Vivani Medical, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1. Organization and Business Operations

Vivani Medical, Inc.(“Vivani,” the “Company,” “we,” “us,” “our” or similar terms) is a clinical stage biopharmaceutical company which develops miniaturized, subdermal drug implants utilizing its proprietary NanoPortal™ technology, which is designed to enable ultra long-acting, near constant-rate delivery of a broad range of medicines to treat chronic diseases. Vivani uses this platform technology to develop and potentially commercialize drug implant candidates, alone or in collaboration with pharmaceutical company partners, to address a leading cause of poor clinical outcomes in the treatment of chronic disease, medication non-adherence. According to the U.S. Centers for Disease Control and Prevention, adherence is defined as the extent to which an individual’s behavior, including taking medications, corresponds to recommendations from a health care provider. An alarmingly high proportion of patients, approximately 50%, do not take their medicine as prescribed in the real world, a statistic that applies to both daily oral as well as weekly injectable medicines. For example, a recent study has shown that 64% of patients taking Wegovy® (semaglutide injection) discontinue therapy within the first year of treatment, a number that increases to 76% by the second year. Unfortunately, GLP-1 discontinuation may result in a quick reversal of the health benefits in the majority of patients.

At Vivani, we are developing a portfolio of miniature, subdermal drug implant candidates that, unlike most oral and injectable medicines, are designed with the goal of guaranteeing medication adherence by delivering therapeutic drug levels for up tosix months or longer. In addition, our aim is to minimize fluctuations in patients’ drug levels through the use of our NanoPortal technology, which may improve the tolerability profiles for medicines, including GLP-1 receptor agonists, that produce side effects associated with fluctuating drug levels in the blood.

Our emerging portfolio of miniature, ultra long-acting drug implants have the potential to revolutionize the treatment of chronic diseases by directly addressing poor medication adherence and improving patient tolerability to their treatments which has the potential to translate into better health outcomes for patients in the real-world setting. Vivani's lead program, NPM-115, is a miniature, six-month, GLP-1 (high-dose exenatide) implant currently in clinical-stage testing for chronic weight management in obese and overweight individuals. Other programs include, NPM-139 (semaglutide implant) also in development for chronic weight management, NPM-119 (exenatide implant) in development for the treatment of type 2 diabetes and OKV-119, another GLP-1 based implant in development for the treatment of cardiometabolic disorders in cats and dogs in collaboration with animal health partner Okava Pharmaceuticals, Inc. (“Okava”). On April 12, 2025, we entered into an amendment to that certain License and Supply Agreement with Okava to expand our ongoing collaboration with Okava to include dogs in the development of OKV-119, a long-acting GLP-1 therapy for weight management, diabetes and other cardiometabolic conditions.

Vivani resulted from the business combination of Second Sight Medical Products, Inc. (“Second Sight”) and Nano Precision Medical, Inc. (“NPM”). On August 30, 2022, Second Sight and NPM completed their merger pursuant to which NPM became a wholly owned subsidiary of Second Sight and the combined company of NPM and Second Sight was renamed Vivani Medical, Inc. Vivani’s main priority is the further development of its lead program NPM-115, a miniature,6-month, GLP-1 implant candidate for chronic weight management in obese or overweight patients withone or more risk factors and further development of the balance of the company’s miniature, ultra long-acting drug implant portfolio. In parallel, Vivani’s management team remains committed to identifying and exploring strategic options that will enable further development of its pioneering neurostimulation systems from legacy company Second Sight aimed at helping patients recover critical body functions.

In December 2022, we contributed our neurostimulation assets from legacy company Second Sight and certain liabilities to Cortigent, Inc. (“Cortigent”), a wholly owned subsidiary of Vivani to advance the Company’s pioneering neurostimulation technology. Cortigent has 5,000,000 shares of common stock outstanding, all owned by Vivani. In March 2023, Vivani announced the filing of a Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission (“SEC”) for the proposed initial public offering of Cortigent. On March 12, 2025, Vivani announced a change in strategy to discontinue efforts to pursue a proposed initial public offering and shift focus to file a Form 10 with the SEC to support the spin-off of Cortigent into a fully independent, publicly traded company. The strategic goal of this transaction is to createtwo focused companies dedicated to driving current and future value in their respective therapeutic areas of expertise. If the spinoff is successful, the loan payable from Cortigent to Vivani would be forgiven.

