight to NPM for working capital, at the closing of the merger. For example, if the merger is scheduled to close on August 1, 2022 and Second Sight net cash falls below $63 million, NPM could decide not to consummate the transaction and the Merger Agreement could be terminated. As of the date of this proxy statement/prospectus, Second Sight expects its net cash to be above the net cash required by the Merger Agreement at closing. For a more complete description of the closing conditions under the Merger Agreement, we urge you to read the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” in this proxy statement/prospectus.

Q:   What will NPM’s shareholders, warrant holders and option holders receive in the merger?

A:

As a result of the merger, NPM’s shareholders, warrant holders and option holders will become entitled to receive shares, or rights to acquire shares, of Second Sight’s common stock equal to, in the aggregate, approximately 77.32% of the Base Amount Common Stock of Second Sight.

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For a more complete description of what NPM’s shareholders, warrant holders and option holders will receive in the merger, please see the section entitled “The Merger Agreement — Merger Consideration and Exchange Ratio” in this proxy statement/prospectus.

Q:

Who are the director nominees of Second Sight?

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A:

The Second Sight Board has unanimously nominated six (6) directors all of whom are presently members of Second Sight Board: Gregg Williams, Dean Baker, Alexandra Larson, Jonathan Will McGuire, Aaron Mendelsohn, and Matthew Pfeffer.

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*

Audit Committee Financial Expert

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Q:   Who will be the directors of Second Sight following the merger?

A:

Following the merger, the Second Sight Board will consist of a total of five directors. Pursuant to the terms of the Merger Agreement, it is anticipated that following the closing of the merger, the Second Sight Board will be constituted as follows:

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Q:   As a shareholder of Second Sight, how does the Second Sight Board recommend that I vote?

A:

After careful consideration, the Second Sight Board, based on the opinion of the Special Committee regarding Proposals 1, 3 and 5, recommends that Second Sight shareholders vote:

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“FOR” Proposal No. 1 to approve the Merger Agreement and thereby approve the transactions contemplated thereby, including the merger, the issuance of the Merger Shares and the change of control resulting from the merger;

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“FOR” Proposal No. 2 to approve the amendment to the Restated Articles of Incorporation, as amended, of Second Sight to effect the Second Sight Reverse Stock Split;

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“FOR” Proposal No. 3 to approve an amendment to the Second Sight Restated Articles of Incorporation, as amended, to effect the change of name of Second Sight to “Vivani Medical, Inc.”;

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“FOR” each of the six nominees named in Proposal No. 4 of the accompanying proxy statement to hold office for the ensuing year and until their successors are duly elected and qualified;

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“FOR” Proposal No. 5 to approve the Second Sight 2022 Plan;

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“FOR” Proposal No. 6 to ratify the selection by the audit committee of the board of directors the appointment of BPM LLP as Second Sight’s independent registered public accounting firm for the fiscal year ending December 31, 2022; and

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“FOR” Proposal No. 7 to consider and vote upon an adjournment of the Second Sight annual meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposals.

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Q:   What risks should I consider in deciding whether to vote in favor of the merger?

A:

You should carefully review the section of this proxy statement/prospectus entitled “Risk Factors,” which sets forth certain risks and uncertainties related to the merger, risks and uncertainties to which the combined company’s business will be subject and risks and uncertainties to which each of Second Sight and NPM, as an independent company, is subject.

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Q:   When do you expect the merger to be consummated?

A:

We anticipate that the merger will occur in the third quarter of 2022, soon after the Second Sight annual meeting to be held on July 27, 2022, but we cannot predict the exact timing. For more information, please see the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” in this proxy statement/prospectus.

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Q:   What do I need to do now?

A:

Second Sight urges you to read this proxy statement/prospectus carefully, including its annexes, and to consider each of the proposals submitted to the Second Sight annual meeting and how the merger affects you.

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If you are a shareholder of Second Sight as of the Record Date, you may provide your proxy instructions in one of two different ways. First, you can mail your signed proxy card in the enclosed return envelope. You may also provide your proxy instructions via phone or via the Internet by following the instructions on your proxy card or voting instruction form. Please provide your proxy instructions only once, unless you are revoking a previously delivered proxy instruction, and as soon as possible so that your shares can be voted at the Second Sight annual meeting.

Q:   What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable?

A:

For shares held in “street name,” if you do not provide voting instructions to your broker, this will result in a “broker non-vote” for the non-routine proposals, which in some instances, may have the same effect as a vote against such proposals. Failure to return your proxy card or otherwise provide proxy instructions and the resulting “broker non-vote” will have the same effect as an “AGAINST” vote on

​

 

5

 

Proposal No. 1. It will have no effect on other proposals. Please see the answer to “Q: If my Second Sight shares are held in “street name” by my broker, will my broker vote my shares for me?” below for further discussion regarding broker discretion to vote on the proposals and “broker non-votes.” Please carefully review the table below.

 

6

 

Q:   If my Second Sight shares are held in “street name” by my broker, will my broker vote my shares for me?

A:

If you are a beneficial owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on the matter with respect to those shares. This is generally referred to as a “broker non-vote.” Second Sight believes that only Proposals Nos. 2, 3, 6, and 7 constitute routine matters. The “routine” treatment of these proposals does not affect the seriousness with which we treat it. Second Sight does not believe that any of the other proposals involve matters that will be considered routine under the relevant securities exchange rules. Second Sight encourages you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided by such organization.

​

Q:   May I vote at the annual meeting of shareholders of Second Sight?

A:

Yes. Although the format of virtual annual meeting allows only virtual participation, if you were a shareholder of record as of the close of business on the record date, you may participate in the virtual annual meeting and vote your shares during the Second Sight annual meeting instead of voting in advance by Internet or telephone or returning your signed proxy card (if you request a paper copy). However, we urge you to vote in advance even if you are planning to participate in the annual meeting.

​

Q:   When and where is the annual meeting of Second Sight shareholders?

A:

The Second Sight annual meeting will be held virtually at 10:00 a.m., Pacific time, on July 27, 2022.

​

To attend the annual meeting, you must register prior to the registration deadline of July 26, 2022, at 5:00 p.m. Eastern time. You can register to attend the meeting by logging into the www.proxydocs.com/​EYES website and entering the control number listed on the proxy card you received. You will then receive an e-mail confirming that you registered and providing additional details. In addition, you will receive an e-mail one hour prior to the start time for the meeting with a unique URL link that will allow you to join the meeting. To attend the annual meeting, you will need the control number included on your proxy card if you are a shareholder of record or included with your voting instruction form provided by your bank, broker or other nominee if you hold your shares of Second Sight common stock in street name through an account with an intermediary. You may log into the annual meeting website at www.proxydocs.com/EYES and enter your control number beginning 15 minutes before the commencement of the annual meeting. Instructions on how to attend and participate online at the annual meeting, including how to ask questions and vote, are posted at www.proxydocs.com/EYES.

If there are technical difficulties during the annual meeting (e.g., a temporary or prolonged power outage), the meeting may be promptly reconvened (if the technical difficulty is temporary) or may be adjourned and reconvened on a later day (if the technical difficulty is more prolonged). In any situation,

 

7

 

Second Sight will promptly notify shareholders via a notification on www.proxydocs.com/EYES. If a Second Sight shareholder encounters technical difficulties accessing the annual meeting or asking questions during the annual meeting, a support line will be available on the login page of the annual meeting website. Instructions on how to attend and participate online at the annual meeting, including how to demonstrate proof of stock ownership, ask questions and vote, are posted at www.proxydocs.com/EYES.

Q:   How do I vote and what are the voting deadlines?

A:

Shareholders of record can vote by proxy or by attending the annual meeting virtually by visiting the link generated by visiting the following website: www.proxydocs.com/EYES, where votes can be submitted via live webcast. If you vote by proxy, you can vote by Internet, telephone, or by mail as described below.

​

•

You may vote via the Internet or by telephone.   To vote via the Internet or by telephone, follow the instructions provided in the proxy card that accompanies this proxy statement. If you vote via the Internet or by telephone, you do not need to return a proxy card by mail. Internet and telephone voting are available 24 hours a day. Votes submitted through the Internet or by telephone must be received prior to the time announced during the annual meeting on July 27, 2022. Alternatively, you may request a printed proxy card by following the instructions provided in the notice.

​

•

You may vote by mail.   If you would like to vote by mail, you need to complete, date and sign the proxy card that accompanies this proxy statement and promptly mail it in the enclosed postage-paid envelope so that it is received no later than July 26, 2022. You do not need to put a stamp on the enclosed envelope if you mail it from within the United States. The persons named on the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter to be voted on at the annual meeting, the persons named on the proxy card will vote the shares you own in accordance with the recommendations of Second Sight Board.

