Second Sight Reports Third Quarter 2016 Financial Results SYLMAR, Calif.-(BUSINESS WIRE)- Second Sight Medical Products, Inc. (NASDAQ:EYES) ( Second Sight or the Company ), a developer, manufacturer and marketer of impla

Second Sight Reports Third

Quarter 2016 Financial Results

SYLMAR, Calif.-(BUSINESS WIRE)- Second Sight Medical

Products, Inc. (NASDAQ:EYES) ("Second Sight" or "the Company"), a developer, manufacturer and marketer of implantable

visual prosthetics to provide a form of useful vision to blind patients, today reported financial results for the three- and nine-month

periods ended September 30, 2016.

Recent Company Highlights:

"We are pleased with two positive recent developments regarding

our U.S. reimbursement: the final rule yesterday for a calendar year 2017 outpatient reimbursement rate of $150,000, and the approval

of two new Category III CPT codes, providing clinicians the ability to bill for programming and re-programming services, starting

in July. In addition, as we evolve our commercialization strategy in the U.S., we are creating Centers of Excellence (COE) that

are committed to ensuring competence in patient screening, post-surgery programming and rehabilitation. Ultimately, we expect our

COE strategy to better serve patients and drive higher, more consistent volumes. Outside the U.S., we are advancing our reimbursement

efforts in England and now Belgium, and have made good progress with our distribution partners in other new markets," stated

Will McGuire, President and CEO of Second Sight.

"Concurrently, our R&D team is focusing on next generation

product development including new image processing advances and innovative retinal stimulation techniques. With the Orion I, we

have reached an exciting milestone and while there is still more work ahead of us, the successful proof of concept study supports

our ongoing efforts to develop this life-changing technology and moves us closer towards our goal of treating all forms of blindness.

We are excited about the progress we have made and have a strategy in place to identify and penetrate the markets for the Argus

II, advance our product pipeline, and build shareholder value well into the future," concluded McGuire.

Third Quarter 2016 Financial Results

Net sales in the third quarter of 2016 were $1.2 million compared

with $2.2 million in the third quarter of 2015. The decrease in revenue was driven by three primary factors: 1) the reduced

U.S. CMS reimbursement rate for 2016; 2) the timing of revenue recognition due to certain deal terms, and 3) geographic mix of

implants that favored EMEA in the current year, where we historically have received a lower level of revenue per implant. As a

result, the revenue per implant was $84,000 in the third quarter of 2016, compared with $148,000 in the third quarter of 2015.

Gross loss was $1.4 million in the third quarter of 2016,

compared to a $1.5 million gross profit in the third quarter of 2015. This gross loss is primarily attributed to lower revenues,

unabsorbed production costs and excess inventory reserve adjustments when compared to the prior year. The cost of sales during

the third quarter of 2016 was $2.6 million and includes roughly $700,000 of unabsorbed production costs due to lower production

volumes and a $1.0 million reserve for excess inventory.

Total operating expenses in the third quarter of 2016 were $7.1

million, compared with $6.1 million in the third quarter of 2015, reflecting higher research and development costs and higher stock-based

compensation and salaries.

Net loss for the third quarter of 2016 was $8.5 million,

or $0.20 per share, compared with a net loss of $4.7 million, or $0.13 per share, in the prior year quarter. The Company

recorded non-cash charges of $2.0 million and $943,000 during the third quarters of 2016 and 2015, respectively.

Non-GAAP adjusted net loss for the third quarter of 2016, excluding

non-cash charges, was $0.15 per share, compared to a non-GAAP adjusted net loss of $0.10 per share, in the third quarter of 2015.

Nine Months Ended September 30, 2016 and 2015 Financial Results

For the nine months ended September 30, 2016, total revenue

was $3.3 million compared to $6.6 million in 2015. The decline was primarily driven by a reduction in global implant volumes,

and a reduced revenue per unit, resulting from a lower U.S. CMS reimbursement rate for 2016.