On July 6, 2023, Vivani changed its state of incorporation from the State of California to the State of Delaware by means of a plan of conversion, effective July 5, 2023. The reincorporation, including the principal terms of the plan of conversion, was submitted to a vote of, and approved by, Vivani’s stockholders at its 2023 Annual Meeting of Stockholders held on June 15, 2023. As part of this change of incorporation the Company established a par value of $0.0001 per share and all periods have been retroactively adjusted to reflect this change.

An IND for NPM-119 (GLP-1 implant) was filed with FDA on July 14, 2023, to support the initiation of a first-in-human study of an exenatide implant in patients with type 2 diabetes. On August 18, 2023, FDA provided written notification that the study was on full clinical hold, primarily due to insufficient Chemistry, Manufacturing, and Controls (“CMC”) information to assess the risk to human subjects. After providing additional information to sufficiently address the FDA's requests, the FDA lifted the clinical hold on NPM-119 on June 13, 2024 allowing for the proposed study to proceed. The primary objective of this first-in-human clinical study was to evaluate the safety, tolerability and pharmacokinetics of NPM-119 in type 2 diabetes patients. The initial study design also incorporated Bydureon BCise® (exenatide injection) for comparison purposes.

On August 25, 2023, the Company and Cortigent entered into an Amendment 1 (the “Amendment”) to the Transition Funding, Support and Services Agreement dated March 19, 2023 (the “TFSSA”). Pursuant to the TFSSA, Vivani has agreed to advance funds and provide or cause to be provided to Cortigent the services and funding intended to cover salaries and related costs, rent and other overhead in order to permit Cortigent to operate in substantially the same manner in which business operations of Cortigent were previously operated by Second Sight, prior to the formation of Cortigent, which obligations will continue, in the case of the funding obligations, at the discretion of Vivani or after the closing of an initial public offering of Cortigent. If an initial public offering of Cortigent closes, Cortigent has agreed to repay $1,500,000 to Vivani and enter into afive-year promissory note at 5% interest for $2,000,000 in favor of Vivani. Consequently, Vivani will forgive any remaining amounts due by Cortigent. Efforts to support a successful initial public offering of Cortigent ceased in March 2025 and efforts are now focused on a potential spinoff with the filing of a Form 10 registration statement. The TFSSA terminated effective December 31, 2024.

In the fourth quarter of 2023, Vivani Medical Australia Pty Ltd., a wholly owned subsidiary in Australia was established to support studies of our product candidates.

In February 2024, Vivani announced positive preclinical weight loss data with its exenatide implant that was comparable to semaglutide, the active ingredient in Ozempic®/Wegovy, and a strategic shift to prioritize the Company's obesity portfolio. In a study of high-fat diet-induced obese mice, the exenatide implant generated weight loss of approximately 20% compared to a sham implant control after a 28-day treatment duration, comparable to the extent of weight loss observed in mice treated with semaglutide injections in the same study.

In February, the Company also disclosed that semaglutide is the active pharmaceutical ingredient in NPM-139, another miniature, long term subdermal GLP-1 implant in development for chronic weight management further demonstrating our prioritization on obesity. NPM-139 also has the added potential benefit of once-yearly administration.

On May 28, 2024, Vivani announced the publication of positive weight loss data supporting the potential veterinary use of OKV-119, the company's miniature, long-acting GLP-1 implant under development with partner Okava for the treatment of pre-diabetes, diabetes and obesity in companion felines. The device is intended to be conveniently inserted under the skin during routine veterinary visits and is being designed to deliversix months of GLP-1 therapy with a single administration.

As stated previously, on June 13, 2024, Vivani announced that the FDA cleared the IND and lifted the clinical hold for NPM-119, the Company's miniature, six-month GLP-1 implant under development for the treatment of patients with type 2 diabetes.

