Second Sight Medical Products Inc. (NASDAQ: EYES) is in the process of raising additional capital through a rights issue arrangement. The company recently set the record date for the upcoming rights issue as May 13, 2016. It further said that rights not exercised during the length of the rights issue period will expire on May 31, 2016. But management left options open that it could alter the date at any time and for any reason, including canceling of the rights issue, to enable it achieve its fundraising goal.
The rights issue
Second Sight Medical Products Inc. (NASDAQ: EYES)’s right issue involves distributing one non-transferable right for each of the company’s common shares in the hands of shareholders of record. With that, shareholders will be entitled to take up additional shares in Second by investing only $0.50 for each share.
In case some shareholders don’t take full advantage of the rights issue, those who do will again have the opportunity to subscribe for the unused rights.
Putting the proceeds to use
Second Sight Medical Products Inc. (NASDAQ: EYES) intends to use the funds raised through the rights issue for a number of programs. One of the projects it is eying with the money is funding the ongoing post-market study of Argus II for the treatment of age-related blindness resulting from macular degeneration. The study is focused on assessing the efficacy and safety of Argus II.
Still concerning Argus II, Second hopes to use the proceeds from the rights issue to expand the market for the product both internationally and domestically.
The other program Second wants to spend the rights issue proceeds on is development of Orion I so that it can be used to treat all forms of blindness, if possible. Any remaining funds will be funneled to boost working capital and R&D.
Second Sight Medical Products Inc. (NASDAQ: EYES) finished 1Q2016 with cash and equivalents totaling $9.8 million, down from more than $15.7 million in the previous quarter and $29.1 million in the corresponding quarter a year earlier.
The company generated net revenue of $1.1 million in 1Q2016, down from $1.7 million in the same quarter a year ago. For the bottom-line, Second posted EPS loss of $0.13, wider than EPS loss of $0.12 a year ago.