Greetings, and welcome to the Second Sight Third Quarter 2019 Results Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, November 14, 2019.I would now like to turn the conference over to Lisa Wilson, Investor Relations for Second Sight. Please, go ahead.

Thank you, Eric. Good afternoon, and welcome to Second Sight’s Third Quarter 2019 Results Call. This is Lisa Wilson of In-Site Communications Investor Relations for Second Sight. With me on today’s call are Will McGuire, President and Chief Executive Officer; and John Blake, Chief Financial Officer of Second Sight. At the close of market, the Company issued a press release detailing financial results for the three months ended June 30, 2019. The press release can be accessed through the Investor Relations section of the Second Sight website at secondsight.com. You can also access the webcast of this call from there.Before we get started, I would like to remind everyone that any statements made on today’s conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the Company’s future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Second Sight management as of today and involve risks and uncertainties, including those noted in this afternoon’s press release and Second Sight’s filings with the SEC. Such forward-looking statements are not guarantees of future performance.Actual results may differ materially from those projected in the forward-looking statements. Second Sight specifically [audio gap] to Second Sight’s CEO, Will McGuire.

Thank you, Lisa. Good afternoon, everyone and thank you for joining our call today. Today I’ll share updates on the current status of the patients and our early feasibility study. Our engagement with the FDA as we progressed toward a pivotal trial, the various research and development programs underway for future enhancements to the Orion user experience and the reimbursement landscape for Orion.We continue to make good progress building out our Orion platform on all fronts and remain focused on advancing our clinical and research and development program. During this quarter, we completed another pre-submission to the FDA as part of the Breakthrough Devices Program and we have had ongoing discussions with the agent to reach consensus on the design of the pivotal trial for Orion.Let me begin with a brief update on our early feasibility study, which as many of you know is being conducted in the US at the Ronald Reagan UCLA Medical Center in Los Angeles and at the Baylor College of Medicine in Houston. In October, we shared additional positive data from the early feasibility study at a number of important conferences and scientific forums including the American Academy of Ophthalmology, the Congress of Neurologic Surgeons and the Society for Neuroscience. These presentations have been very well received and there’s growing interest by key opinion leaders in the scientific community and Orion’s ability to provide useful, artificial vision to profoundly blind individuals including those blind from retinitis pigmentosa, diabetic retinopathy, glaucoma, optic nerve disease and eye injury.Let me share just a few of the top line results from the study to-date that includes 12 month results for five of the six subjects and six months results for the sixth subject. First, we have a good safety profile. Two subjects experienced a total of six adverse events or AEs related to the device or to the surgery over this time period. One was considered a serious adverse event or SAE. In all of the adverse events where any expected category. The one SAE was resolved quickly and did not require a hospital stay and let me note that the greatest concern from this subject was that he wanted to remain in the study and he has.Second, the efficacy data is also quite encouraging. Here we look at three measures of visual function. The first is square localization where Orion subjects sit in front of a touch screen and are asked to touch within the boundaries of square when it appears. The second, the direction emotion where subjects are asked to identify the direction of motion. The direction and motion of lines on a screen. The third is grading visual acuity, a measure of visual acuity that is adapted for very low vision.On square localization five of the six subjects in our feasibility study perform symmetrically better with the system on then off. On direction of motion, all six performed better on then off. In a grading visual acuity, three has measurable visual acuity on the scale of this test with the device on versus none who can do it with the device off. The final efficacy measurement and perhaps the most important the one we call FLORA which stands for Functional Low Vision Observer Rated Assessment. This is an assessment performed by an independent third party low vision orientation and mobility specialist who spends time with each subject in their home. The specialist asks each subject a series of questions and also observes them performing 15 or more daily living task such as finding light sources, following a side walk or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral or if it actually hurting the ability to perform this task. We’re thrilled to report that all five subjects who’ve reached the 12-month mark are receiving measurable benefit per the FLORA assessment.Before discussing our FDA conversations, I’d like to note that in October 2019, we observed a loss of most perception from the device with the sixth subject. Though there is no indication of a medical adverse event or a device defect. The most recent testing session with this subject showed improved perception. We’re currently investigating the possible causes for these changes which may or may not be device related, it may or may not be permanent. We plan to keep everyone updated as to status of this subject in future calls and updates.We continue to be actively engaged in discussions with the FDA regarding the clinical and regulatory path. As I mentioned last quarter, we’re considering two potential paths for Orion. The first track is PMA or Premarket approval, the second option under consideration would involve first obtaining a humanitarian device exemption approval followed by a PMA approval. To-date our efforts with the FDA remain focused on