On July 11, 2024, the Company provided an update of the clinical development plans for NPM-115, the clinical program associated with the miniature, long-acting GLP-1 (high-dose exenatide) implant for chronic weight management in obese and overweight individuals. The Company has redesigned the first-in-human study, LIBERATE-1™, initially intended to explore the safety, tolerability and pharmacokinetics of its exenatide implant in patients with type 2 diabetes, to evaluate the implant in obese and overweight patients.

On September 4, 2024, Vivani announced positive preclinical liver fat results with its miniature, ultra long-acting GLP-1 implant currently under development for chronic weight management in obese and overweight individuals and type 2 diabetes. The Company's GLP-1 (exenatide) implant produced sham-implant adjusted liver fat reduction of 82% in an obese mouse model from a single administration with expected twice-yearly dosing. These liver fat data are consistent with published results from similar investigations with semaglutide, the active pharmaceutical ingredient in Ozempic® and Wegovy®.

On September 26, 2024, the Company reported receiving regulatory approval to initiate its first-in-human clinical trial with a miniature, ultra long-acting GLP-1 (exenatide) implant in obese and overweight individuals in Australia. This clinical trial, known as LIBERATE-1, is part of the NPM-115 program and will investigate the safety, tolerability and full pharmacokinetic profile of an exenatide implant. The trial also represents the first clinical application of the Company’s proprietary NanoPorta drug implant technology. LIBERATE-1 was redesigned to enroll participants who will be titrated on weekly semaglutide injections for 8 weeks (0.25 mg/week for 4 weeks followed by 0.5 mg/week for 4 weeks) before being randomized to receive a single administration of Vivani’s exenatide implant (n=8), weekly exenatide injections (n=8), or weekly 1 mg semaglutide injections (n=8) for a 9-week treatment duration. Changes in weight will be measured. The trial was initiated at the end of 2024 with data projected to be available in mid-2025.

On December 19, 2024, Vivani announced that screening and enrollment of LIBERATE-1, the First-in-Human clinical trial with a GLP-1 implant in obese and overweight patients, was initiated attwo study centers in Australia. The primary objective of the study is to investigate the safety, tolerability and full pharmacokinetic profile of an exenatide implant in obese or overweight individuals. Consistent with previous guidance, study results are anticipated to be reported in mid-2025.

On March 13, 2025, Vivani announced the successful administration of its first GLP-1 (exenatide) implant in the LIBERATE-1 clinical trial. This milestone marks a critical step toward addressingone of healthcare’s most pressing challenges: medication adherence in metabolic diseases including chronic weight management and type 2 diabetes. The Company also announced full enrollment in the LIBERATE-1 study, which was achieved in just four weeks after enrollment of the first subject, signaling early potential interest for thissix-month, subdermal GLP-1 implant and reaffirming previous estimates that top-line results should be available in mid-2025.

Liquidity and Capital Resources

From inception, our operations have been funded primarily through the sales of our common stock and warrants.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are subject to the risks and uncertainties associated with a business withno revenue that is developing novel medical devices, including limitations on our operating capital resources. We have incurred recurring operating losses and negative operating cash flows since inception, and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future.

For additional information, refer to Note 7. Equity Securities of the Notes to Condensed Consolidated Financial Statements and Note 14 Subsequent Eventin this Quarterly Report on Form 10-Q.

We estimate that currently available cash will provide sufficient funds to enable the Company to meet its planned obligationsfor at least the next twelve months. Our ability to continue as a going concern is dependent on our ability to develop profitable operations through implementation of our business initiatives and/or raise additional capital, however, there can be no assurances that we will be able to do so.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In our opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial position and our results of operations and cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended December 31, 2024, included within our Annual Report on Form 10-K filed with the SEC on March 31, 2025. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during thereporting periods. On an ongoing basis, management evaluates its estimates, including, but not limited to, those related toassumptions used in accruals for potential liabilities, valuing equity instruments, stock-based compensation and evaluation of going concern. Management bases its estimates on historical experience and on various assumptions that management believes to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Operating Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. Our chief operating decision-maker, our Chief Executive Officer, reviews financial information presented for each of our segments. We havetwo reporting segments, specifically the Biopharm Division and Neurostimulation Division. Neither division is revenue producing. The Biopharm Division includes activities from NPM and Vivani Medical Australia Pty Ltd. The Neurostimulation Division includes activities from Cortigent and our subsidiary in Switzerland.

