SEC Filing | RxSight

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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 March 31, 2023


☐	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 April 28, 2023, the registrant had 33,981,877 shares of common stock, $0.001 par value per share, outstanding.


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	6
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations and Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders' Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	99
Item 3.	Defaults Upon Senior Securities	99
Item 4.	Mine Safety Disclosures	99
Item 5.	Other Information	99
Item 6.	Exhibits	100
Signatures		102

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following discussion and analysis should be read together with our condensed consolidated financial statements and the condensed notes to those statements included elsewhere in this report. This report 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. In this report, “we,” “us” and “our” refer to RxSight, Inc., a Delaware corporation, and its consolidated subsidiaries.

Forward-looking statements include, but are not limited to, statements concerning the following:

•

the sufficiency of our existing capital resources to fund our future operating expenses and capital expenditure requirements, including our expectation that we do not anticipate the need to raise additional capital or incur additional debt in order to reach profit from operations, as disclosed in the Company’s future Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (“SEC”), provided that we may opportunistically access our at-the-market (“ATM”) facility under advantageous circumstances;

•

our plans to conduct further clinical trials and any expectations related to the timing or outcomes of such trials;

•

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

•

the expected acceptance and 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 recruit and retain 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 appropriate 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;

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and a smaller reporting company under the Exchange Act;


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•

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 intraocular lens (“IOL”) markets;

•

the impact of local, regional, national or political conditions and events;

•

the impact of the COVID-19 pandemic, including currently known and unknown coronavirus variants, on our business or personnel; and

•

the impact of worldwide political and economic conditions and unknown future events on our business, financial condition and results of operations.

Forward-looking statements include statements that are not historical facts and can be identified by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” or “continue,” or the negative of such terms and other same terminology.

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 report. 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 report 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 report 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.

DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“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, 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 the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2023.

INDUSTRY, BUSINESS AND MARKET DATA

This report 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.


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TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This report contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report 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.


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Item 1: Financial Statements (Unaudited)

RxSIGHT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


	March 31,			December 31,
	2023			2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	11,012		$	11,834
Short-term investments		142,927			93,968
Accounts receivable		12,668			10,956
Inventories		18,067			14,835
Prepaid and other current assets		2,992			2,962
Total current assets		187,666			134,555
Property and equipment, net		9,804			10,138
Operating leases right-of-use assets		3,555			3,943
Restricted cash		761			761
Other assets		746			767
Total assets	$	202,532		$	150,164
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	3,717		$	2,595
Accrued expenses and other current liabilities		9,181			12,672
Lease liabilities		1,978			1,970
Total current liabilities		14,876			17,237
Long-term lease liabilities		2,338			2,856
Term loan, net		40,309			40,169
Total liabilities		57,523			60,262
Commitments and contingencies (Note 9)
Stockholders' equity:
Common stock, $0.001 par value, 900,000,000 shares authorized, 33,966,697 shares issued and outstanding as of March 31, 2023 and 28,268,389 shares issued and outstanding as of December 31, 2022		34			28
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding		—			—
Additional paid-in capital		704,228			636,001
Accumulated other comprehensive loss		(9	)		(95	)
Accumulated deficit		(559,244	)		(546,032	)
Total stockholders' equity		145,009			89,903
Total liabilities and stockholders' equity	$	202,532		$	150,164

See accompanying notes to unaudited condensed consolidated financial statements.


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RxSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS (UNAUDITED)

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2023			2022
Sales	$	17,489		$	8,942
Cost of sales		7,123			5,181
Gross profit		10,366			3,761
Operating expenses:
Selling, general and administrative		16,255			13,620
Research and development		7,208			6,719
Total operating expenses		23,463			20,339
Loss from operations		(13,097	)		(16,578	)
Other income (expense), net:
Interest expense		(1,507	)		(1,060	)
Interest and other income		1,392			46
Loss before income taxes		(13,212	)		(17,592	)
Income tax expense		—			4
Net loss	$	(13,212	)	$	(17,596	)

Other comprehensive income (loss)
Unrealized gain (loss) on short-term investments		84			(74	)
Foreign currency translation gain (loss)		2			(4	)
Total other comprehensive income (loss)		86			(78	)
Comprehensive loss	$	(13,126	)	$	(17,674	)
Net loss per share:
Basic & diluted	$	(0.42	)	$	(0.64	)
Weighted-average shares used in computing net loss per share:
Attributable to common stock, basic & diluted		31,637,097			27,425,610

See accompanying notes to unaudited condensed consolidated financial statements.