Gross loss in the first nine months of 2016 was $3.5 million,

versus a gross profit of $3.0 million in 2015. The nine month results for 2016 include the unabsorbed production costs and

an excess inventory reserve adjustment mentioned above.

Total operating expenses during the first nine months of 2016

were $19.3 million versus $17.5 million during the same period in 2015. This increase includes higher general and administrative

and R&D costs offset by lower clinical costs, including higher compensation and stock-based compensation costs.

Net loss for the nine months ended September 30, 2016 was $22.8

million, or $0.57 per share, compared with a net loss of $14.5 million, or $0.41 per share in the prior year period. Non-GAAP

adjusted net loss for the nine months ended September 30, 2016, excluding non-cash expenses, was $17.4 million, or a loss of $0.44

per share compared with Non-GAAP adjusted net loss of $12.4 million and $0.35 per share in the prior year period.

As of September 30, 2016, Second Sight had $17.8 million in

cash, cash equivalents and investments, compared to $16.0 million as of December 31, 2015.

As previously announced, Second Sight management will host its

third quarter 2016 conference call as follows:

A replay of the conference call will be available for two weeks

after the call's completion by dialing (800) 633-8284 (U.S.) or (402) 977-9140 (International). The conference ID for

the replay is 21821062. The archived webcast will be available for 30 days via the aforementioned URL.

Second Sight's mission is to develop, manufacture and

market innovative implantable visual prosthetics to enable blind individuals to achieve greater independence. Second Sight

has developed and now manufactures and markets the Argus II Retinal Prosthesis System. Enrollment has been completed in

a feasibility trial to test the safety and utility of the Argus II in individuals with Dry Age-Related Macular Degeneration.

Second Sight is also developing the Orion I Visual Cortical Prosthesis to restore some vision to individuals who

are blind due to causes other than preventable or treatable conditions. U.S. Headquarters are

in Sylmar, California, and European Headquarters are in Lausanne, Switzerland. For more information,

visit www.secondsight.com.

About the Argus II Retinal Prosthesis System

Second Sight's Argus II System provides electrical

stimulation that bypasses the defunct retinal cells and stimulates remaining viable cells inducing visual perception in

individuals with severe to profound outer retinal degeneration such as retinitis pigmentosa (RP). The Argus II works by

converting images captured by a miniature video camera mounted on the patient's glasses into a series of small electrical

pulses, which are transmitted wirelessly to an array of electrodes implanted on the surface of the retina. These pulses are

intended to stimulate the retina's remaining cells, resulting in the perception of patterns of light in the brain. The

patient then learns to interpret these visual patterns, thereby regaining some useful vision. The system is controlled by

software and is upgradeable, which may provide improved performance as new algorithms are developed and tested. Therefore

current and future Argus II users may benefit from the continuously improving technology. The Argus II is the first

artificial retina to receive widespread approval, and is offered at approved centers in

Austria, Canada, France, Germany, Italy, Netherlands, Saudi

Arabia, Spain, Switzerland, Turkey, United Kingdom and the United States.

This press release contains forward-looking statements within

the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange and Exchange Act

of 1934, as amended, which are intended to be covered by the "safe harbor" created by those sections. All statements

in this release that are not based on historical fact are "forward looking statements." These statements may be identified

by words such as "estimates," "anticipates," "projects," "plans," or "planned,"

"seeks," "may," "will," "expects," "intends," "believes," "should,"

"potentially," "objectives," and similar expressions or the negative versions thereof and which also may be

identified by their context. While management has based any forward looking statements included in this release on its current

expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks

and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result

of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis

of Financial Condition and Results of Operations sections of the Company's Annual Report on Form 10-K as filed on March 11, 2016,

as amended on August 8, 2016, and the Company's other reports filed from time to time with the Securities and Exchange

Commission. We urge you to consider those risks and uncertainties in evaluating the Company's forward-looking statements. We caution

readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise

required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions

to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company's expectations with regard