The Company’s long-term assets are located in the United States.

Significant Accounting Policies

Our significant accounting policies are set forth in our financial statements for the year ended December 31, 2024, included within our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 31, 2025.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update No. 2024-03Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”), which will improve the disclosures about a public business entity’s expenses and requires detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions such as cost of sales, selling, general and administrative, and research and development on the face of the income statement. ASU 2024-03 is effective for the Company or fiscal years beginning on January 1, 2027, and for interim periods within fiscal years beginning on January 1, 2028. Early adoption is permitted. The guidance may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and continues to evaluate disclosure presentation alternatives.

In December 2023, the FASB issued ASU No.2023-09,Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

Note 3. Concentration of Risk

Credit Risk

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

Foreign Operations

The accompanying condensed consolidated financial statements as of March 31, 2025 and 2024 include assets amounting to approximately$26,000 and $26,000, respectively, relating to our operations in Switzerland. In the fourth quarter of 2023, Vivani Medical Australia Pty Ltd., a wholly owned subsidiary in Australia was established to support studies of our product candidates. The accompanying condensed consolidated financial statements as of March 31, 2025 and 2024 include assets amounting to approximately $557,000 and $21,000, respectively, relating to our operations in Australia. Unanticipated events in foreign countries could disrupt our operations and impair the value of these assets.

Note 4. Fair Value Measurements

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

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

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

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

We determine the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, we perform an analysis of the assets and liabilities at each reporting period end.

Cash equivalents, which include certificates of deposit and money market funds, are the only financial instruments measured and recorded at fair value on our condensed consolidated balance sheet, and are valued using Level 1 inputs. As of March 31, 2025 and 2024, we did not have any Level 1 and Level 2 financial liabilities or Level 3 financial assets or liabilities measured at fair value on a recurring basis. We did not have any transfers between Level 1 and Level 2 or transfers in or out of Level 3 during the three months ended March 31, 2025 and 2024.

The following table summarizes assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Note 5. Insurance Premium Financing

****In September 2024, we entered into a finance agreement with First Insurance Funding in order to fund a portion of our insurance premiums for our professional liability policies. The amount financed is approximately $426,000 and incurs interest at a rate of7.2%. The Company is required to make nine monthly payments of approximately $47,000 throughMay 2025. The outstanding balance as ofMarch 31, 2025 **was approximately $**95,000 and is included in accrued expenses in the accompanying condensed consolidated balance sheet.

Note 6. Selected Balance Sheet Detail

Property and Equipment, Net

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

Note 7. Equity Securities

We are authorized to issue 300,000,000 shares of common stock with 59,243,903 issued and outstanding as of March 31, 2025. In addition, we are authorized to issue 10,000,000 shares of preferred stock with none issued as of March 31, 2025.

Securities Purchase Agreement

On March 1, 2024, the Company entered into a securities purchase agreement (“Securities Purchase Agreement”) with an institutional investor to purchase 3,947,368 shares of common stock, par value $0.0001 per share (the “Common Stock”) and warrants to purchase up to an aggregate of 3,947,368 shares of common stock at a purchase price of $3.80 per share and accompanying warrant in a registered direct offering (the “Offering”). The warrants have an exercise price of $3.80 per share, are exercisable immediately upon issuance, and will expire three years following the date of issuance. The Company also entered into a Placement Agency Agreement with Maxim Group LLC (“Maxim” and such agreement, the “Placement Agency Agreement,” and together with the Securities Purchase Agreement, the “Agreements”), who acted as the sole placement agent for the Offering. In connection with the Placement Agency Agreement, the Company agreed to pay Maxim an aggregate cash fee of 7.0% of the aggregate proceeds raised from the sale and issuance of the shares of common stock and accompanying warrants. Pursuant to the Placement Agency Agreement, the Company also agreed to reimburse Maxim up to $65,000 for its legal expenses. The gross proceeds of $15.0 million from the Offering, before paying the placement agent fees and other estimated offering costs, were received on March 5, 2024. In connection with the Securities Purchase Agreement, the Company paid issuance costs of $1.3 million, resulting in net proceeds of $13.7 million.