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RxSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except number of shares)


	Three Months Ended March 31, 2023

	Common stock					Additional paid-in			Accumulated other			Accumulated			Total stockholders'
	Shares			Amount		capital			comprehensive loss			deficit			equity
Balance at December 31, 2022		28,268,389		$	28	$	636,001		$	(95	)	$	(546,032	)	$	89,902
Shares issued for the exercise of stock options and vesting of restricted stock units		243,598			—		761			—			—			761
Shares redeemed for employee tax withholdings		(24,631	)		—		(337	)		—			—			(337	)
Stock-based compensation expense		—			—		3,295			—			—			3,295
Issuance of common stock for public offering, net of underwriting discounts, commissions and offering costs		4,600,000			5		53,595			—			—			53,600
Issuance of common stock for at-the-market offerings, net of issuance costs		879,341			1		10,913			—			—			10,914
Unrealized gain on short-term investments and cash equivalents, net of tax		—			—		—			84			—			84
Foreign currency translation adjustment		—			—		—			2			—			2
Net loss		—			—		—			—			(13,212	)		(13,212	)
Balance at March 31, 2023		33,966,697		$	34	$	704,228		$	(9	)	$	(559,244	)	$	145,009

See accompanying notes to unaudited condensed consolidated financial statements


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RxSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except number of shares)


	Three Months Ended March 31, 2022


	Common stock					Additional paid-in			Accumulated other			Accumulated			Total stockholders'
	Shares			Amount		capital			comprehensive loss			deficit			equity
Balance at December 31, 2021		27,366,746		$	27	$	617,511		$	(20	)	$	(479,276	)	$	138,242
Shares issued for the exercise of stock options and vesting of restricted stock units		145,922			—		308			—			—			308
Shares redeemed for employee tax withholdings		(26,983	)		—		(362	)		—			—			(362	)
Stock-based compensation expense		—			—		2,649			—			—			2,649
Unrealized loss on short-term investments and cash equivalents, net of tax		—			—		—			(74	)		—			(74	)
Foreign currency translation adjustment		—			—		—			(4	)		—			(4	)
Net loss		—			—		—			—			(17,596	)		(17,596	)
Balance at March 31, 2022		27,485,685		$	27	$	620,106		$	(98	)	$	(496,872	)	$	123,163

See accompanying notes to unaudited condensed consolidated financial statements


9

RxSIGHT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Three Months Ended March 31,
	2023			2022
Operating Activities:
Net loss	$	(13,212	)	$	(17,596	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		955			1,016
Amortization of right-of-use lease assets		44			19
Amortization of debt issuance costs and premium		141			130
Amortization of discount on short-term investments		(1,257	)		(47	)
Stock-based compensation		3,295			2,649
Provision for excess and obsolete inventory		10			73
Change in operating assets and liabilities:
Accounts receivable		(1,712	)		(764	)
Inventories		(3,241	)		(530	)
Prepaid and other assets		(460	)		814
Accounts payable		1,163			701
Accrued expenses and other liabilities		(3,490	)		(1,450	)
Net cash used in operating activities		(17,764	)		(14,985	)
Investing Activities:
Purchase of property and equipment		(747	)		(370	)
Maturity of short-term investments		60,000			90,000
Purchases of short-term investments		(107,618	)		(74,771	)
Net cash (used in) provided by investing activities		(48,365	)		14,859
Financing Activities:
Proceeds from exercise of stock options		761			308
Proceeds from issuance of common stock from public offering		54,050			—
Proceeds from issuance of common stock for at-the-market offerings		11,102			—
Payments for employee taxes related to stock compensation		(337	)		(362	)
Principal payments on finance lease liabilities		(41	)		(44	)
Payments of deferred offering costs		(230	)		—
Net cash provided by (used in) financing activities		65,305			(98	)
Effect of foreign exchange rate on cash, cash equivalents and restricted cash		2			(5	)
Net decrease in cash, cash equivalents and restricted cash		(822	)		(229	)
Cash, cash equivalents and restricted cash - beginning of period		12,595			25,172
Cash, cash equivalents and restricted cash - end of period	$	11,773		$	24,943
Supplemental disclosure of cash flow information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		546			499
Cash paid for income taxes		—			—
Cash paid for interest on financing leases		4			3
Cash paid for interest on term loan		1,344			925
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for lease obligations:
Operating lease		—			87
Finance lease		—			192
Lease obligations recorded for right-of-use assets:
Operating lease		—			87
Finance lease		—			166
Acquisition of property and equipment included in accounts payable and accrued expenses and other current liabilities		259			197
Deferred offering costs included in accounts payable and accrued liabilities		466			—
Reclassification of deferred financing costs		(55	)		—

See accompanying notes to unaudited condensed consolidated financial statements.


