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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40690

RxSIGHT, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	94-3268801
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
100 Columbia Aliso Viejo, CA	92656
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (949) 521-7830

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

RXST

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 31, 2021, the registrant had 27,313,004 shares of common stock, $0.001 par value per share, outstanding.


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss	6
	Condensed consolidated statements of redeemable common stock, stock options, convertible preferred stock and stockholders’ deficit	7
	Condensed consolidated statements of cash flows	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	102
Item 3.	Defaults Upon Senior Securities	103
Item 4.	Mine Safety Disclosures	103
Item 5.	Other Information	103
Item 6.	Exhibits	104
Signatures		108

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following discussion and analysis should be read together with our consolidated financial statements and the condensed notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained principally in the section entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements include, but are not limited to, statements concerning the following:



our plans to conduct further clinical trials and any expectations related to such trials;



our plans and expected timeline related to our products, or developing new products, to address additional indications or otherwise;



the expected use of our products by doctors;



our ability to obtain, maintain and expand regulatory clearances for our products and any new products we create;



the expected growth of our business and our organization;



our intentions regarding investment in our business as we pursue growth;



our expected uses of our existing resources;



the expectations regarding government and third-party payer coverage and reimbursement;



our ability to retain and recruit key personnel, including the continued development of a sales and marketing infrastructure;



our ability to obtain an adequate supply of materials and components for our products from our third-party suppliers, including single- and sole-source suppliers;



our ability to manufacture sufficient quantities of our products with sufficient quality;



our ability to obtain, maintain and enforce intellectual property protection for our products and protect our intellectual property rights;



our ability to expand our business into new geographic markets;



our ability to comply with applicable SEC rules and Nasdaq continued listing requirements;



our ability to comply with existing and future government laws, rules and regulations both in the United States and internationally;



our expectations regarding allocation of resources toward expenses associated with being a public company;



our estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for, or ability to obtain, additional financing;



the sufficiency of our existing capital resources to fund our future operating expenses and capital expenditure requirements;



our expectations regarding the time during which we will be an emerging growth company under the JOBS Act and a smaller reporting company under the Exchange Act;



the volatility of the trading price of our common stock;



our ability to identify and develop new and planned products and/or acquire new products;



development and projections relating to our competitors or our industry, including anticipated growth rates for the conventional and premium IOL markets;


3



the impact of local, regional, national and international economic conditions and events; and



the impact of the COVID-19 pandemic, including currently known and unknown coronavirus variants, as applied to our business.

Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in Part II, Item 1A, “Risk Factors,” elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Our discussion and analysis of our financial condition and results of operations is based upon our Unaudited Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates including those related to revenue recognition; valuation of the Company’s common stock, warrants and other equity awards; estimated probability and timing of redemption of equity instruments, the realization of income tax assets and estimates of tax liabilities, and obsolete, excess and slow-moving inventory. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ materially from these estimates. Our critical accounting policies and estimates are discussed in in the Company’s final prospectus for its Initial Public Offering (the "IPO"), filed pursuant to Rule 424(b) under the Securities Exchange Act of 1933, as amended, with the SEC on July 29, 2021 (the “Prospectus”) and there have been no material changes during the six months ended June 30, 2021.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and market opportunity, including data regarding the estimated size of the market. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

This Quarterly Report on Form 10-Q contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report on Form 10-Q may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.


4

Item 1: Financial Statements (Unaudited)

RXSIGHT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except number of shares and per share amounts)


	June 30,			December 31,
	2021			2020 (1)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	41,731		$	13,994
Short-term investments		19,998			54,981
Accounts receivable		3,936			2,865
Inventories		8,543			8,288
Prepaid and other current assets		1,338			1,372
Total current assets		75,546			81,500
Property and equipment, net		12,686			13,287
Operating leases right-of-use assets		4,749			5,319
Restricted cash		561			461
Other assets		1,344			110
Total assets	$	94,886		$	100,677
Liabilities, redeemable common stock, stock options, convertible preferred stock and stockholders' deficit
Current liabilities:
Accounts payable	$	2,342		$	1,134
Accrued expenses and other current liabilities		4,781			4,174
Warrant liability		2,614			5,018
Lease liabilities		1,365			1,274
Total current liabilities		11,102			11,600
Long-term warrant liability		—			3,828
Long-term lease liabilities		4,374			5,079
Term loan, net		39,506			24,399
Total liabilities		54,982			44,906
Commitments and contingencies (Note 12)
Redeemable common stock:
Common stock, $0.001 par value, 24,545,966 shares authorized, 3,813,450 shares issued and outstanding as of December 31, 2020		—			80,780
Notes receivable for common stock issued		—			(803	)
Redeemable stock options		—			53,085
Convertible preferred stock:
Preferred stock, $0.001 par value, 16,572,792 shares authorized, 14,376,272 shares issued and outstanding as of June 30, 2021 and December 31, 2020 (redeemable), respectively		353,300			353,300
Stockholders' deficit:
Common stock, $0.001 par value, 24,545,966 shares authorized, 4,124,211 shares issued and outstanding as of June 30, 2021		4			—
Additional paid-in capital		137,838			—
Notes receivable for common stock issued		(365	)		—
Series G common stock, $0.001 par value, 1 share authorized and outstanding as of June 30, 2021 and December 31, 2020		—			—
Series W common stock, $0.001 par value, 1 share authorized and no shares outstanding as of June 30, 2021 and December 31, 2020		—			—
Accumulated other comprehensive loss		(3	)		(3	)
Accumulated deficit		(450,870	)		(430,588	)
Total stockholders' deficit		(313,396	)		(430,591	)
Total liabilities, redeemable common stock, stock options, convertible preferred stock and stockholders' deficit	$	94,886		$	100,677
(1) The balance sheet at December 31,2020 has been derived from the audited consolidated financial statements included in RxSight, Inc.'s final prospectus for its public offering filed on July 29, 2021.