The Sales Agreement

On April 22, 2024, the Company entered into an Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company may offer and sell, from time to time at its sole discretion, shares of the common stock, having an aggregate offering price of up to $75.0 million through Jefferies as its sales agent. Also on April 22, 2024, the Company filed a Registration Statement on Form S-3, which was declared effective on May 3, 2024, including a sales agreement prospectus relating to the offering of up to $75.0 million shares of its common stock in accordance with the Sales Agreement.

The Company may sell the common stock under the Sales Agreement (A) in privately negotiated transactions; (B) as block transactions; or (C) by any other method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Capital Market or sales made into any other existing trading market for the shares of Common Stock. Jefferies will use commercially reasonable efforts to place the shares of common stock from time to time, based upon the Company's instructions (including any price, time or size limits or other customary parameters or conditions we may impose). The Company will pay Jefferies a commission of up tothree percent (3.0%) of the gross sales proceeds of any common stock sold through Jefferies under the Sales Agreement, and also has provided Jefferies with customary indemnification rights. In addition, the Company has agreed to reimburse certain legal expenses and fees incurred by Jefferies in connection with the offering.

The Company is not obligated to make any sales of common stock under the Sales Agreement. The offering of shares of common stock pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the Sales Agreement or (ii) termination of the Sales Agreement in accordance with its terms.

During thethree months ended March 31, 2025, the Company issued 9,215 shares of common stock for gross proceeds of $10,000 as part of the Sales Agreement with Jefferies. The Company paid expenses of $37,000, resulting in negative net proceeds of $28,000.

2024 Private Sale Transaction

On November 8, 2024, the Company entered into a private sale transaction withone of its directors whereby the Company sold an aggregate of 3,968,253 shares of the Company’s common stock to the director at a price of $1.26 per share, which was the lower of the closing price of the Company’s common stock on the Nasdaq or the 5-day average closing price of the Company’s common stock on the Nasdaq, each immediately prior to the closing date, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the private sale transaction. The gross proceeds from this private sale transaction were $5.0 million.

2025 Private Sale Transaction

On March 26, 2025, the Company entered into a share purchase agreement with an entity affiliated withone of its directors whereby the Company shall sell an aggregate of 7,366,071 shares of the Company’s common stock to the entity, in five closings as provided in the purchase agreement, at a price of $1.12 per share, which was the closing price of the Company’s common stock on the Nasdaq, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the share purchase agreement. The gross proceeds from this share purchase agreement will be approximately $8.25 million. The Company has concluded that the share purchase agreement is classified equity instruments since it does not contain any (i) exercise contingencies based on observable markets or indices besides those related to the market for the Company’s own stock price and operations and (ii) settlement provisions that would preclude the share purchase agreement from being indexed to the Company’s own stock. The share purchase agreement also does not contain any provisions that would preclude equity classification under ASC 815-40. The Company will record the proceeds from the share purchase agreement in equity upon the issuance of the underlying common stock.

Note 8. Warrants

A summary of warrant activity for thethree months ended March 31, 2025 is presented below (in thousands, except per share and contractual life data).

NPM, prior to the merger with Second Sight, issued common stock and warrants (collectively, the “unit” or “units”) in 2019,2020 and 2021 for $3.15 per unit. Outstanding warrants to purchase common stock are shown in the table above and generally expire five years from the date of issuance at $3.15 per share exercise price are transferable intoone share of common stock and may be exercised on a cashless basis.

In connection with the Securities Purchase Agreement entered on March 1, 2024, relating to the issuance of 3,947,368 shares of the common stock, par value of $0.0001 per share, the Company issued Warrants to purchase 3,947,368 shares of common stock at an exercise price of $3.80 per share. These Warrants are exercisable immediately upon issuance and will expire three years following the date of issuance. The Warrants may be exercised on a cashless basis.