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RxSIGHT, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and Basis of Presentation

Description of Business

RxSight®, Inc. (the “Company”) is a Delaware corporation headquartered in Aliso Viejo, California with one wholly owned subsidiary located in Amsterdam, Netherlands. The wholly owned subsidiary has a registered branch in the United Kingdom and a wholly owned subsidiary located in Germany. The Company is engaged in the research and development, manufacture and sale of light adjustable intraocular lenses used in cataract surgery along with capital equipment used with the lenses.

The Company’s products, which include the light adjustable lens (“LAL®”) and a specially designed machine for delivering light to the eye, the Light Delivery Device (“LDD™”), are approved by the United States (“U.S.”) Food and Drug Administration (“FDA”) primarily for sale in the U.S. and have regulatory approval in the U.S., Europe, Canada and Mexico. The Company began marketing its products in 2019. The LAL is a premium intraocular lens (“IOL”) which is partially reimbursable under Medicare. The Company competes with other IOLs in the premium market.

The accompanying unaudited condensed consolidated financial statements include the accounts of RxSight, Inc. and its wholly owned subsidiaries, RxSight, B.V. and RxSight GmbH. All significant inter-company balances and transactions have been eliminated in consolidation.

Basis of Presentation and Principles of Consolidation

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The December 31, 2022 balance sheet data was derived from audited financial statements; however, the accompanying notes to the condensed consolidated financial statements do not include all of the annual disclosures required under GAAP and should be read in conjunction with the audited consolidated financial statements included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on March 6, 2023. The operating results presented in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods.

Operating Segments

The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company’s chief operating decision-maker (“CODM”), its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance.

The Company determined that it operates and manages its business (including its non-U.S. subsidiaries) in one reportable segment: the research and development, manufacture and sale of light adjustable lenses and related capital equipment.

Liquidity

Shelf Registration Statement

On August 8, 2022, the Company filed a $200.0 million shelf registration statement on Form S-3 (“shelf registration statement”) which became effective on August 12, 2022. The shelf registration statement is effective for three years and permits the Company to sell, from time to time, up to $200.0 million in aggregate value of common stock, preferred stock, debt securities, warrants, and/or units. The shelf registration statement is intended to provide the Company with flexibility to access additional capital. At the time of filing the shelf registration statement, the


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Company also filed a prospectus supplement to sell up to an aggregate value of $50.0 million dollars of common stock through an “at-the-market” (“ATM”) offering.

ATM Offering

As of March 31, 2023, through the ATM offering, a total of 1,355,216 shares of the Company's common stock, for total net proceeds of $16.9 million, have been issued and sold, of which 879,341 shares of the Company's common stock, for net proceeds of $10.9 million, were sold during the quarter ended March 31, 2023.

Public Offering

On February 7, 2023, the Company entered into an underwriting agreement with BofA Securities, Inc., in which the Company agreed to issue and sell 4,000,000 shares of the Company's common stock in a public offering (“Public Offering”), pursuant to the shelf registration statement. The shares of common stock were sold at a price to the public of $12.50 per share. Under the terms of the underwriting agreement, the Company also granted the underwriters an option exercisable for 30 days from the date of the underwriting agreement to purchase up to an additional 600,000 shares of common stock on the same terms and conditions. The underwriters' option was exercised in full on February 10, 2023 and closed on February 14, 2023. The Company received net proceeds of approximately $53.6 million from the Public Offering, after deducting underwriters' discounts and commissions of $3.5 million and offering expenses of $0.5 million.

As of March 31, 2023 and December 31, 2022 the Company had cash, cash equivalents and short-term investments of $153.9 million and $105.8 million, respectively.

The Company began generating revenue from its principal operations in 2019. The Company has a limited operating history, and the revenue and income potential of the Company’s business and market are unproven. The Company has experienced recurring net losses and negative cash flows from operating activities since its inception. For the three months ended March 31, 2023 and 2022, the Company incurred losses from operations of $13.1 million and $16.6 million, respectively. Based on the Company’s anticipated sales growth in relation to the anticipated costs associated with, among other things, its continuing research and development activities and the expansion of its sales and marketing activities, the Company expects to continue to incur net operating losses into the foreseeable future. Successful transition to attaining profitable operations is dependent upon gaining market acceptance of the Company’s products and achieving a level of revenues adequate to support the Company’s cost structure.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company believes that existing cash resources will be sufficient to meet projected operating requirements for at least 12 months from the date of issuance of the accompanying condensed consolidated financial statements, though the Company expects to continue to incur operating losses and negative cash flows. The Company plans to continue to fund its losses fr