​

•

You may vote at the Annual Meeting.   If you choose to vote at the annual meeting virtually, you will need the 16-digit control number included on your notice or on your proxy card. If you are the beneficial owner of your shares, your 16-digit control number may be included in the voting instructions form that accompanied your proxy materials. If your nominee did not provide you with a 16-digit control number in the voting instructions form that accompanied your proxy materials, you may be able to log onto the website of your nominee prior to the start of the annual meeting, on which you will need to select the stockholder communications mailbox link through to the annual meeting, which will automatically populate your 16-digit control number in the virtual annual meeting interface. The method you use to vote will not limit your right to vote at the virtual annual meeting. All shares that have been properly voted and not revoked will be voted at the annual meeting.

​

Q:

What are the material U.S. federal income tax consequences of the merger to U.S. Holders of NPM common stock?

​

A:

It is the intent of Second Sight that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Subject to the tax opinion representations and assumptions, in the opinion of Venable LLP, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Accordingly, a U.S. holder of NPM’s common stock will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of NPM common stock for shares of Second Sight common stock in the merger. If any of the tax opinion representations and assumptions is incorrect, incomplete or inaccurate or is violated, the accuracy of the opinions described above may be affected and the U.S. federal income tax consequences of the merger could differ from those described in this proxy statement/prospectus.

​

Please review the information in the section entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” for a more complete description of the material U.S. federal income tax consequences of the merger to U.S. Holders of NPM common stock. The tax consequences to you of the merger will depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you of the merger.

 

8

 

Q:

What are the material U.S. federal income tax consequences of the Second Sight Reverse Stock Split to Second Sight U.S. Holders?

​

A:

Second Sight U.S. Holder generally should not recognize gain or loss upon the Second Sight Reverse Stock Split, except to the extent a Second Sight U.S. Holder receives cash in lieu of a fractional share of Second Sight common stock. Please review the information in the section entitled “Proposal No. 2: Approval of an Amendment to the Restated Articles of Incorporation, as amended, of Second Sight Effecting the Second Sight Reverse Stock Split — Material U.S. Federal Income Tax Consequences of the Second Sight Reverse Stock Split” for a more complete description of the material U.S. federal income tax consequences of the Second Sight Reverse Stock Split to Second Sight U.S. Holders. The tax consequences to you related to the Second Sight Reverse Stock Split will depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you.

​

Q:   May I change my vote after I have submitted a proxy or provided proxy instructions?

A:

Second Sight’s shareholders of record, may change their vote at any time before their proxy is voted at the Second Sight annual meeting in one of the following ways:

​

(i)

by entering a new vote via the Internet or telephone;

​

(ii)

by signing and returning a new proxy card with a later date;

​

(iii)

by delivering a written revocation to Second Sight secretary at the address listed in this proxy statement/prospectus; or

​

(iv)

by attending the Second Sight annual meeting and voting via live webcast.

​

Q:   Who is paying for this proxy solicitation?

A:

The board of directors is soliciting proxies for use at the annual meeting. Second Sight will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing, and distribution of the proxy materials. Copies of solicitation materials will also be made available upon request to brokers and other nominees to forward to the beneficial owners of the shares held of record by the brokers or other nominees. Second Sight will reimburse brokers or other nominees for reasonable expenses that they incur in sending these proxy materials to beneficial owners.

​

This solicitation of proxies may be supplemented by solicitation by telephone, electronic communication, or other means by our directors, officers, employees, or agents. No additional compensation will be paid to directors or executive officers of Second Sight for any such services, although Second Sight may reimburse such individuals for their reasonable out-of-pocket expenses in connection with such solicitation.

Second Sight has engaged Morrow Sodali LLC to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $200,000 in total.

Q:   Who can help answer my questions?

A:

If you are a shareholder of Second Sight and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the annual meeting or the merger, including the procedures for voting your shares, you should contact:

​

If you have any questions or need assistance with voting your shares, please call Morrow Sodali LLC, toll-free at (800) 662-5200, or contact them via e-mail at EYES@info.morrowsodali.com or in writing to 333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902.

 

9

 

10

 

​

11

 

​

12

 

13

 

14

 

Name	​	​	Title	​
Adam Mendelsohn	​	​	Chief Executive Officer	​
Brigid A. Makes	​	​	Chief Financial Officer	​
Truc Le	​	​	Chief Operating Officer	​
Donald Dwyer	​	​	Chief Business Officer	​
Lisa Porter	​	​	Chief Medical Officer	​

​

15

 

​

16

 

17

 

18

 

​

​

​

Quarter end March 31,

​

​

Year ended December 31,

​

(in thousands, except share data)

​

​

2022

​

​

2021

​

​

2021

​

​

2020

​

Cost of sales (recovery)

​

​

​

$

—

​

​

​

​

$

—

​

​

​

​

$

(130)

​

​

​

​

$

(500)

​

​

Research, development, clinical and regulatory, net of grants

​

​

​

​

750

​

​

​

​

​

371

​

​

​

​

​

2,370

​

​

​

​

​

4,836

​

​

General and administrative expenses

​

​

​

​

1,466

​

​

​

​

​

2,472

​

​

​

​

​

6,315

​

​

​

​

​

5,943

​

​

Other expenses

​

​

​

​

—

​

​

​

​

​

—

​

​

​

​

​

378

​

​

​

​

​

4,617

​

​

Interest (income)

​

​

​

​

—

​

​

​

​

​

—

​

​

​

​

​

(12)

​

​

​

​

​

(16)

​

​

Net loss

​

​

​

​

(2,216)

​

​

​

​

​

(2,843)

​

​

​

​

​

(8,921)

​

​

​

​

​

(14,880)

​

​

Net loss per share

​

​

​

$

(0.06)

​

​

​

​

$

(0.12)

​

​

​

​

$

(0.27)

​

​

​

​

$

(0.72)

​

​

Weighted average shares outstanding – basic and diluted

​

​

​

​

39,409,000

​

​

​

​

​

23,537,000

​

​

​

​

​

32,817,000

​

​

​

​

​

20,575,000

​

​

​

​

​

As of March 31, 2022

​

​

As of December 31,

​

(in thousands)

​

​

2021

​

​

2020

​

Cash and cash equivalents

​

​

​

$

59,599

​

​

​

​

$

69,593

​

​

​

​

$

3,177

​

​

Total assets

​

​

​

​

68,538

​

​

​

​

​

70,879

​

​

​

​

​

4,460

​

​

Current liabilities

​

​

​

​

2,385

​

​

​

​

​

2,462

​

​

​

​

​

5,132

​

​

Total liabilities

​

​

​

​

—

​

​

​

​

​

2,514

​

​

​

​

​

5,132

​

​

Total stockholders equity (deficit)

​

​

​

​

66,153

​

​

​

​

​

68,365

​

​

​

​

​

(672)

​

​

Total liabilities and stockholders equity

​

​

​

​

68,538

​

​

​

​

​

70,879

​

​

​

​

​

4,460

​

​

19

 

​

​

​

Quarter end March 31,

​

​

Year ended December 31,

​

(in thousands, except share data)

​

​

2022

​

​

2021

​

​

2021

​

​

2020

​

Research and development expenses

​

​

​

$

2,679

​

​

​

​

$

2,406

​

​

​

​

$

11,002

​

​

​

​

$

6,865

​

​

General and administrative expenses

​

​

​

​

1,228

​

​

​

​

​

569

​

​

​

​

​

2,321

​

​

​

​

​

2,378

​

​

Other (income) expenses

​

​

​

​

17

​

​

​

​

​

(12)

​

​

​

​

​

(550)

​

​

​

​

​

36

​

​

Net loss

​

​

​

​

3,924

​

​

​

​

​

(2,987)

​

​

​

​

​

(12,773)

​

​

​

​

​

(9,279)

​

​

Net loss per share

​

​

​

$

(0.32)

​

​

​

​

$

(0.28)

​

​

​

​

$

(1.17)

​

​

​

​

$

(0.94)

​

​

Weighted average shares outstanding – basic and diluted

​

​

​

​

12,199,588

​

​

​

​

​

10,714,677

​

​

​

​

​

10,962,266

​

​

​

​

​

9,896,545

​

​

​

​

​

As of March 31, 2022

​

​

As of December 31,

​

(in thousands)

​

​

2021

​

​

2020

​

Cash and cash equivalents

​

​

​

$

6,973

​

​

​

​

$

2,178

​

​

​

​

$

2,081

​

​

Total assets

​

​

​

​

10,040

​

​

​

​

​

5,453

​

​

​

​

​

5,217

​

​

Current liabilities

​

​

​

​

2,541

​

​

​

​

​

2,086

​

​

​

​

​

2,185

​

​

Total liabilities

​

​

​

​

11,158

​

​

​

​

​

2,988

​

​

​

​

​

3,267

​

​

Total stockholders equity (deficit)

​

​

​

​

(1,118)

​

​

​

​

​

2,465

​

​

​

​

​

1,950

​

​

Total liabilities and stockholders equity

​

​

​

​

10,040

​

​

​

​

​

5,453

​

​

​

​

​

5,217

​

​

20

 