PMA which is our preferred track.I’m pleased to inform you, that we’ve reached agreement with the FDA regarding the primary efficacy endpoint for the pivotal trial. Efficacy will be assessed with an instrument we have developed for this purpose pending successful validation of the instrument in early 2020. We believe the new endpoint; a revised version of the FLORA is appropriate for demonstrating the real world impact of the Orion technology. We’re now focusing our attention on the primary safety endpoint and hope to reach agreement with the FDA by the end of the year.Turning now to R&D, our current work on Orion is focused on iterations to the current design required for pivotal trial and ultimately for commercialization. Improvements to implant include reducing the thickness of the electronics case and improving impact resistance. Improvement to the externals include ergonomics, aesthetics and robustness. None of the proposed changes to the implant or externals impact functionality. We expect this R&D work to be completed in the second half 2020. Our expectation is that the majority of the pivotal trial patients if not all, will be implanted with the improved Orion implant and externals.We have other exciting research projects underway that are aimed at enhancing the user experience. In each case, we’re working with a partner to evaluate the technology and ultimately integrate it within our system, so that the patients can use their artificial vision optimally. These technologies which have been discussed in past calls includes image processing filters that would selectively isolate human faces or specific objects, thermal imaging that would only stimulate the [indiscernible] when a warrant object is in the view of the sensor. Depth-based decluttering that would only focus on images that are within a certain distance and eye tracking which could allow users to scan individual space with their eyes rather than by moving their heads.Additionally, on October 1 we announced that we received a $2.4 million, 4-year grant from the NIH or National Institutes of Health to develop Spatial Localization and Mapping Technology known as SLAM. This exciting initiative is a joint collaboration with the John Hopkins University Applied Physics Laboratory or APL and it is intended to speed the integration of SLAM into future generations of Orion. The goal is to give Orion users the ability to localize objects and navigate landmarks in unfamiliar surroundings in real-time.One day, users may have the ability to save and load maps of different environment like the grocery store, fitness center or doctor’s office on demand to help them navigate through daily life. Such advancement could be a real game changer for blind individuals who seek to gain independence that reconnect to the world using our technology.Let me turn now to reimbursement, in its fiscal year 2020 Inpatient Prospective Payment System or IPPS final rule. CMS finalize this proposal to create an alternate payment pathway for innovative technologies within FDA breakthrough device designation such as Orion. This is a significant step in improving patient access to transformative devices it could shorten the path to reimbursement for Orion and improve our ability to commercialize once approved.While CMS has certainly made great progress on refining, coding and payment pathways for innovative technologies, the coverage process is still not fully addressed. Fortunately [ph] there are two pieces of legislation being proposed HR 5997 and S 2326 that would address coverage for breakthrough devices. And our efforts to advocate for reimbursement of breakthrough devices, we recently spent a day on Capitol Hill with the Avamed [ph] team and Orion study participant discussing the importance of reimbursement certainty to the development of innovative medical technologies such as Orion.Additionally, we recently had the first of what will likely be a series of meetings with CMS to discuss the possible future reimbursement pathway to the critically important post-surgical training for Orion users. This artificial vision rehabilitation and training is instrumental in allowing users to achieve the greatest benefit by thoroughly understanding how to interpret the pixilated life that they perceive. Through onsite training, we’ve moved patients to greater independence while enhancing their visual interactivity, with people, places and important daily activities. We’re therefore advocating with CMS the potential to have a clear reimbursement path for the surgical procedure, the programming of the device and the follow-up training of rehab.In addition to our engagement with CMS on reimbursement, we’re also in discussions with private payers to understand their requirements and expectations for data supporting the reimbursement of Orion. We expect a large portion of the Orion population will have private instruments coverage given the younger average age of Orion patient candidates. Our readiness for private payers will be a critical component as we commercialize in a significantly larger market.Turning now to Argus II, as previously stated our Argus implanting centers have been notified of our intent to stop manufacturing the product over the course of the year. In the most recent quarter, we implanted four Argus II devices at two centers. In the fourth quarter of this year, we plan to submit Argus II S our next generation externals to the FDA for US Regulatory approval. These includes upgrades to the glasses, camera and the VPU and will render Argus a more powerful device and a better platform to do testing on some of the other technologies mentioned earlier.All of us at Second Sight are thrilled with the progress we’re making on the powerful technology as we pursue a $1 billion plus market opportunity to help almost all profoundly blind individuals. I’m also pleased that our efforts are starting to garner widespread interest in the scientific community as well as media coverage including a segment on CBS this morning that aired on September 18.Finally, I’d like to thank my team mates at Second Sight for their unwavering dedication and our investors for their continued support. With that, John will now review our third quarter, 2019 financial results. John?