The warrants outstanding as of March 31, 2025 hadno intrinsic value.

Note 9. Stock-Based Compensation

Equity Incentive Plan

The Vivani Medical, Inc.2022 Omnibus Incentive Plan (the “2022 Plan”) became effective on August 30, 2022. Under the 2022 Plan,10,033,333 shares were authorized for issuance at its effective date. The maximum number of shares with respect to which stock awards could be granted is offset and reduced by stock awards previously granted under the 2022 Plan. As of March 31, 2025, 1,923,993 shares of common stock were available for future issuance under the 2022 Plan pursuant to stock awards that had not previously been granted.

For stock option grants, the option price is determined by the Board of Directors but cannot be less than the fair value of the shares at the grant date. Generally, theoptions vest ratably over four years and expireten years from the grant date. The 2022 Plan provides for accelerated vesting if there is a change of control, as defined in the 2022 Plan.

Stock Options

A summary of stock option activity is presented below (in thousands, except per share and contractual life data).

The estimated aggregate intrinsic value of stock options exercisable as of March 31, 2025 was immaterial.

Restricted Stock Units (RSUs)

A summary of restricted stock activity and related information (in thousands, except per share data):

During thethree months ended March 31, 2024, the Company granted 402,500 RSUs, subject to market conditions which required our stock price to exceed $3.15 per share forthree consecutive days in thefour years from grant date for the RSUs to vest. Upon achievement of the market condition, one-third of the award will vest, and thereafter, one-third of the award will vest on the first and second anniversary of the achievement date, subject to the recipient’s continued service through each applicable vesting date.

Stock-Based Compensation Expense

The following table summarizes total stock-based compensation expense for stock options and RSUs, which is included in the statements of operations (in thousands):

As of March 31, 2025, there was $1.8 million of total unrecognized stock-based compensation expense related to outstanding stock options that will be recognized over a weighted average period of 1.2 years. As of March 31, 2025, there was$0.2 million of total unrecognized compensation expense related to outstanding RSUs that will be recognized over a weighted average period of 0.7 year.

Stock Options

During thethree months ended March 31, 2025, we granted stock options to purchase 256,215 shares of common stock to certain employees and board members. The options are exercisable for a period often years from the date of grant at a weighted average price of $1.13 per share, which was calculated at the fair value of our common stock on the respective grant date. The options generally vest over a period offour years.

Stock Options (Service Vesting)

During thethree months ended March 31, 2025,256,215 stock options subject to service vesting, were issued and valued at $0.2 million using the Black-Scholes option-pricing model. During thethree months ended March 31, 2024,59,014 stock options subject to service vesting, were issued and valued at $0.1 million using the Black-Scholes option-pricing model. The calculated value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions.

Note 10. Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss by the sum of the weighted average number of shares of common stock outstanding during the period plus the dilutive effects of potentially dilutive securities outstanding during the period. Potentially dilutive securities include common stock options, RSUs and warrants issued and outstanding.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods presented, as the inclusion of all potential common stock equivalents outstanding would have been antidilutive.

During the periods ended March 31, 2025 and 2024, the following common stock equivalents were excluded from the computation of diluted net loss per share because including them would have been antidilutive (in thousands).

Note 11. Right-of-use Assets and Operating Lease Liabilities

We lease certain office, laboratory, research and development space for our use. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Operating lease cost for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses on the consolidated statements of operations and comprehensive loss. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. As most of our leases do not provide an implicit rate, we used our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

On November 21, 2022, Vivani entered into a triple net lease agreement for a single building with 43,645 square feet of space in Alameda, California. The stated term of the lease commenced on June 1, 2023 and terminates on September 30, 2033, ten years and four months. The lease term is based on the non-cancellable period in the lease agreement. There are two options to extend the lease, each for a term of five years; however, the extension options were not included in the measurement of the ROU asset and lease liability since it is not reasonably certain that the Company will exercise such extension options. Payments increase annually from $2,676,311 to $3,596,784, or 124 monthly payments less the first four which are abated, totaling approximately $31.0 million. Vivani is responsible for insurance, property taxes and common area maintenance charges. Vivani deposited $1.3 million to guarantee a letter of credit to secure the lease and this amount is recorded as restricted cash, long-term on the balance sheets as of March 31, 2025 and December 31, 2024.