(in thousands, except share data)

​

​

Quarter end March 31, 2022

​

​

Year ended December 31, 2021

​

Cost of sales (recovery of cost)

​

​

​

$

—

​

​

​

​

$

(130)

​

​

Research, development, clinical and regulatory expenses

​

​

​

​

3,421

​

​

​

​

​

13,693

​

​

General and administrative expenses

​

​

​

​

2,689

​

​

​

​

​

10,338

​

​

Net loss from operations

​

​

​

​

(6,110)

​

​

​

​

​

(23,091)

​

​

Net operating loss per share

​

​

​

$

(0.04)

​

​

​

​

$

(0.18)

​

​

Weighted average shares outstanding – basic and diluted

​

​

​

​

150,338,222

​

​

​

​

​

132,495,261

​

​

(in thousands)	​	​	As of March 31, 2022				​
Cash and cash equivalents	​	​	​	$	65,297	​	​
Total assets	​	​	​	​	69,303	​	​
Current liabilities	​	​	​	​	4,512	​	​
Total liabilities	​	​	​	​	5,129	​	​
Total stockholders equity	​	​	​	​	64,174	​	​
Total liabilities and stockholders equity	​	​	​	​	69,303	​	​

21

 

​	​	​	(unaudited)				​
Second Sight Historical Per Share Data:	​	​	​	​	​	​	​
Net loss per share, basic and diluted, quarter ended March 31, 2022	​	​	​	$	(0.06)	​	​
Net loss per share, basic and diluted, year ended December 31, 2021	​	​	​	$	(0.27)	​	​
Book value per share as of March 31, 2022	​	​	​	$	1.68	​	​
NPM Historical Per Share Data:	​	​	​	​	​	​	​
Net loss per share, basic and diluted, quarter ended March 31, 2022	​	​	​	$	(0.32)	​	​
Net loss per share, basic and diluted, year ended December 31, 2021	​	​	​	$	(1.17)	​	​
Book value per share as of March 31, 2022	​	​	​	$	(0.09)	​	​
Combined Company Per Share Data on a Pro forma Basis:	​	​	​	​	​	​	​
Net operating loss per share, basic and diluted, quarter ended March 31, 2022	​	​	​	$	(0.04)	​	​
Net operating loss per share, basic and diluted, year ended December 31, 2021	​	​	​	$	(0.18)	​	​
Book value per share as of March 31, 2022	​	​	​	$	0.43	​	​

22

 

RISK FACTORS

The combined company will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. You should read and consider the risks associated with each of the businesses of Second Sight and NPM. For Second Sight, these risks can be found in its most recent Annual Report on Form 10-K (Annex F to this proxy statement/prospectus), as updated by subsequent Quarterly Reports on Form 10-Q (Annex I to this proxy statement/prospectus), all of which risk factors are incorporated herein by reference. You should also read and consider the other information in this proxy statement/​prospectus and the other documents incorporated by reference into this proxy statement/prospectus. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. Please see the section entitled “Where You Can Find More Information” beginning on page 260 of this proxy statement/prospectus.

Risks Related to the Merger

The Pro Rata Portion of the Merger Shares is not adjustable based on the market price of Second Sight common stock, so the Merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

The Merger Agreement has set the exchange ratio formula for the NPM common stock, and the exchange ratio is based on the fully-converted outstanding common stock of NPM and the fully-converted outstanding common stock of Second Sight, after taking into account each company’s outstanding options and warrants, irrespective of the exercise prices of such options and warrants, and Second Sight’s and NPM’s net cash balances, in each case immediately prior to the closing of the merger as described under the heading “The Merger — Merger Consideration.” Any changes in the market price of Second Sight common stock before the completion of the merger will not affect the number of shares of Second Sight common stock issuable to NPM’s shareholders pursuant to the Merger Agreement. Therefore, if before the completion of the merger the market price of Second Sight common stock declines from the market price on the date of the Merger Agreement, then NPM’s shareholders could receive merger consideration with substantially lower value than the value of such Merger consideration on the date of the Merger Agreement. Similarly, if before the completion of the merger the market price of Second Sight common stock increases from the market price of Second Sight common stock on the date of the Merger Agreement, then NPM’s shareholders could receive merger consideration with substantially greater value than the value of such merger consideration on the date of the Merger Agreement. The Merger Agreement does not include a price-based termination right. Because the exchange ratio does not adjust as a result of changes in the market price of Second Sight common stock, for each one percentage point change in the market price of Second Sight common stock, there is a corresponding one percentage point rise or decline, respectively, in the value of the total merger consideration payable to NPM’s shareholders pursuant to the Merger Agreement.

Failure to complete the Merger may result in Second Sight or NPM paying a termination fee or expenses to the other party and could significantly harm the market price of Second Sight common stock and negatively affect the future business and operations of each company.

If the Merger is not completed and the Merger Agreement is terminated under certain circumstances, Second Sight may be required to pay NPM a termination fee of $5,000,000 or $1,000,000. If the Merger is not completed and the Merger Agreement is terminated under certain circumstances, NPM may be required to pay Second Sight a termination fee of $5,000,000. Even if a termination fee is not payable or transaction expenses are not reimbursable in connection with a termination of the Merger Agreement, each of Second Sight and NPM will have incurred significant fees and expenses, such as legal and accounting fees, which must be paid whether or not the Merger is completed. Further, if the Merger is not completed, it could significantly harm the market price of Second Sight common stock.

In addition, if the Merger Agreement is terminated and the Board of Second Sight or NPM determines to seek another business combination, there can be no assurance that either Second Sight or NPM will be able to find a partner and close an alternative transaction on terms that are as favorable or more favorable than the terms set forth in the Merger Agreement.

 

23

 

The Merger may be completed even though certain events occur prior to the closing that materially and adversely affect Second Sight or NPM.

The Merger Agreement provides that either Second Sight or NPM can refuse to complete the Merger if there is a material adverse change affecting the other party between February 4, 2022, the date of the Merger Agreement, and the closing of the Merger. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Second Sight or NPM, including:

•

general economic, political conditions or the securities markets in general (whether as a result of acts of terrorism, war (whether or not declared), armed conflicts or otherwise) to the extent they do not disproportionately affect Second Sight or NPM, as applicable;

​

•

general changes in or affecting the industries in which Second Sight or NPM operate, to the extent they do not disproportionately affect Second Sight, Merger Sub, or NPM, as applicable;

​

•

any effect resulting from the announcement or pendency of the Merger or any related transactions;

​

•

any effect resulting from the taking of specific actions, by either Second Sight or NPM required to comply with the terms of the Merger Agreement;

​

•

any failure, in and of itself, to achieve any budgets, projections, forecasts, estimates, plans or predictions, or the loss of any business;

​

•

any natural disaster natural disasters, pandemics, epidemics, disease outbreaks (including the Covid-19 virus) or other health crises or public health events, weather conditions, explosions or fires, or other force majeure events or acts of God; and

​

•

any changes in GAAP or other accounting requirements or principles (or the interpretation thereof) or changes in laws issued or made by any governmental authority, to the extent they do not disproportionately affect Second Sight, Merger Sub, or NPM, as applicable

​

If adverse changes occur and Second Sight and NPM still complete the Merger, the market price of the combined company’s common stock may suffer. This in turn may reduce the value of the Merger to the shareholders of Second Sight, NPM, or both.

Certain of Second Sight’s directors have material interests in NPM. There is no assurance that the efforts of Second Sight Board, and of the special committee of Second Sight Board, to evaluate the fairness and effects of the proposed Merger were sufficient.

Three of Second Sight’s directors, Gregg Williams, Dean Baker, and Aaron Mendelsohn are also directors of NPM, and Gregg Williams and Aaron Mendelsohn have substantial investments and financial interests in NPM. Additionally, NPM was founded by Adam Mendelsohn, the son of Aaron Mendelsohn, a member of the Second Sight Board. As a result, a special committee of the Board, consisting of members having no affiliation with NPM, was created for the purpose of evaluating the proposed Merger and determining whether the Merger Agreement and the proposed Merger are in the best interests of Second Sight. Following multiple consultations with financial and legal advisers, the special committee issued its recommendation for the Board to approve the proposed Merger on the terms of the Merger Agreement and the concurrently entered SAFE agreement. Notwithstanding the foregoing, there can be no assurance that the efforts of the special committee in connection with the proposed Merger were sufficient, nor can there be an assurance that the special committee was aware of and considered all the relevant facts and circumstances surrounding the proposed Merger. The opinion of the special committee was based on then-available information, as of the date of each such opinion and does not reflect any subsequent events. Therefore, there can be no assurance that the terms of the proposed Merger are fair and in the best interest of Second Sight despite the opinion of the special committee.

The market price of the common stock of the combined company following the Merger may decline as a result of the Merger.