Thanks Will. Our financial results for the third quarter are in line with expectations – organizational focus to Orion. Net sales were $0.5 million in the third quarter of 2019 compared to $2.2 million in the same period in 2018. Revenue was recognized for four implants on a GAAP basis with an average selling price or ASP of $118,000 in the third quarter of 2019 compared with 22 devices with an ASP of $102,000 in the same period of 2018. We expect our net sales to decline as we sell through our existing inventory of Argus II.Research and development expense was $3.4 million in the third quarter of 2019 compared to $2.7 million in the third quarter of 2018. The increase primarily reflects cost to make Orion prototypes. We expect our research and development expenses to increase as we accelerate our transition to the Orion platform including cost previously related to product activities such as facilities and personnel that will be transitioning to the Orion development activities.Clinical and regulatory expense decreased slightly from $1 million in the third quarter of 2018 to $0.9 million in the third quarter of 2019. This decrease is attributable to decrease cost associated with the Orion early feasibility study. We expect clinical and regulatory cost to increase in the future as we conduct additional clinical trials for Orion and related enhancements to our user experience.Selling and marketing expense was $1.3 million in the third quarter of 2019 compared to $3 million in the third quarter of 2018, a 57% reduction year-over-year due to our commercial restructuring efforts that remain on track. We continue to expect selling and marketing expense to decrease as we reduce our Argus II commercial activities and sell through our existing inventory.General and administrative expense was $2.2 million in the third quarter of 2019 compared to $2.3 million in the third quarter of 2018 and is expected to remain consistent for the remainder of 2019. As of September 30, 2019 we had cash and cash equivalence of $18.5 million. Our cash burn for the third quarter of 2019 was $6.7 million and we continue to expect our cash on hand to fund operations into the second quarter of 2020.With respect to our $1 bid price compliance with NASDAQ. Our deadline to comply is January 20, 2020. In order to maintain our NASDAQ listing we must attain a closing price of $1 per share higher for 10 consecutive days or implement a reverse split of our common stock. Our board has not made an affirmative decision with respect to our plans to regain compliance and we will provide an update once the decision has been made.With that, I’ll open the call to questions. Operator please go ahead with the instructions.

[Operator Instructions] And our first question comes from the line of Amit Dayal with H.C. Wainwright. Please go ahead.

Can you talk a little about this new FLORA criteria versus what the old FLORA was?

Amit, this is Will. Thanks for the question. I’ll be glad to address that. So the original FLORA was used for the Argus, it was in the Argus clinical trial. It’s also been used as an endpoint in some post market studies specifically in France for a reimbursement study there and it had three parts, so it had an in-depth interview, they had an observer, they had observer rated task and then had a case study narrative and all three of these were completed by this independent third party observer or low vision specialist and what we’ve done with the revised FLORA, is we’ve taken all the warning over the years and now we’re really just focused in on the observer related functional vision task section. So what it will entail, is a certain number of task that the Orion user will be required to do and this independent observer would observe them performing these task and then give a rating as to how well they performed the task with and without the system and then given [indiscernible] on the benefit, either it’s – it provides benefit, it’s neutral or it actually makes it more difficult.Again, we chose this because we think that’s the most important measures because it’s really measuring the impact of our technology when how someone goes about their daily life and then also, this section of it is important because it’s possible to actually validate the instrument and the validation is also very important to the FDA because among other things, it ensures that multiple independent experts can administer the tool and then provide consistent measurements of the technologies impact.So again it’s – it’s taken one out of the three sections of the original FLORA kind of expands on that section and then we go through a validation process with that section and in the end, we think we’re going to be able to accurately measure the impact of our technology on the users, how they go about their daily life and we also think that, by validating that. We can prove that, multiple people can perform this assessment and come up with the same answer. Hopefully, that helps in it.

Yes, that was definitely very helpful. So this was just to clarify design in consultation with the FDA, right?

Yes. So we designed it. The original FLORA was designed I think in consultation with the FDA as well, so it was something that they requested early on with or at some point with Argus to demonstrate the benefit to patients as they go at their daily life and then in this case, it’s something we developed and we went through a series of discussions with the FDA, to refine the tool, answer the questions and also to kind of refine what the validation would look like so that they’re comfortable not only with the measurement and the tool, but then how we’re going to perceive with the validation to show that we can get consistent results from different observers.And specifically what happened is, we went through this process with the FDA and basically got written agreement with the FDA that we can use this as a primary endpoint and it will go through a certain validation to use it and then also as we mention in the prepared remarks, what we’re doing in – I mean as we kind of go in serial. So we got the efficacy endpoint now resolved and we feel very good about it. We feel very good about this tool, accurately reflecting the benefit we provide and now, we’re going through a similar process on the safety endpoint and so we’ll be going back and forth with the FDA and hopefully before the end of this year, we have a similar resolution where we jointly agree on what the safety endpoint would be and at that point, we can also communicate that to you and others.

