Second Sight‘s plans to raise $27.9 million from a private placement appear to have generated conflict with its would-be owner Pixium Vision.
Pixium informed Second Sight (NSDQ: EYES) yesterday that the private placement would breach the memorandum of understanding the two companies reached in early January, according to a Second Sight filing with the SEC. Second Sight said the dispute could head to court, with Pixium seeking to end the MOU and receive a termination fee of up to $1 million.
Under agreements with accredited investors, Second Sight plans to close the private placement on March 26, selling 4.65 million shares of common stock at $6 apiece. The money will go toward working capital for the artificial vision tech company.
The news comes weeks after Second Sight secured announced FDA approval of its Argus 2s retinal prosthesis system, though questions remained about whether it would ever be manufactured. The planned merger with Prixium would have the combined company focusing on Pixium’s Prima retinal stimulation system and creating a new subsidiary to zero in on cortical stimulation through Second Sight’s Orion implant.
To make the private placement happen, Second Sight is also paying $1.35 million to Hudson Bay Capital Management — plus an addition $50,000 legal fee reimbursement — to waive rights under a term sheet for placement of preferred shares and warrants that Second Sight and Hudson Bay agreed to on March 7.
EYES share were down nearly 17% to $9.14 apiece near the end of trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, is down slightly.