The market price of combined company’s common stock may decline as a result of the Merger for a number of reasons including if:

•

investors react negatively to the prospects of the combined company’s product candidates, business, and financial condition following the Merger;

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•

the effect of the Merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or

​

•

the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts.

​

Second Sight and NPM shareholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the merger, Second Sight’s and NPM’s shareholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the Merger.

During the pendency of the Merger, Second Sight and NPM may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect their respective businesses.

Covenants in the Merger Agreement impede the ability of Second Sight and NPM to make acquisitions, subject to certain exceptions relating to fiduciary duties, as set forth in the Merger Agreement, or to complete other transactions that are not in the ordinary course of business pending completion of the Merger. As a result, if the Merger is not completed, the parties may be at a disadvantage to their competitors during such period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging, or entering certain extraordinary transactions, such as a merger, sale of assets, or other business combination outside the ordinary course of business with any third party, subject to certain exceptions relating to fiduciary duties, as set forth in the Merger Agreement. Any such transactions could be more favorable to such party’s shareholders that the transactions contemplated by the Merger Agreement.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The terms of the Merger Agreement prohibit each of Second Sight and NPM from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that failure to cooperate with the proponent of the proposal would be reasonably likely to be inconsistent with the board of directors’ fiduciary duties.

Because the lack of a public market for NPM common stock makes it difficult to evaluate the value of NPM common stock, the shareholders of NPM may receive shares of Second Sight common stock in the Merger that have a value that is less than, or greater than, the fair market value of NPM common stock.

The outstanding common stock of NPM is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of NPM. Because the percentage of Second Sight common stock to be issued to NPM’s shareholders was determined based on negotiations between the parties, it is possible that the value of Second Sight common stock to be received by NPM’s shareholders will be less than the fair market value of NPM or Second Sight may pay more than the aggregate fair market value for NPM.

If the conditions to the merger are not satisfied or waived, the merger will not occur.

Even if the merger is approved by the shareholders of Second Sight and NPM, other conditions must be satisfied or waived to complete the merger, including the condition that the aggregate amount of cash, cash equivalents, and marketable securities of the Second Sight being not less than $63 million less the amount of any advances made to NPM for working capital, in order to consummate the merger. These conditions

 

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are set forth in the Merger Agreement and described in the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” in this proxy statement/prospectus. Second Sight and NPM cannot assure you that all of the conditions will be satisfied or waived. Certain of the closing conditions are incapable of being waived. If the conditions are not satisfied or waived, the merger will not occur or will be delayed, and Second Sight and NPM each may lose some or all of the intended benefits of the merger.

The merger may fail to qualify as a “reorganization” for U.S. federal income tax purposes, resulting in recognition of taxable gain or loss by holders of NPM common stock.

Second Sight and NPM intend for the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, as described in the section entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus. In the event that the merger does not qualify as a “reorganization,” the merger would generally result in taxable gain or loss for each U.S. Holder (as defined hereafter) of NPM common stock, with the amount of such gain or loss determined by the amount that each NPM shareholder’s adjusted tax basis in the NPM common stock surrendered is less or more than the fair market value of the Second Sight common stock. Each holder of NPM common stock is urged to consult with his, her, or its own tax advisor with respect to the tax consequences of the merger.

Business development activity involves numerous risks, including the risks that Second Sight may be unable to integrate an acquired business successfully and that Second Sight may assume liabilities that could adversely affect it.

In order to transform its business, pursue strategic opportunities, and enhance shareholder value Second Sight entered into the Merger Agreement. Second Sight cannot be sure the merger will result in a successful acquisition, development or launch of products that will prove to be commercially successful or will improve the long-term viability of Second Sight’s business. Acquisitions or licenses could require Second Sight to raise significant capital and potentially incur significant dilution through the issuance of new shares of common stock. These strategic transactions involve many risks, including, but not limited to, the following:

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difficulties in achieving identified financial revenue synergies, growth opportunities, operating synergies, and cost savings;

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•

difficulties in assimilating the personnel, operations and products of NPM, and the potential loss of key employees and advisers;

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•

difficulties in consolidating intellectual properties portfolios and corporate infrastructures of the respective parties;

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•

Second Sight’s inability to achieve expected revenues and gross margins for any products Second Sight may acquire;

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•

the diversion of management’s attention from other business concerns; and

​

•

difficulties in reorganizing, winding-down, or liquidating operations if not successful.

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Business development activities require significant transaction costs, including substantial fees for investment bankers, attorneys, and accountants. Any acquisition could result in Second Sight’s assumption of material unknown and/or unexpected liabilities. Second Sight also cannot provide assurance that it will achieve any cost savings or synergies relating to recent or future acquisitions. Additionally, in any acquisition agreement, the negotiated representations, warranties, and agreements of the selling parties may not entirely protect Second Sight, and liabilities resulting from any breaches could exceed negotiated indemnity limitations. These factors could impair Second Sight’s growth and ability to compete, divert resources from other potentially more profitable areas, or otherwise cause a material adverse effect on its business, financial position, and results of operations.

The financial statements of acquired companies, or those that may be acquired in the future, are prepared by management of such companies, and are not independently verified by Second Sight’s management. In addition, any pro forma financial statements prepared by Second Sight to give effect to

 

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such acquisitions may not accurately reflect the results of operations of such companies that would have been achieved had the acquisition of such entities been completed at the beginning of the applicable periods.

If Second Sight does not successfully consummate a strategic transaction, its board of directors may decide to pursue a dissolution and liquidation of Second Sight. In such an event, the amount of cash available for distribution to Second Sight shareholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the process to identify a strategic transaction will result in a successfully consummated transaction. If no transaction is completed, the Second Sight Board may decide to pursue a dissolution and liquidation of the company. In such an event, the amount of cash available for distribution to Second Sight shareholders will depend heavily on the timing of such decision and, ultimately, such liquidation since the amount of cash available for distribution continues to decrease as Second Sight funds its operations while it evaluates its strategic alternatives. In addition, if the Second Sight board of directors was to approve and recommend, and its shareholders were to approve, a dissolution and liquidation of the company, Second Sight would be required under California corporate law to pay outstanding obligations of the Company. As a result of this requirement, a portion of Second Sight’s assets may need to be reserved pending the resolution of such obligations. In addition, Second Sight may be subject to litigation or other claims related to a dissolution and liquidation of the company. If a dissolution and liquidation were pursued, the Second Sight board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Second Sight common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of the company.

The change of name and ticker symbol of Second Sight as a part of the merger may result in detrimental consequences associated with investors and customers’ confusion.

It is expected that Second Sight will change the corporate name and ticker symbol as a result of the merger which would require Second Sight to undergo significant rebranding efforts in the eyes of investors and potential customers. It may experience a loss in goodwill associated with existing brand name, customer confusion, and a loss of business connections and will incur substantial costs in connection with rebranding and protection of its intellectual property.

Second Sight is currently a target of certain demands and may be in the future subject to individual or class action securities or derivative lawsuits in connection with the merger, which could result in substantial costs and may delay or prevent the consummation of the merger.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements in an effort to enjoin the relevant merger or seek monetary relief. Second Sight and the members of the Second Sight Board are in receipt of certain demand letters and may in the future be defendants in one or more lawsuits relating to the Merger Agreement and the merger and, even if the current demand letters and any such future lawsuits are without merit, addressing said demand letters and defending against the pertinent claims can result insubstantial costs and divert management time and resources of both Second Sight and NPM. Second Sight cannot predict the future development of events in connection with the demand letters, nor can it predict the outcome of any such potential lawsuits. Neither Second Sight, nor NPM is able to predict the amount of time and expense that would be required to resolve such litigation. An unfavorable resolution of any such litigation surrounding the merger could delay or prevent its consummation. In addition, the costs of defending the litigation, even if resolved in Second Sight’sfavor, could be substantial, and such litigation could distract both Second Sight and NPM from pursuing the consummation of the Merger and other potentially beneficial business opportunities relevant to the post-merger company’s business.

Risks Related to the Proposed Stock Split

The reverse stock split may not increase the combined company’s stock price over the long-term.

The principal purpose of the reverse stock split is to increase the per-share market price of Second Sight’s common stock above the minimum bid price requirement under the Nasdaq rules so that the listing

 

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of Second Sight and the shares of Second Sight common stock being issued in the merger on Nasdaq will be approved. It cannot be assured, however, that the reverse stock split will accomplish this objective for any meaningful period of time. While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of Second Sight’s common stock, it cannot be assured that the reverse stock split will increase the market price of its common stock by a multiple of the reverse stock split ratio mutually agreed by Second Sight and NPM, or result in any permanent or sustained increase in the market price of Second Sight’s common stock, which is dependent upon many factors, including Second Sight’s business and financial performance, general market conditions and prospects for future success. Thus, while the stock price of Second Sight might meet the listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

The reverse stock split may decrease the liquidity of the combined company’s common stock.

