Vivani Medical(VANI) - 2023 Q4 - Annual Report

Product Development - Vivani Medical's lead programs NPM-115 and NPM-119 are miniature, 6-month GLP-1 implant candidates targeting chronic weight management and type 2 diabetes, respectively [346]. - In February 2024, Vivani reported that NPM-115 achieved approximately 20% weight loss in a preclinical study, comparable to semaglutide injections [356]. - An Investigational New Drug Application for NPM-119 was filed with the FDA on July 14, 2023, but the study is currently on clinical hold due to insufficient CMC information [352]. - Vivani's NanoPortal technology allows for long-term, near constant-rate delivery of medications, aiming to improve adherence in chronic disease treatment [345]. - The company established Vivani Medical Australia Pty Ltd. to support studies of its products and candidates [355]. Financial Performance - Net loss increased by $11.8 million, from $13.9 million in 2022 to $25.7 million in 2023, attributed to higher operating expenses and the prior year's gain on the bargain purchase from the Second Sight acquisition [374]. - Cash, cash equivalents, and restricted cash decreased by $24.5 million, from $46.4 million in 2022 to $22.0 million in 2023 [378]. - Cash used in operating activities was $23.7 million in 2023, compared to $18.8 million in 2022, primarily due to a net loss of $25.7 million [379][381]. - Other income decreased significantly from $7.4 million in 2022 to $1.3 million in 2023, primarily due to the absence of a gain on bargain purchase from the Second Sight acquisition [373]. Funding and Capital Management - Vivani raised approximately $15.0 million through a registered direct offering of 3,947,368 shares at $3.80 per share on March 5, 2024 [362]. - The company has received a $1.6 million grant from the NIH, with a total potential funding of $6.4 million over five years, to support a clinical trial [360]. - The company entered into a Securities Purchase Agreement on March 1, 2024, for the issuance of 3,947,368 shares at a purchase price of $3.80 per share, generating gross proceeds of approximately $15.0 million [376]. - The company estimates that current cash will meet planned obligations into the second half of 2025, contingent on developing profitable operations or raising additional capital [377]. Operational Changes - As of December 31, 2023, Cortigent, a wholly-owned subsidiary, had 5,000,000 shares of common stock outstanding after a 1-for-4 reverse stock split [349]. - The company has reduced Cortigent's workforce from 14 to 7 employees to conserve cash while continuing clinical studies [354]. - Working capital decreased from $40.7 million in 2022 to $17.3 million in 2023 [378]. - The company has experienced recurring operating losses and negative operating cash flows since inception, relying on equity securities sales for working capital [375]. Expense Management - Research and development expenses increased by $2.8 million, or 20%, from $14.2 million in 2022 to $17.0 million in 2023, primarily due to higher payroll and the inclusion of the neuromodulation division from the Second Sight acquisition [371]. - General and administrative expenses rose by $2.9 million, or 41%, from $7.1 million in 2022 to $10.0 million in 2023, driven by increased payroll, rent, and the inclusion of the neuromodulation division [372].