See accompanying notes to unaudited condensed consolidated financial statements.


5

RXSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS (UNAUDITED)

(In thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Sales	$	4,897		$	2,706		$	8,381		$	5,594
Cost of sales		5,709			3,180			8,074			5,989
Gross profit (loss)		(812	)		(474	)		307			(395	)
Operating expenses:
Selling, general and administrative		6,502			3,249			12,113			6,948
Research and development		6,563			5,084			13,206			10,861
Total operating expenses		13,065			8,333			25,319			17,809
Loss from operations		(13,877	)		(8,807	)		(25,012	)		(18,204	)
Other income (expense), net:
Change in fair value of warrants		1,214			(4,178	)		1,214			(11,585	)
Expiration of warrant		—			—			5,018			—
Interest expense		(826	)		(4	)		(1,524	)		(9	)
Interest and other income		15			147			32			459

Loss before income taxes		(13,474	)		(12,842	)		(20,272	)		(29,339	)
Income tax expense		3			40			10			45
Net loss		(13,477	)		(12,882	)		(20,282	)		(29,384	)
Accretion to redemption value of redeemable preferred stock and redeemable stock options		—			(4,097	)		—			(8,343	)
Net loss attributable to common stockholders		(13,477	)		(16,979	)		(20,282	)		(37,727	)
Other comprehensive loss
Unrealized gain (loss) on short-term investments		(4	)		(112	)		3			(35	)
Foreign currency translation gain (loss)		1			3			(3	)		2
Total other comprehensive loss		(3	)		(109	)		—			(33	)
Comprehensive loss	$	(13,480	)	$	(12,991	)	$	(20,282	)	$	(29,417	)
Net loss per share:
Attributable to redeemable common stock, basic and diluted	$	—		$	(4.66	)	$	—		$	(10.46	)
Attributable to Series G common stock, basic and diluted	$	(0.32	)	$	(0.58	)	$	(0.48	)	$	(1.24	)
Attributable to common stock, basic	$	(3.28	)	$	—		$	(5.00	)	$	—
Attributable to common stock, diluted	$	(3.53	)	$	—		$	(5.23	)	$	—
Weighted-average shares used in computing net loss per share:
Attributable to redeemable common stock, basic and diluted		—			3,645,699			—			3,608,190
Attributable to Series G common stock, basic and diluted		1			1			1			1
Attributable to common stock, basic		4,106,403			—			4,052,920			—
Attributable to common stock, diluted		4,166,439			—			4,113,249			—

See accompanying notes to unaudited condensed consolidated financial statements.


6

RXSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK, STOCK OPTIONS, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (UNAUDITED)

(In thousands, except number of shares)


	Three and Six Months Ended June 30, 2020
					Notes receivable
					for redeemable						Redeemable convertible preferred											Accumulated other
	Redeemable common stock				common stock			Redeemable			stock				Common stock				Additional paid-in			comprehensive			Accumulated			Total stockholders'
	Shares		Amount		issued			stock options			Shares		Amount		Shares		Amount		capital			income (loss)			deficit			deficit
Balance at December 31, 2019		3,563,884	$	56,422	$	(855	)	$	59,631			14,374,455	$	327,581		1	$	-	$	-		$	46		$	(419,855	)	$	(419,809	)
Exercise of stock options		11,351		303		-			(257	)		-		-		-		-		-			-			-			-
Stock-based compensation expense		-		-		-			-			-		-		-		-		623			-			-			623
Accretion to redemption value of redeemable stock options		-		-		-			(2,924	)		-		-		-		-		-			-			2,924			2,924
Accretion to redemption value of redeemable stock		-		3,493		-			-			-		7,170		-		-		(623	)		-			(10,040	)		(10,663	)
Unrealized gain on short-term investments and cash equivalents, net of tax		-		-		-			-			-		-		-		-		-			77			-			77
Foreign currency translation adjustment		-		-		-			-			-		-		-		-		-			(1	)		-			(1	)
Change in notes receivable for common stock issued		-		-		84			-			-		-		-		-		-			-			-			-
Net loss		-		-		-			-			-		-		-		-		-			-			(16,502	)		(16,502	)
Balance at March 31, 2020		3,575,235	$	60,218	$	(771	)	$	56,450			14,374,455	$	334,751		1	$	-	$	-		$	122		$	(443,473	)	$	(443,351	)
Exercise of stock options		211,590		5,128		-			(4,293	)		-		-		-		-		-			-			-			-
Stock-based compensation expense		-		-		-			-			-		-		-		-		1,083			-			-			1,083
Accretion to redemption value of redeemable stock options		-		-		-			(2,259	)		-		-		-		-		-