Although the Second Sight board of directors believes that the anticipated increase in the market price of the combined company’s common stock resulting from the proposed reverse stock split could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for the combined company’s common stock. In addition, the reverse stock split may not result in an increase in the combined company’s stock price necessary to satisfy Nasdaq’s initial listing requirements for the combined company.

The reverse stock split may lead to a decrease in the combined company’s overall market capitalization.

Should the market price of the combined company’s common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in the combined company’s overall market capitalization. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of the combined company’s common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on the combined company’s stock price due to the reduced number of shares outstanding after the reverse stock split.

Risks Related to Dependence on Second Sight’s Commercial Products

Despite promising results from the Early Feasibility Study for Orion being conducted at UCLA and Baylor School of Medicine, Second Sight currently has no commercial products or product revenue and may never become profitable.

To date, Second Sight has not generated profit from sales of its now discontinued Argus II product and will not generate revenues until it completes the development and attain the marketing approval for Orion. Second Sight has relied principally on financing from the sale of equity securities and the receipt of government and other grants to fund its operations. Second Sight expects that its future financial results will depend primarily on its success in further developing the Orion, conducting FDA approved clinical trials and obtaining clearance or approval for, launching, selling and supporting its Orion technology. To establish these operations Second Sight will need to expend significant resources on hiring additional personnel, conducting continued scientific and product research and development, engaging in further pre-clinical and clinical investigation, giving expanded attention to intellectual property development and prosecution, seeking domestic and international regulatory approvals, marketing and promotion, capital expenditures, working capital, general and administrative expenses, and fees and expenses associated with its capital raising efforts. Second Sight expects to incur costs and expenses related to consulting costs, laboratory development costs, hiring of scientists, engineers, sales representatives and other operational personnel, and the continued development of relationships with potential partners as it continues to seek regulatory clearance or approval for its products. As a pre-revenue company Second Sight continues to incur significant operating

 

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losses, and it expects to continue to incur additional losses for at least the next several years. Second Sight cannot assure you that it will generate revenue or be profitable in the future. Second Sight’s future or updated Orion products may never be cleared or approved or become commercially viable or accepted for use.

Investment in medical device technology entails material uncertainty and is highly speculative. It entails substantial upfront capital expenditures over time and significant risk that any potential product will fail to demonstrate adequate safety, efficacy, clinical utility or acceptance by physicians and blind individuals. Investors should evaluate an investment in Second Sight in light of the uncertainties encountered by developing medical technology companies in a competitive environment. There can be no assurance that its efforts will be successful or that it will ultimately be able to achieve profitability. Even if Second Sight achieves profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. Second Sight’s failure to become and remain profitable could adversely affect the market price of its common stock and could significantly impair its ability to raise capital, expand its business or continue to implement its business plan.

Second Sight’s commercial and financial success depends on its products being accepted in the market, and if not achieved, will result in its not being able to generate revenues to support its operations.

Even if Second Sight is able to obtain favorable reimbursement within the markets that it serves, commercial success of its products will depend, among other things, on their acceptance by retinal specialists, ophthalmologists, brain surgeons, general practitioners, low vision therapists and mobility experts, hospital purchasing and controlling departments, patients, and other members of the medical community. The degree of market acceptance of any of Second Sight’s product candidates will depend on factors that include:

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cost of treatment;

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pricing and availability of future alternative products;

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the extent of available third-party coverage or reimbursement;

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perceived efficacy of the Orion system relative to other future products and medical solutions; and

​

•

prevalence and severity of adverse side effects associated with treatment.

​

The activities of competitive medical device companies, or others, may limit Second Sight’s revenue from the sale of the Orion system.

Second Sight’s commercial opportunities for the Orion system may be reduced if its competitors develop or market products that are more effective, are better tolerated, receive better reimbursement terms, achieve greater acceptance by physicians, have better distribution channels, or are less costly.

Currently, to Second Sight’s knowledge, no other medical devices comparable to the Orion system have been approved by regulatory agencies, in the U.S. or Europe, to restore some functional vision in persons who have become blind due to unpreventable causes. Other visual prosthesis companies such as Pixium are developing retinal implant technologies to partially restore some vision in blind patients mainly from age related macular degeneration. Pixium’s initial RP prosthesis product was withdrawn from the market. A previous competitor, Retina Implant, has withdrawn from the market. Neither Retina Implant nor Pixium has filed for market approval with the FDA. To Second Sight’s knowledge Pixium has obtained an IDE for a feasibility study in the U.S. for its PRIMA product, which is directed toward age related macular degeneration or AMD and is conducting a pivotal trial of PRIMA in several countries in Europe. The Illinois Institute of Technology’s Intracortical Visual Prosthesis group is currently recruiting participants for a US early feasibility study of a visual cortical prosthesis and has recently implanted one subject. Neuralink has recently demonstrated a cortical implant in animal models. Vision restoration is one of Neuralink’s stated goals. These and other potentially competitive therapies, if or when developed or brought to market, may result in pricing and market access pressure even if the Orion system is otherwise viewed as a preferable therapy.

Many privately and publicly funded universities and other organizations are engaged in research and development of potentially competitive products and therapies, such as stem cell and gene therapies, some of which may target multiple indications of Second Sight’s product candidates. These organizations include

 

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pharmaceutical companies, biotechnology companies, public and private universities, hospital centers, government agencies and research organizations. Second Sight’s competitors include large and small medical device and biotechnology companies that may have significant access to capital resources, competitive product pipelines, substantial research and development staff and facilities, and substantial experience in medical device development.

Second Sight may face substantial competition in the future and may not be able to keep pace with the rapid technological changes which may result from others discovering, developing or commercializing products before or more successfully than Second Sight does.

In general, the development and commercialization of new medical devices is highly competitive and is characterized by extensive research and development and rapid technological change. Physicians and persons who may be suitable for the Orion implant likely will consider many factors including product reliability, clinical outcomes, product availability, price, and product and patient support services that Second Sight may be able to provide. Market share as it develops can shift as a result of technological innovation and other business factors. Major shifts in industry market share have occurred in connection with product problems, physician advisories and safety alerts, reflecting the importance of product quality and reliability in the medical device industry, and any quality problems with Second Sight’s processes, goods and services could harm its reputation for producing high-quality products and would erode its competitive advantage, sales and market share. Second Sight’s competitors may develop products or other novel approaches and technologies to deal with treating blindness that are more effective, safer or less costly than any that Second Sight is developing, and if those products gain market acceptance its revenue and financial results could be adversely affected.

If Second Sight fails to develop new products or enhance existing products, its leadership in the markets it serves could erode, and its business, financial condition and results of operations may be adversely affected.

Despite early positive results in Second Sight’s limited initial trials at UCLA and Baylor School of Medicine, its ongoing development efforts may never demonstrate the feasibility of its Orion technology.

Second Sight’s research and development efforts remain subject to all of the risks associated with the development of new technology. Second Sight’s Orion technology, though based on its FDA approved Argus II retinal prosthesis, is not yet fully developed. Development of the underlying technology, including the further development and refinement of Second Sight’s Orion technology, may be affected by unanticipated technical or other problems, among other development and research issues, and the possible insufficiency of funds needed in order to complete development of these products or devices. Regulatory and clinical hurdles, adverse reactions experienced in trials, or other operational or regulatory challenges also may result in delays and cause Second Sight to incur additional expenses that may increase its need for capital and result in additional losses. For example, three of the six subjects implanted in the Early Feasibility Study have been explanted by the subjects’ request. While all had been implanted at least three years, the explants represent a limit in the long-term data that can be collected in the current study. If Second Sight cannot complete, or if it experiences significant delays in developing its technology, applications or products for use by those patients who can benefit from vision restoration, particularly after incurring significant expenditures, Second Sight’s business may fail, and investors may lose the entirety of their investment.

Since Second Sight has a history of operating losses and has no current revenue producing operations, the future of its business is difficult to evaluate.

To date, Second Sight’s operations on a consolidated basis have consisted of the continued development and clinical studies of its Orion-focused technologies and implementation of the early parts of Second Sight’s business plan. Second Sight has incurred significant operating losses in each year since its inception and it will continue to incur additional losses for the next several years. In addition, its losses may be greater than expected and its operating results may suffer. Second Sight has limited historical financial data upon which it may base its projected revenue and base its planned operating expenses. This operating history makes it difficult to evaluate its technology or prospective operations and business prospects.

 

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Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and initial trials may not be predictive of future trial results.

Clinical testing is expensive and can take several or more years to complete, and its outcome is inherently uncertain. Failure or delay can occur at any time during the clinical trial process. Success in nonclinical studies and early feasibility clinical studies does not ensure that expanded clinical trials that will be used to support regulatory submissions will be successful. These setbacks may be caused by, among other things, nonclinical findings made while clinical trials were underway, and safety or efficacy observations made in clinical trials, including previously unreported adverse events. Even if Second Sight’s clinical trials are completed, the results may not be sufficient to obtain regulatory approval or clearance for its product candidates.

