Vivani Medical(VANI) - 2025 Q4 - Annual Report

Product Development - Vivani Medical is developing miniature, ultra long-acting subdermal drug implants using its proprietary NanoPortal™ technology, aimed at improving medication adherence for chronic diseases [453]. - Vivani's lead program, NPM-139, a six-month GLP-1 (semaglutide) implant, demonstrated approximately 20% weight loss in preclinical studies, maintained for over six months after a single administration [456]. - The NPM-115 exenatide implant showed comparable weight loss results of approximately 20% in preclinical studies with obese mice, indicating potential for effective chronic weight management [459]. - The FDA lifted the clinical hold on NPM-119, allowing for the initiation of a first-in-human study for the treatment of type 2 diabetes [465]. - Vivani plans to initiate a Phase 1 clinical study for NPM-139 in the first half of 2026, pending regulatory clearance [472]. - The LIBERATE-1 clinical trial for NPM-115 demonstrated a positive safety and tolerability profile, with top-line data released in August 2025 [463]. Financial Performance - The company has experienced recurring operating losses and negative cash flows since inception, with expectations to continue this trend for the foreseeable future [492]. - Net loss for the year ended December 31, 2025 was $26.6 million, an increase of $3.1 million compared to a net loss of $23.5 million in 2024 [512]. - Cash used in operating activities during 2025 was $24.3 million, compared to $20.8 million in 2024 [514][515]. - Net cash used in investing activities was $1.2 million in 2025, up from $0.6 million in 2024 [516]. - Financing activities provided $23.3 million of cash in 2025, primarily from a registered direct offering and securities purchase agreements [516]. Capital and Funding - On March 1, 2024, the company raised $15 million through a registered direct offering of 3,947,368 shares at $3.80 per share, resulting in net proceeds of $13.7 million after issuance costs [478]. - On April 22, 2024, the company entered into an Open Market Sale Agreement to offer up to $75 million in common stock through Jefferies LLC [479]. - In 2025, the company issued 7,480,158 shares under private sales transactions, generating gross proceeds of $8.6 million, with an expected additional $12.6 million from remaining shares in 2026 [486]. - On October 26, 2025, the company completed a private placement of 3,703,703 shares at $1.62 per share, resulting in gross proceeds of $6 million [487]. - Concurrently, the company raised approximately $9.7 million from a registered direct offering of 6,000,000 shares, netting $8.7 million after fees [489]. - The company received $35,000 in grants during the twelve months ended December 31, 2025, compared to $200,000 in the previous year, reflecting a decrease in grant funding [491]. Research and Development - Research and development expense for the year ended December 31, 2025 was $18.1 million, an increase of $2.4 million or 15% compared to $15.7 million in 2024 [509]. - The company expects research and development expenses to increase in the future as it pursues enhancements of existing products and develops new technologies [513]. Strategic Initiatives - Vivani is exploring strategic options for its neurostimulation technology through its subsidiary Cortigent, including a potential spin-off or IPO [474]. - If Cortigent successfully completes an IPO, it will repay Vivani $1.5 million from the proceeds and issue a promissory note for $2 million [475]. - The strategic goal of the potential spin-off or IPO is to create two focused companies to enhance value in their respective therapeutic areas [476]. - On April 12, 2025, Okava Pharmaceuticals expanded its collaboration with Vivani to include the development of a long-acting GLP-1 therapy for dogs, adding $5 million in regulatory milestone payments for obesity treatment [477]. Operational Outlook - The company estimates that available cash will meet its obligations into mid-2027, but additional capital will be necessary for ongoing operations [493]. - The company is subject to risks associated with developing pharmaceutical products, including significant increases in operating expenses as clinical trials and research activities expand [496]. - General and administrative expense for the year ended December 31, 2025 was $9.4 million, up $0.5 million or 6% from $8.9 million in 2024 [510]. - The company has not declared or paid dividends and has no plans to do so in the foreseeable future [507]. - As of December 31, 2025, the company had no off-balance sheet arrangements [518]. - The majority of operating expenses were denominated in U.S. dollars, with no foreign currency forward contracts currently in place [520].