1. Organization and Business Operations Second Sight Medical Products, Inc. (Second Sight, we, us, or the Company) was incorporated in the State of California in 2003. Second Sight develops, manufactures and markets implantable visual prosthetics to enable blind individuals to achieve greater independence. In 2007, Second Sight formed Second Sight Medical Products (Switzerland) Sarl, initially to manage clinical trials for its products in Europe, and later to manage sales and marketing in Europe, the Middle East and Asia-Pacific. As the laws of Switzerland require at least two corporate stockholders, Second Sight Medical Products (Switzerland) Sarl is 99.5% owned directly by us and 0.5% owned by an executive of Second Sight as of September 30, 2018. Accordingly, Second Sight Medical Products (Switzerland) Sarl is considered 100% owned for financial statement purposes and is consolidated with Second Sight for all periods presented. Our current product, the Argus  II retinal prosthesis system (Argus II), entered clinical trials in 2006, received CE Mark approval for marketing and sales in the European Union (EU) in 2011, and received approval by the United States Food and Drug Administration (FDA) for marketing and sales in the United States in 2013. We began selling the Argus II in Europe at the end of 2011, Saudi Arabia in 2012, the United States and Canada in 2014, Turkey in 2015, Iran, Taiwan, South Korea and Russia in 2017, and Singapore in 2018. We are currently developing the Orion  Visual Cortical Prosthesis System (Orion), an implanted cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes, including glaucoma, diabetic retinopathy, optic nerve injury or disease, or forms of cancer and trauma. A feasibility study of the Orion device is currently underway at the Ronald Reagan UCLA Medical Center in Los Angeles (UCLA) and Baylor College of Medicine in Houston (Baylor). Going Concern From inception, our operations have been funded primarily through the sales of our common stock and warrants, as well as from the issuance of convertible debt, research and clinical grants, and limited product revenue generated from the sale of our Argus II product. From 2016, we have funded our business primarily through: ? Issuance of common stock in our rights offering in June 2016, which provided net cash proceeds of $19.5 million. ? Issuance of common stock and warrants in our rights offering in March 2017, which provided net cash proceeds of $19.7 million. ? Issuance of common stock through our At Market Issuance Sales Agreement during the fourth quarter of 2017 and first quarter of 2018, which provided $5.1 million of net cash proceeds. ? Issuance of common stock in a securities purchase agreement in May 2018, which provided net cash proceeds of $10.0 million. ? Issuance of common stock in a securities purchase agreement in August 2018, which provided net cash proceeds of $5.0 million. ? Issuance of common stock in a securities purchase agreement in October 2018, which provided net cash proceeds of $4.0 million. ? Revenue of $5.1 million in the first nine months of 2018, and $8.0 million and $4.0 million, for the years ended December 31, 2017 and 2016, respectively, generated by sales of our Argus II product. We entered into stock purchase agreements on October 18, 2018, August 14, 2018 and May 3, 2018 with entities beneficially owned by Gregg Williams for the purchase of 2,467,727, 3,225,807 and 6,756,757 shares respectively of common stock priced at $1.62, $1.55 and $1.48 per share respectively, the last reported sale price of our common stock on each purchase date. Gregg Williams is the Chairman of our Board of Directors. These placements of common stock provided net proceeds of $4.0 million, $5.0 million and $10.0 million respectively. No warrants or discounts were provided and no placement agent or investment banking fees were incurred in connection with these transactions. The shares issuable to the purchasers under the Securities Purchase Agreements were also issued pursuant to the exemption from registration under Rule 506 of Regulation D. We relied on this exemption from registration based in part on representations made by the purchasers. In November 2017, we entered into an At Market Issuance Sales Agreement (the Sales Agreement) with B. Riley FBR Inc. and H.C. Wainwright &amp; Co., LLC, as agents (Agents) pursuant to which we may offer and sell, from time to time through either of the Agents, shares of our common stock having an aggregate offering price as set forth in the Sales Agreement and a related prospectus supplement filed with the SEC. We agreed to pay the Agents a cash commission of 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement. During January and February 2018, we sold 2.2 million shares of common stock which provided net proceeds of $4.0 million under the Sales Agreement. No shares have been sold since February 2018 under the Sales Agreement. Our financial statements have been presented on the basis that our business is a going concern, 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 with one product line and limited commercial product revenues, including limitations on our operating capital resources and uncertain demand for our products. 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. Management has concluded that there is substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm, in its report on our 2017 consolidated financial statements, has raised substantial doubt about our ability to continue as a going concern. We do not have sufficient funds to support our operations for the next 12 months from the date of issuance of these financial statements. We anticipate that we will seek to fund our operations through public or private equity or debt financings, grants, collaborations, strategic partnerships or other sources. However, we may be unable to raise additional capital or enter into such other arrangements when needed on favorable terms or at all. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization Argus II or any other approved product candidates, or we may be unable to expand our operations, maintain our current organization and employee base or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.