All right and then just based on sort of these subjects that are already undergoing all of this. I mean, with this set of criteria, are they performing [indiscernible] expectations under this new FLORA criteria?

They are and we haven’t assessed them directly against the new FLORA. But as we’ve talked, we have obsessed the first five subjects at the 12-month mark versus the current FLORA and they all have performed very well. I think we had one that rated a mild positive as far as the impact of the technology on their ability to go about their daily life and the other four were a strong positive or just a positive. So all five at the 12-month mark looked really good using the current FLORA tool. And our expectation is that, all five would look good with the new FLORA as well, but again we haven’t performed that study yet or that test.

Understood. So now you’re expecting the safety endpoints to be finalized by the end of the year and once that is done, do you start enrolling or recruiting patients? And then, how many patients – can you remind us how big this trial will be?

Yes, good question. So once we get the safety endpoint resolved. The next step for us then will be to – I think once we get efficacy and safety those are the two biggest items that we hope to resolve with the FDA or we want to resolve first with the first and again, we would want to communicate that at some point so that everyone understands both efficacy and safety. The other things then would be to get agreement on the overall number of subjects in the pivotal. As we’ve said in the past that you should expect at least 30 I think that’s still fair to say. We don’t think it’s going to be 100 or anything like that but 30 is what we did with Argus and is probably a good starting point for your expectations here. Although we need to – to be really clear we cannot say what that in is going to be until we decide and agree with FDA on what the safety endpoint is because it will drive that number then we have to finalize what is the duration of follow-up, are there any secondary efficacy or safety endpoints that we would want to collect. We need to confirm that the bench testing and other pre-clinical plans that we have in place are sufficient and that, there’s not anything else there that will be required before we hit start the pivotal.We’ll also work through before we start the pivotal or what are the post market study requirements and what would we collect upon regulatory approval to give further data and further comforted FDA and most likely to use for reimbursement as well. And then finally, we do want to have further discussion with the FDA about, if we collect additional data with the current iteration of Orion, so not the improved versions. Could we leverage some of that data for the ultimate regulatory approval of the newer generation Orion.So those are the things that have to be done and if you look ahead. I mean the one thing that we’ve said is, that we don’t exactly know yet when we would start the pivotal trial design. But one thing that we do need to do is complete the work on the improved version of the Orion as we mentioned in the remarks and that won’t be complete until sometime in the second half of 2020 which means we could not enroll patients in a pivotal trial with this improved version until at the best late 2020.We also as mentioned would have to spend the first half of 2020 doing the validation of this new FLORA tool for efficacy. And the one thing that we could do and we haven’t made a decision on this submit and we have not discussed with the FDA. But we could make the decision to expand the early feasibility study sometime in 2020 and collect additional data there, that would potentially support the pivotal study data that we would collect and it would also I think reduce some risk with the pivotal trial later just having additional patients. So we think it would be a good thing, but again we haven’t worked through that and we haven’t gone to the FDA to seek approval for that yet. Okay?

Understood. Thank you, Will. I appreciate all the color. I’ll step back in the queue. Thank you.

Great. Thank you.

[Operator Instructions] our next question comes from the line of Kyle Bowser [ph] with Sidoti and Company. Please go ahead. Q –Unidentified Participant: Just a little bit about the reimbursement strategy down the road for Orion. Obviously, you had to breakthrough designation and you talked about – being able to potentially have reimbursement for each part. So the implant programming and follow up and rehab. How does this work with Argus II I’m guessing with just the implant, but how did you get around that and whether the gaining factor or not to have the separate reimbursements for the rehab and programming part?