Interim “top-line” and preliminary results from Second Sight’s clinical trials that it announces or publishes from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, Second Sight may publish interim top-line or preliminary results from its clinical trials. Interim results from clinical trials that it may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or top line results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data Second Sight previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Differences between preliminary or interim data and final data could significantly harm Second Sight’s business prospects and may cause the trading price of its common stock to fluctuate significantly.

Risks Related to Second Sight’s Common Stock

Second Sight has not been profitable to date and expect its operating losses to continue for the foreseeable future; Second Sight may never be profitable.

Second Sight has incurred operating losses and generated negative cash flows since its inception and have financed its operations principally through equity investments and borrowings. Second Sight’s ability to generate sufficient revenues to fund operations is uncertain. For the fiscal year ended December 31, 2020, Second Sight generated no revenue from operations and incurred a net loss of $14.9 million. For the fiscal year ended December 31, 2021, Second Sight generated no revenue from operations and incurred a net loss of $8.9 million. Second Sight’s total accumulated deficit through December 31, 2021, was $328.6 million.

As a result of Second Sight’s limited commercial operating history, revenue is difficult to forecast. Second Sight expects expenses to increase in the future as it expands its activities in connection with the further development of Orion. Second Sight cannot assure you that it will be profitable in the future. Accordingly, the extent of Second Sight’s future losses and the time required to achieve profitability, if ever, is uncertain. Failure to achieve profitability could materially and adversely affect the value of its common stock and its ability to effect additional financings. The success of the business depends on its ability to increase revenues to offset expenses. If Second Sight does not achieve profitability, or otherwise fall short of projections, its business, financial condition and operating results will be materially adversely affected.

Sales, or the availability for sale, of substantial amounts of Second Sight’s common stock could adversely affect the value of its common stock.

Second Sight cannot predict the effect, if any, that future sales of its common stock, or the availability of its common stock for future sales, will have on the market price of its common stock. Sales of substantial amounts of its common stock in the public market and the availability of shares for future sale could adversely affect the prevailing market price of its common stock. This in turn could impair Second Sight’s future ability to raise capital through an offering of its equity securities.

There may be future sales or other dilution of Second Sight’s equity, which may adversely affect the market price of its common stock.

Second Sight is not restricted from issuing additional shares of common stock. The market price of Second Sight’s common stock could decline as a result of sales of its common stock and warrants or the

 

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perception that such sales could occur. Second Sight may issue and sell additional shares of its common stock in private placements or registered offerings in the future. Second Sight also may conduct additional registered rights offerings in the future pursuant to which it may issue shares of its common stock or other securities.

Risks Relating to Second Sight’s Operations

The COVID-19 pandemic has had an adverse effect on Second Sight’s business and results of operations and is expected to continue to have further adverse effects, which could be material, on its business, results of operations, financial condition, liquidity, and capital investments.

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China and has since spread globally. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, most states in the U.S., including California, where Second Sight is headquartered, have declared a state of emergency. The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or stay-at-home orders, and business shutdowns.

In accordance with local and state guidelines regarding the COVID-19 pandemic, Second Sight is requiring all of Second Sight’s employees to wear masks in the office and use their best judgement to work remotely or work in the office. While many of Second Sight’s employees are accustomed to working remotely, much of its workforce has not historically been remote. Although Second Sight continues to monitor the situation and may adjust its current policies as more information and public health guidance becomes available, restricting the ability to do business in person may create operational or other challenges, any of which could harm its business, financial condition and results of operations.

In addition, Second Sight’s clinical trials have been affected by the COVID-19 outbreak. Patient visits in ongoing clinical trials have been delayed, 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. For example, scheduled patient visits to Second Sight’s clinical sites at UCLA and Baylor were temporarily put on hold due to COVID-19. Visits have now resumed at both sites. In addition, the validation study for the revised FLORA assessment was paused due to travel requirements for its completion. Also, some of Second Sight’s suppliers of certain materials used in the development of its product candidates are located in areas impacted by COVID-19 which could limit its ability to obtain sufficient materials for its product candidates. COVID-19 has and will continue to adversely affect global economies and financial markets of many countries, resulting in an economic downturn that could affect demand for Second Sight’s product candidates, if approved, and impact its operating results. Even after the COVID-19 pandemic has subsided, Second Sight may continue to experience an adverse impact to Second Sight’s business as a result of the continued global economic impact of the pandemic. Second Sight could experience further harm to its business, and it cannot anticipate all of the ways in which health epidemics such as COVID-19 and its variants could adversely impact its business. Although Second Sight is continuing to monitor and assess the effects of the COVID-19 pandemic on its business, the ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change.

COVID-19 has directly and indirectly adversely affected Second Sight and will likely continue to do so for an uncertain period of time. In March and April 2020 Second Sight laid off the majority of its employees as a result of COVID-19 and an inability to obtain financing. Second Sight retains approximately fifteen of Second Sight’s employees to oversee current operations, including some that were re-hired once its financial situation improved, and the future of Second Sight became clearer. The cumulative effects of COVID-19 and its variants on Second Sight cannot be predicted at this time, but could include, without limitation:

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reputational damages of Second Sight and its products;

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inability to raise additional funds to finance and continue Second Sight’s operations;

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inability to maintain adequate office laboratory facilities;

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inability to retain and hire experienced personnel;

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•

diminished ability, or inability, to enroll patients or complete clinical trials and other activities required to achieve regulatory clearance of Second Sight’s products under development

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inability to finalize Second Sight’s plan for and enroll patients into its proposed pivotal clinical trial;

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material delays or inability to complete development and commercialization of Orion;

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inability to satisfy Nasdaq’s continued listing requirements and possible delisting; and

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other uncertain events that may have negative impact on Second Sight’s operations.

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Materials necessary to manufacture Orion may not be available on commercially reasonable terms, or at all, which may delay development, manufacturing and commercialization of Second Sight’s products.

Second Sight relies on numerous suppliers to provide materials, components and services necessary to produce the Orion system and next generation product candidates. Certain suppliers are currently sole source because of Second Sight’s low manufacturing volumes and its need for specialty technical or other engineering expertise. Second Sight’s suppliers may be unable or unwilling to deliver these materials and services to it timely as needed or on commercially reasonable terms. Should this occur, Second Sight would seek to qualify alternative suppliers or develop in-house manufacturing capability but may be unable to do so. Substantial design or manufacturing process modifications and regulatory approval might be required to facilitate or qualify an alternate supplier. Even where Second Sight could qualify alternative suppliers the substitution of suppliers may be at a higher cost and cause time delays including delays associated with additional possible FDA review, that could impede the production of the Orion system, reduce gross profit margins and impact its ability to deliver its products as may be timely required to meet demand.

Any failure or delay in completing clinical trials or studies for new product candidates or next generation of Second Sight’s products and the expense of those trials could adversely affect its business.

Preclinical studies and clinical trials required to demonstrate the safety and efficacy of incremental changes, including new wearables and software enhancements and for new product candidates such as Orion are time consuming and expensive. If Second Sight is required to conduct additional clinical trials or other studies with respect to any of Second Sight’s product candidates beyond those that it has contemplated, if it is unable to successfully complete its clinical trials or other studies or if the results of these trials or studies are not positive or are only modestly positive, Second Sight may be delayed in obtaining marketing approval for those product candidates, it may not be able to obtain marketing approval or it may obtain approval for indications that are not as broad as intended. Second Sight’s product development costs also will increase if it experiences delays in testing or approvals.

The completion of clinical trials for Second Sight’s product candidates could be delayed because of its inability to manufacture or obtain from third parties materials sufficient for use in preclinical studies and clinical trials; delays in patient enrollment and variability in the number and types of patients available for clinical trials; difficulty in maintaining contact with patients after treatment, resulting in incomplete data; poor effectiveness of product candidates during clinical trials; unforeseen safety issues or side effects; and governmental or regulatory delays and changes in regulatory requirements and guidelines.

If Second Sight incur significant delays in its clinical trials, its competitors may be able to bring their products to market before Second Sight does which could result in harming Second Sight’s ability to commercialize its products or potential products. If Second Sight experiences any of these occurrences its business will be materially harmed.

Second Sight has lost key management and staff personnel because of Covid-19 pandemic. If it fails to recruit highly skilled personnel to replace employees who have left it, Second Sight’s ability to identify, develop and commercialize new or next generation product candidates will be impaired, could result in loss of markets or market share and could make it less competitive.