On February 1, 2023, we entered into a lease agreement, effective March 1, 2023, to sublease office space to replace Cortigent’sexisting headquarters. Our rental payments amount to $22,158 per month plus operating expenses, tolease 14,823 square feet of office space at 27200 Tourney Road, Valencia, California 91355. The sublease has a term of two years and two months. The sublease expires on April 30, 2025. We also entered into a lease for storage space on January 25, 2023, in the same building at a cost of $6,775 per month for a term of two years and one month. The lease expires on March 31, 2025. We did not renew the current office lease. However we entered into another lease in the same building for a smaller space at a cost of $1,700 per month for six months. We renewed the lease of the storage unit. These new and renewal leases will be short-term leases with immaterial monthly costs.

On July 3, 2024, we entered into a short-term sublease agreement for access to manufacturing facility with an extension option that is not expected to be exercised. The sublease expires on June 30, 2025.

The following table summarizes supplemental balance sheet information related to the Company’s operating leases (in thousands):

Operating lease cost was $0.8 million and $0.8 million during thethree months ended March 31, 2025 and 2024, respectively.

Variable lease cost, comprising primarily of common area maintenance charges and taxes, for the operating lease was $0.2 million and $0.1 million during thethree months ended March 31, 2025 and 2024, respectively.

The following table summarizes a maturity analysis of our lease liabilities showing the aggregate lease payments as of March 31, 2025 (in thousands except weighted average data):

Other information related to leases are as follows (in thousands):

Note 12. Commitments and Contingencies

Indemnification Agreements

We maintain indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law.

Clinical Trial Agreements

Based upon FDA approval of Argus II, which was obtained in February 2013, we were required to collect follow-up data from subjects enrolled in our pre-approval trial for a period of up to ten years post-implant, which was extended through the year 2019. This requirement to collect follow-up data was halted in 2020 with FDA approval. In addition, we conducted three post-market studies to comply with U.S. FDA, French, and European post-market surveillance regulations and requirements and are conducting an early feasibility clinical study of Orion. We have contracted with various universities, hospitals, and medical practices to provide these services. Payments are based on procedures performed for each subject and are charged to clinical and regulatory expense as incurred. Total amounts expensed during thethree months ended March 31, 2025 and 2024 were $35,000 and $6,000.

Litigation, Claims and Assessments

One opposition filed by Pixium Vision SA (“Pixium”) was pending in the European Patent Office challenging the validity of a European patent owned by Cortigent. We decided to allow the patent to be abandoned by the EPO, which occurred in February 2025. As a result, this opposition is no longer pending. While this abandonment could impact our ability to protect Cortigent’s neurostimulation technology in Europe related to this patent, we do not believe that it will have a material effect on our ability to manufacture and sell our products, or otherwise have a material effect on Cortigent’s operations.