This is Will. I’ll take that. Short answer, yes it was a problem. When we got Argus approval, we had a payment and we had [indiscernible] established early on. We did not have coverage and what we had to do, is we had to start going MAC by MAC, so Medicare Administrative Contractor. There’s 12 regions and I think maybe eight contractors now and we had to MAC by MAC to get a positive coverage decision and – but three or four years into it. We still had four regions where we did not have coverage and so it’s a bit of like a ground war trying to get these coverage MAC by MAC. So it definitely slows down your commercialization. It interjects a lot of uncertainty into the reimbursement equation and many centers are very hesitant to proceed with a program with the uncertainty around reimbursement and the ones that did proceed, we proceed with caution and they may only do one case at the most, maybe two cases and then they would wait and sometimes they would wait, six months or nine months or even 12 months to get reimbursement before they would continue. So it did slow us down and it was something we had to dedicate quite a bit of resources too.Now with Orion, the way we’re approaching Orion and kind of with the landscape out there and just one other things. When we first launched or when we did get a coverage decision to your point. The actual device and related surgical procedure were covered. We did not have coverage for the programming nor did we have coverage for the artificial vision training or rehab and those two include to be issues as well. Anything that has to be done, it requires resources that’s not reimbursement can be an issue for you.Now overtime we did get coverage for the programming and reprogramming procedures as of today, there’s still no coverage for the artificial vision training. So what we’re doing now is a couple of things, number one as you know there’s some as we stated CMS has put things in place that would give automatic payment and coding to FDA designated devices upon approval, so that’s a good head start right there. What’s not included right now in the CMS Regulations will be the coverage piece and so, as we mentioned we have been advocating for the coverage piece via visits to Capitol Hill meeting with sometimes with representatives, sometimes with Senators most time with their staffers and talking about the importance of having the coverage piece in place as well and how it allows us to move forward with innovative technologies like Orion.So we cannot say with certainty what will happen, we do think there’s some momentum on Capitol Hill and as I said there’s a couple of bills that would plug the coverage gap and [indiscernible] coverage as well. One of the bills would provide coverage for three years and during that three-year period you would get additional data to support a permanent decision and I think the other bill would provide coverage for four years. So either one would give a time period in which we would collect additional data.As we mentioned, we’re also looking forward in saying yes, we need the procedure and the device covered, yes, we need the actual programming and reprogramming covered. But also, we’re going to really need to have in place reimbursement for the artificial vision training and rehab and so that’s what our specific reason for our last visit to CMS was. I’d say they understood why we were there and we’re starting a process to figure out what path, we follow within CMS and within the government to try to get this reimbursement for the artificial vision training in place by the time we launch Orion.So we expect it to be multiple meetings, it could take place over all of next year it’s hard to say. But I would say on the positive side people understand it. We’ve even had a few conversations with private payers about it, one private payer even stated why would I reimburse the procedure and the device if I’m not going to reimburse the training, it seems like a waste of time of money. So people get it, it’s just going to take us a little bit of time to work through it, Kyle. Q –Unidentified Participant: Got it, no it’s – some comment to scale that you’ll be able to work through both of these the reimbursement and regulatory pathways in parallel. Sorry if I missed it, but can you talk a bit more about – you talked a little bit about – can you talk a little bit more about the new features of the next gen externals Argus II S, maybe more importantly is there demand out there from the existing install base or users for these externals?

Yes good question. I would say, yes. The install base is very much looking forward to seeing some new externals, we introduced because I mean for them it’s going to give them the glasses or more aesthetically pleasing. They look – can more like modern Ray-Ban’s or something like that versus 15-year old Oakley design. So we think more aesthetically pleasing, but also, we think they will be more comfortable and ultimately more powerful which would – additional and more advance software and algorithms to be run on it. So yes there is some anticipation for these out there and we have a lot of users that are looking forward to chance to use them.I’d say that’s – if you look at what’s different new versus old, other than aesthetics, ergonomics and comfort. I mentioned it about the VPU is any times more powerful the much more processing power and the ability to do more complex software and more complex algorithms. I mean what we right now is a bit like a seven, eight, nine or 10-year old laptop with very little processing power that makes it really difficult to all the kind of the modern software and the updated algorithms that we would like to do. So it just gives us a lot more power and lot more flexibility. Q –Unidentified Participant: Okay, that’s helpful. And just lastly here, as you’re ramping up efforts to move forward with clinical on Orion and other initiative. Can you talk a bit more about what your financing strategy is over the next 12 to 24 months? Thanks so much.

Kyle, I’ll take that one. This is John. So just as a reminder in our prepared remarks we affirmed our cash runway into Q2, 2020 and we continue to evaluate all of the options with our board to form a financing although no decision has been made yet. But I can point to historically we’ve raised capital via rights offerings, private placements, our ATM and we’ve also received non-diluted funding through grants including the two NIH grants that we have active today. So we’ll continue to evaluate the propriety of the different forms of financing with our board and we’ll update you in the future. Q –Unidentified Participant: Okay, understood. Thanks for taking the questions and all the updates today.

All right. We have no further questions from the phone at this time. I’ll turn the call back to Will McGuire.

Yes, thanks again for joining us today and before signing off. We’d like to express our sadness at the school shooting in our community this morning. Our thoughts and prayers are with the victims, their families and their friends. Talk to you later.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.