Second Sight has laid off the majority of its employees including key members of its executive management team because Covid-19 outbreak affected its ability to fund its operations. its existing employees could leave it with little or no prior notice. The loss of any management executive or any other principal

 

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member of its management team or its inability to attract and retain skilled employees could impair its ability to identify, develop and market new products or effectively deal with regulatory and reimbursement matters. Will McGuire, its President and Chief Executive Officer, tendered his resignation effective March 27, 2020 and its Board appointed Matthew Pfeffer, a member of its Board of Directors, as acting chief executive officer, and Edward Sedo, its Controller, as Principal Accounting and Financial Officer. On March 26, 2021 Matthew Pfeffer relinquished his position as acting chief executive officer and the Board appointed Scott Dunbar, its Senior Patent Counsel and Compliance Officer, as acting chief executive officer. To the extent that Second Sight loses experienced personnel, it is critical that it develop other employees, hire new qualified personnel and successfully manage the transfer of critical knowledge. No assurance can be given that it will be able to do so.

Second Sight could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

The U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Second Sight intends to adopt policies for compliance with these anti-bribery laws, which often carry substantial penalties. Second Sight cannot assure you that its internal control policies and procedures always will protect Second Sight from reckless or other inappropriate acts committed by Second Sight’s affiliates, employees or agents. Violations of these laws, or allegations of such violations, could have a material adverse effect on its business, financial position and results of operations and could cause the market value of Second Sight’s common stock to decline.

Risks Related to Intellectual Property and Other Legal Matters

If Second Sight or its licensors are unable to protect its/their intellectual property, then Second Sight’s financial condition, results of operations and the value of Second Sight’s technology and products could be adversely affected.

Patents and other proprietary rights are essential to Second Sight’s business, and its ability to compete effectively with other companies is dependent upon the proprietary nature of its technologies. Second Sight also rely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to develop, maintain and strengthen its competitive position. Second Sight seek to protect these, in part, through confidentiality agreements with certain employees, consultants and other parties. Second Sight’s success will depend in part on the ability of its licensors to obtain, maintain (including making periodic filings and payments) and enforce patent protection for their intellectual property, in particular, those patents to which it has secured exclusive rights. Second Sight’s licensors may not successfully prosecute or continue to prosecute the patent applications which Second Sight has licensed. Even if patents are issued in respect of these patent applications, Second Sight or its licensors may fail to maintain these patents, may determine not to pursue litigation against entities that are infringing upon these patents, or may pursue such enforcement less aggressively than it ordinarily would. Without adequate protection for the intellectual property that Second Sight owns or licenses, other companies might be able to offer substantially identical products for sale, which could unfavorably affect Second Sight’s competitive business position and harm its business prospects. Two patents licensed from the John Hopkins University (the JHU Patents) expired in 2018, along with Second Sight’s License Agreement with the Johns Hopkins University. The expiration of the JHU Patents removes a barrier to entry for competitors who may be interested in selling a product competitive with Argus II. The JHU Patents are specific to retinal stimulation and have no effect on Orion technology.

Even if issued, patents may be challenged, invalidated, or circumvented, which could limit Second Sight’s ability to stop competitors from marketing similar products or limit the length of term of patent protection that Second Sight may have for its products.

Litigation or third-party claims of intellectual property infringement or challenges to the validity of Second Sight’s patents would require it to use resources to protect its technology and may prevent or delay the development, regulatory approval or commercialization Orion system or new product candidates. Further, the validity of some of its patents has been challenged.

Pixium has three currently pending oppositions in the European Patent Office (EPO) challenging the validity of European patents owned by Second Sight. The EPO proceedings involving Pixium and Second Sight are:

 

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EP1937352 Sub-Threshold Stimulation to Precondition Neurons for Supra-Threshold Stimulation — cancelled in the Opposition Division, appeal pending.

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EP2061549 — Package for an Implantable Neural Stimulation Device — Cancelled in the Opposition Division, appeal pending.

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EP2185236 — Implantable Device for the Brain — Upheld in the Opposition Division, appeal pending.

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If Second Sight is the target of claims by third parties asserting that its products or intellectual property infringe upon the rights of others it may be forced to incur substantial expenses or divert substantial employee resources from its business and, if successful, those claims could result in Second Sight’s having to pay substantial damages or prevent it from developing one or more product candidates. Further, if a patent infringement suit were brought against Second Sight or its collaborators, it or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

The validity of some of Second Sight’s patents has been challenged. If Second Sight experiences patent infringement claims, or if it elects to avoid potential claims others may be able to assert, Second Sight or its collaborators may choose to seek, or be required to seek, a license from the third-party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if Second Sight or its collaborators were able to obtain a license, the rights may be nonexclusive, which would give Second Sight’s competitors access to the same intellectual property. Ultimately, Second Sight could be prevented from commercializing a product, or be forced to cease some aspect of its business operations if, as a result of actual or threatened patent infringement claims, Second Sight or its collaborators are unable to enter into licenses on acceptable terms. This could harm Second Sight’s business significantly. The cost to Second Sight of any litigation or other proceeding, regardless of its merit, even if resolved in its favor, could be substantial. Some of Second Sight’s competitors may be able to bear the costs of such litigation or proceedings more effectively than Second Sight can because of their having greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on Second Sight’s ability to compete in the marketplace. Intellectual property litigation and other proceedings may, regardless of their merit, also absorb significant management time and employee resources.

If Second Sight fails to comply with its obligations in the agreements under which it licenses development or commercialization rights to products or technology from third parties, it could lose license rights that are important to its business.

Second Sight holds an exclusive license from the Doheny Eye Institute (DEI) to intellectual property relating to the Argus II visual prosthesis and Orion cortical visual prosthesis. This license imposes various commercialization, milestone payment, profit sharing, insurance and other obligations on Second Sight. If Second Sight fails to comply with any material obligations, DEI will have the right to terminate the license, which covers part of the Argus and Orion systems. The existing or future patents to which Second Sight has rights based on its agreements with DEI may be too narrow to prevent third parties from developing or designing around these patents. Additionally, Second Sight may lose its exclusive rights to the patents and patent applications it licenses in the event of a breach or termination of the license agreement. The license expires with the expiration of the last of the licensed patents on August 8, 2033. The royalty in the agreement is 0.5% of the patented portion of Argus II system sales. All of the patents in the DEI agreement are co-owned by Second Sight and DEI. Second Sight licenses DEI’s interest in the patents to maintain its exclusive use on that intellectual property. Should the license terminate, Second Sight retains the right to utilize the intellectual property but may not be able to prevent others from doing so, in which case Second Sight may lose a competitive advantage.

If Second Sight is unable to protect the intellectual property used in its products, others may be able to copy its innovations which may impair its ability to compete effectively in Second Sight’s markets.

The strength of Second Sight’s patents involves complex legal and scientific questions and can be uncertain. Second Sight has over 300 issued patents and over 15 pending patent applications worldwide as

 

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of December 31, 2021. Second Sight’s patent applications may be challenged or fail to result in issued patents and its existing or future patents may be too narrow to prevent third parties from developing or designing around its intellectual property and in that event, it may lose competitive advantage and its business may suffer.

Further, the patent applications that Second Sight licenses or has filed may fail to result in issued patents. The claims may need to be amended. Even after amendment, a patent may not issue and in that event, it may not obtain the exclusive use of the intellectual property that it seeks and may lose competitive advantage which could result in harm to Second Sight’s business.

Third-party claims of intellectual property infringement may prevent or delay Second Sight’s development and commercialization activities for Orion.

Although Second Sight is not currently aware of any litigation or other proceedings or third-party claims of intellectual property infringement related to the Argus II or Orion systems, the medical device industry is characterized by many litigation cases regarding patents and other intellectual property rights. Other parties may in the future allege that Second Sight’s activities infringe their patents or that Second Sight is employing their proprietary technology without authorization. Second Sight may not have identified all the patents, patent applications or published literature that affect Second Sight’s business either by blocking its ability to commercialize its product, by preventing the patentability of one or more aspects of its products or those of its licensors or by covering the same or similar technologies that may affect its ability to market its product.

In addition, even in the absence of litigation, Second Sight may need to obtain licenses from third parties to advance Second Sight’s research or allow commercialization of its product candidates, and it has done so from time to time. Second Sight may fail to obtain future licenses at a reasonable cost or on reasonable terms, if at all. In that event, Second Sight may be unable to further develop and commercialize one or more of its product candidates, which could harm its business significantly.

Second Sight may become involved in future lawsuits to protect or enforce its patents or the patents of its licensors, which could be expensive, time consuming and unsuccessful.

Competitors may infringe Second Sight’s patents or the patents of its licensors. To counter infringement or unauthorized use, Second Sight may file infringement claims, which can be expensive and time consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or of Second Sight’s licensors is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that Second Sight’s patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of Second Sight’s patents at risk of being invalidated or interpreted narrowly and could put Second Sight’s patent applications at risk of not issuing.