As described in the Company’s 10-K for the year ended December 31, 2020, the Company had entered into a Memorandum of Understanding (“MOU”) for a proposed business combination with Pixium. In response to a press release by Pixium dated March 24, 2021, and subsequent communications between us and Pixium, our Board of Directors determined that the business combination with Pixium was not in the best interest of our shareholders. On April 1, 2021, we gave notice to Pixium that we were terminating the MOU between the parties and seeking an amicable resolution of termination amounts that may be due, however no assurance can be given that an amicable resolution will be reached. We accrued $1,000,000 of liquidated damages as contemplated by the MOU in accounts payable as of March 31, 2021 and remitted that amount to Pixium in April 2021. Pixium indicated that it considered this termination wrongful, rejected the Company’s offers, but retained the $1,000,000 payment. On May 19, 2021, Pixium filed suit in the Paris Commercial Court, and currently claim damages of approximately €5.1 million or about $5.6 million. We believe we have fulfilled our obligations to Pixium with the liquidated damages payment of $1,000,000. On December 8, 2022, the Company received notice that the Paris Commercial Court has rendered its judgment, including finding that the Company’s termination of the MOU was not valid. In the judgment, the Company was ordered to pay to Pixium the amount of €2,500,000 minus a €947,780 credit for the $1,000,000 already paid for, a net amount payable of approximately €1,552,220. On May 24, 2023, the Company filed an appeal against the judgment from the Paris Commercial Court except in so far as such prior judgment dismissed (i) Pixium’s claim for the Company to pay it a sum of €480,693 relating to the alleged time spent by its teams, (ii) Pixium’s application to order the Company to pay it a sum of €1,500,000 in respect to alleged loss of opportunity and (iii) deducted the sum of $1,000,000 that we already paid Pixium and which Pixium retained converted into euros at the date of the judgment. Thereafter Pixium filed its brief with Paris Court of Appeal and filed a cross-appeal on January 18, 2024. Meanwhile, the Company received notice that the Paris Commercial Court had opened safeguard proceedings against Pixium by judgment dated October 9, 2023, then in its judgment dated November 13, 2023, converted safeguard proceedings into receivership, and in its judgment dated January 31, 2024, converted Pixium’s receivership proceedings to liquidation proceedings, the transfer plan being rejected. As a result, Pixium’s liquidator intervened on behalf of Pixium in the pending proceedings before the Paris Court of Appeal and filed its brief on March 21, 2024. The Company filed its brief in reply with the Paris Court of Appeal on April 17, 2024. Proceedings before the Paris Court of Appeal are pending. In parallel, since the Company has failed to enforce the judgment, Pixium has requested the pre-trial judge to strike out the Company's appeal for failure to enforce the judgment. The hearing took place on June 4, 2024 and on October 23, 2024, the pre-trial judge issued his order, striking out Vivani's appeal for failure to enforce the decision. Within two years, Vivani will have to request that the case be reinstated on the court's docket, providing evidence that the judgment has been fully enforced or, at the very least, that an agreement has been reached. Failing this, the appeal proceedings will lapse.

The Company recorded a charge of $1,675,000 for the year ended December 31, 2022, related to this matter but plans to continue its appeal against the preliminary judgment.

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

Note 13. Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available for evaluation by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company hastwo operating and reporting segments, the Biopharm Division and the Neuromodulation Division. The Company’s CODM is its Chief Executive Officer who reviews the Company between Biopharm and Neuromodulation divisions. Our primary focus is the Biopharm Division. We are trying to spin off the Neuromodulation Division. The measure of segment loss is reported on the Consolidated Statements of Operations and Comprehensive Loss as net loss. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets.

The Company has not generated any product revenue to date. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it is a clinical stage biopharmaceutical company.

During the three months ended March 31, 2025, the Biopharm Division and Neurostimulation Division incurred operating expenses of $6.0 million and $0.6 million, respectively. During the three months ended March 31, 2025, consolidated net loss for the Biopharm Division was $5.6 million and for the Neurostimulation Division was $0.7 million.

As of March 31, 2025, total assets for the Biopharm Division and the Neurostimulation Division were $34.7 million and $0.7 million, respectively.

The following table provides information related to our operating segments based upon the Company's net loss for the three months ended March 31, 2025 and 2024 (in thousands):

Note 14. Subsequent Event

The Company evaluated subsequent events for recognition and disclosure through the date the financial statements were issued or filed. Nothing has occurred outside normal operations that required recognition or disclosure in these financial statements except as follows:

Private Sale Transaction

On May 12, 2025, the Company entered into a share purchase agreement with an entity affiliated withone of its directors whereby the Company shall sell an aggregate of 2,912,621 shares of the Company’s common stock to the entity, in two closings as provided in the share purchase agreement, at a price of $1.03 per share, which was the closing price of the Company’s common stock on the Nasdaq on May 12, 2025, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the share purchase agreement. The gross proceeds from this private sale transaction will be approximately $3.0 million.

**Item 2.