The U.S. Patent and Trademark Office may initiate interference proceedings to determine the priority of inventions described in or otherwise affecting Second Sight’s patents and patent applications or those of Second Sight’s collaborators or licensors. An unfavorable outcome could require Second Sight to cease using the technology or to attempt to license rights to it from the prevailing party. Second Sight’s business could be harmed if a prevailing party does not offer it a license on terms that are acceptable to Second Sight. Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distraction of Second Sight’s management and other employees. Second Sight may not be able to prevent, alone or with Second Sight’s licensors, misappropriation of Second Sight’s proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the U.S.

Second Sight is increasingly dependent on sophisticated information technology systems, including systems from third parties, and if it fails to properly maintain the integrity of Second Sight’s data or if Second Sight’s products do not operate as intended, Second Sight’s business could be materially and adversely affected.

Second Sight is increasingly dependent on sophisticated information technology systems for Second Sight’s products and infrastructure, and it relies on these information technology systems, including technology from third-party vendors, to process, transmit and store electronic information in Second Sight’s day-to-day operations. Second Sight continuously monitor, upgrade and expand the systems it operates to improve

 

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information systems capabilities. Second Sight’s information systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop or contract new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, and the increasing need to protect patient and customer information. In addition, third parties may attempt to hack into Second Sight’s products or systems and may obtain data relating to patients with Second Sight’s products or proprietary information. If Second Sight fails to maintain or protect Second Sight’s information systems and data integrity with cyber security effectively, it could lose existing customers, have difficulty attracting new customers, have problems in determining product cost estimates and establishing appropriate pricing, have difficulty preventing, detecting, and controlling fraud, have disputes with customers, physicians, and other health care professionals, have regulatory sanctions, fines, or penalties imposed, have increases in operating expenses, incur expenses or lose revenue as a result of a data privacy breach, or suffer other adverse consequences. There can be no assurance that Second Sight’s process of upgrading and expanding Second Sight’s information systems capabilities, protecting and enhancing Second Sight’s systems including cyber security methods, and developing new systems to keep pace with continuing changes in information processing technology will be successful or that additional systems issues will not arise in the future. Second Sight’s products contain hardware and software protections which are intended to prevent unauthorized access or control of Second Sight’s implanted device. However, if an unauthorized user is able to breach Second Sight’s controls and gain access to one of Second Sight’s devices implanted in a patient, serious harm, injury and/or death may result. Any significant breakdown, intrusion, interruption, corruption, or destruction of these systems, as well as any data breaches, could have a material adverse effect on Second Sight’s business.

Product liability lawsuits could divert Second Sight’s resources, result in substantial liabilities and reduce the commercial potential of Second Sight’s products.

Second Sight face a risk of product liability claims arising from the prosthesis being implanted, and it is possible that it may be held liable for injuries of patients who receive Second Sight’s product. These lawsuits may divert Second Sight’s management from pursuing Second Sight’s business strategy and may be costly to defend. In addition, if Second Sight is held liable in any of these lawsuits, it may incur substantial liabilities and may be forced to limit or forego further commercialization of one or more of Second Sight’s products. Second Sight maintains product liability insurance relating to Second Sight’s clinical trials and commercial sales, with an aggregate coverage limit under these insurance policies of $10 million, and while it believes this amount of insurance currently is sufficient to cover Second Sight’s product liability exposure, these limits may not prove adequate to fully cover potential liabilities. In addition, Second Sight may not be able to obtain or maintain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims, which could prevent or inhibit the commercial production and sale of Second Sight’s products. If the use of Second Sight’s products harm or are alleged to harm people, it may be subject to costly and damaging product liability claims that exceed Second Sight’s policy limits and cause Second Sight significant losses that could seriously harm Second Sight’s financial condition or reputation.

Legislative or regulatory reform of the health care system in the U.S. and foreign jurisdictions may adversely impact Second Sight’s business, operations or financial results.

Second Sight’s industry is highly regulated and changes in law may adversely impact Second Sight’s business, operations or financial results. In March 2010, the Patient Protection and Affordable Care Act, and a related reconciliation bill were signed into law. This legislation changes the current system of healthcare insurance and benefits intended to broaden coverage and control costs. The law also contains provisions that will affect companies in the medical device industry and other healthcare related industries by imposing additional costs and changes to business practices.

Moreover, in some foreign countries, including countries in Europe and Canada, the pricing of approved medical devices is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take 12 months or longer after the receipt of regulatory approval and product launch. To obtain reimbursement or pricing approval in some countries, Second Sight may be required to conduct a clinical trial that compares the cost-effectiveness of Second Sight’s product candidate to other available therapies. Second Sight’s business could be materially harmed if reimbursement of Second Sight’s products is unavailable or limited in scope or amount or if pricing is set at unsatisfactory levels.

 

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Second Sight cannot predict what healthcare reform initiatives may be adopted in the future. Further federal and state legislative and regulatory developments appear likely, and it expects ongoing initiatives in the U.S. and Europe. These reforms could have an adverse effect on Second Sight’s ability to obtain timely regulatory approval for new products and on anticipated revenues from product candidates, both of which may affect Second Sight’s overall financial condition.

Second Sight is a “non-accelerated filer” and a “smaller reporting company” for SEC filing purposes and it cannot be certain if the reduced disclosure requirements applicable will make Second Sight’s common stock less attractive to investors.

For so long as Second Sight remains a ‘non-accelerated filer” it may take advantage of certain exemptions from various requirements that are applicable to public companies that are not ‘non-accelerated filers,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in Second Sight’s periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find Second Sight’s common stock less attractive because Second Sight relies on these exemptions. If some investors find Second Sight’s common stock less attractive as a result, there may be a less active trading market for Second Sight’s common stock, and Second Sight’s stock price may be more volatile or may decline.

In addition, Section 107 of the JOBS Act also provides that a “smaller reporting company” can take advantage of an extended transition period for complying with new or revised accounting standards. However, Second Sight chose to “opt out” of this extended transition period, and as a result, it intends to comply with new or revised accounting standards on the relevant dates that adoption of those standards may be required. Second Sight’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Risks Relating to Second Sight’s Financial Results and Need for Financing

Fluctuations in Second Sight’s quarterly operating results and cash flows could adversely affect the price of Second Sight’s common stock.

Second Sight’s operating results will be affected by numerous factors such as:

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materially reduced revenue Second Sight receives as a result of refocusing Second Sight’s business and resources to the Orion II as it discontinued the production of the Argus II systems, and eliminated Second Sight’s marketing and implants of the Argus II;

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the status of Second Sight’s preclinical and clinical development programs;

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continued clinical results from Second Sight’s Early Feasibility Study of six subjects currently under way at UCLA and Baylor;

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the filing and acceptance of an IDE with the FDA to initiate a larger pivotal trial for regulatory approval;

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clinical results from conducting Second Sight’s larger pivotal trial(s):

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three of Second Sight’s six patient EFS study have had the devices explanted which could cause Second Sight to have difficulty recruiting future subjects for implantation;

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Second Sight’s ability to obtain regulatory approval of the Orion system in the U.S. and other additional jurisdictions;

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the emergence of products that compete with Second Sight’s product candidates;

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Second Sight’s ability to leverage Argus II technology for cortical stimulation using Orion;

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the status of Second Sight’s preclinical and clinical development programs, variations in the level of expenses related to Second Sight’s existing product candidates or preclinical and clinical development programs;

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execution of collaborative, licensing or other arrangements, and the timing of payments received or made under those arrangements;

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any intellectual property infringement lawsuits to which Second Sight may become a party; and

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Second Sight’s ability to obtain reimbursement from government or private payors at levels Second Sight deems adequate to sustain Second Sight’s operations.

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If Second Sight’s quarterly operating results fall below the expectations of investors or securities analysts, or if it experiences delays in reaching commercialization of the Orion system the price of Second Sight’s common stock could decline substantially. Any quarterly fluctuations in Second Sight’s operating results and cash flows may cause the price of Second Sight’s stock to fluctuate substantially. Second Sight believes that, in the near term, quarterly comparisons of Second Sight’s financial results are not necessarily meaningful and should not be relied upon as an indication of Second Sight’s future performance.

Second Sight needs additional capital to support Second Sight’s operations and growth. Additional capital may be difficult to obtain restricting Second Sight’s operations and resulting in additional dilution to Second Sight’s stockholders.

Second Sight’s business requires additional capital for implementation of Second Sight’s long term business plan. Second Sight currently estimate that Second Sight’s existing cash and cash equivalents can sustain Second Sight’s operations for at least 24 months. The actual amount of funds that Second Sight will need for Second Sight’s business will be determined by many factors, some of which are beyond Second Sight’s control, and Second Sight may need funds sooner than currently anticipated. These factors include:

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the amount of Second Sight’s future operating losses;

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legal, accounting and other costs associated with the proposed merger with NPM;

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expenses relating to the Early Feasibility Study of the Orion;

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ongoing commercialization planning for the Orion system;

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the amount of Second Sight’s research and development, including research and development for the Orion visual prosthesis, marketing and general and administrative expenses; and