10-Q
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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 September 30, 2021

OR

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: 001-40587

 

SIGHT SCIENCES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

80-0625749

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

4040 Campbell Ave, Suite 100

Menlo Park, CA

94025

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (877) 266-1144

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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

 

SGHT

 

The Nasdaq Global Select Market

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, 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.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

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 November 8, 2021, the registrant had 47,307,477 shares of Common Stock, par value $0.001 outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

Special Note Regarding Forward-Looking Statements

3

 

 

 

PART I.

FINANCIAL INFORMATION

6

 

 

 

Item 1.

Condensed Financial Statements (Unaudited)

6

 

Condensed Consolidated Balance Sheets (Unaudited)

6

 

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

7

 

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit (Unaudited)

8

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

10

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

12

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

43

Item 4.

Controls and Procedures

43

 

 

 

PART II.

OTHER INFORMATION

44

 

 

 

Item 1.

Legal Proceedings

44

Item 1A.

Risk Factors

44

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

108

Item 3.

Defaults Upon Senior Securities

108

Item 4.

Mine Safety Disclosures

108

Item 5.

Other Information

108

Item 6.

Exhibits

109

 

Signatures

111

 

 

2


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “Sight Sciences,” “we,” “us” and “our” refer to Sight Sciences, Inc.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

estimates of our total addressable market, future revenue, expenses, capital requirements, and our needs for additional financing;
our ability to enter into and compete in new markets;
the impact of the COVID-19 pandemic on our business, our customers’ and suppliers’ businesses and the general economy;
our ability to compete effectively with existing competitors and new market entrants;
our ability to scale our infrastructure;
our ability to manage and grow our business by expanding our sales to existing customers or introducing our products to new customers;
our ability to establish and maintain intellectual property protection for our products or avoid claims of infringement;
potential effects of extensive government regulation;
our ability to obtain and maintain sufficient reimbursement for our products;
our abilities to protect and scale our intellectual property portfolio;
our ability to hire and retain key personnel;
our ability to obtain financing in future offerings;
the volatility of the trading price of our common stock;
our expectation regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act (the “JOBS Act”); and
our ability to maintain proper and effective internal controls.

Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, prospects, strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved

 

3


 

or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements in this Quarterly Report on Form 10-Q are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary 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. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

RISK FACTORS SUMMARY

Our business is subject to numerous risks and uncertainties, including those described in Part II Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:

We have incurred significant losses since inception and expect to incur significant additional losses for the foreseeable future which may make it difficult to evaluate the success of our business to date and to assess the prospects for our future viability;
Our business is highly dependent on the success of two current commercial products, and in particular OMNI. The development of TearCare for expanded indications depends upon positive clinical data, and the safety and efficacy of our products are not yet supported by long-term clinical data, which could delay or prevent clearance by regulatory authorities or limit sales if cleared, certified or approved;
We may need additional funding in order to finance our planned operations. The inability to raise funds on acceptable terms, if at all, when needed, may force us to delay, reduce or eliminate our product development programs and commercialization efforts;
The COVID-19 pandemic has impacted, and likely will continue to impact, our operations and financial results and may materially and adversely affect our business and financial results in the future;
We are subject to extensive and costly government regulation on federal, state and foreign levels and we may not receive, or may be delayed in receiving, the necessary regulatory clearances, certifications or approvals for our future products or modifications to our current products;
We may incur significant liability if it is determined that we are not complying with federal, state or foreign regulatory requirements, such as if it is determined that we are promoting off-label uses of our products;
Changes in public health insurance coverage and reimbursement rates may affect the adoption of our products and our future revenue;
Developments by competitors may render our products or technologies obsolete or noncompetitive and the development of new products, technologies, procedures, medications or other therapies could replace or reduce the importance of our products;
We rely on third parties for the manufacture and supply of OMNI and TearCare;

 

4


 

We depend on a limited number of single source suppliers for some of the components, accessories, and materials used in the manufacture and assembly of OMNI and TearCare and any shortfall in the supply chain may cause our business to materially suffer;
If we are unable to obtain, protect, maintain, enforce and adequately protect our intellectual property rights with respect to our technology and current and future products, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and current and future products may be adversely affected; and
If we lose key management or scientific personnel, cannot recruit qualified employees, directors, officers or other significant personnel or experience increases in our compensation costs, our business may materially suffer.

 

5


 

PART 1. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

SIGHT SCIENCES, INC.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

271,475

 

 

$

61,511

 

Accounts receivable, net

 

 

8,920

 

 

 

5,363

 

Inventory, net

 

 

2,948

 

 

 

2,598

 

Prepaid expenses and other current assets

 

 

4,493

 

 

 

1,161

 

Total current assets

 

 

287,836

 

 

 

70,633

 

Property and equipment, net

 

 

1,420

 

 

 

1,269

 

Operating lease right-of-use assets

 

 

1,612

 

 

 

518

 

Other noncurrent assets

 

 

182

 

 

 

386

 

Total assets

 

$

291,050

 

 

$

72,806

 

Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,839

 

 

$

2,158

 

Accrued compensation

 

 

4,639

 

 

 

4,070

 

Accrued and other current liabilities

 

 

3,837

 

 

 

3,086

 

Total current liabilities

 

 

10,315

 

 

 

9,314

 

Long-term debt

 

 

32,486

 

 

 

31,955

 

Other noncurrent liabilities

 

 

2,273

 

 

 

3,055

 

Total liabilities

 

 

45,074

 

 

 

44,324

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

Redeemable convertible preferred stock:

 

 

 

 

 

 

Convertible preferred stock, $0.001 par value; 10,000,000 shares authorized as of September 30, 2021, no shares issued and outstanding as of September 30, 2021; 14,241,390 shares authorized as of December 31, 2020, 12,767,202 shares issued and outstanding as of December 31, 2020; aggregate liquidation preference of $118.6 million as of December 31, 2020

 

 

 

 

 

117,331

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock par value of $0.001 per share; 200,000,000 and 21,831,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 47,292,022 and 9,509,182 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

49

 

 

 

9

 

Additional paid-in-capital

 

 

382,992

 

 

 

1,183

 

Accumulated deficit

 

 

(137,065

)

 

 

(90,041

)

Total stockholders’ equity (deficit)

 

 

245,976

 

 

 

(88,849

)

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

$

291,050

 

 

$

72,806

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6


 

SIGHT SCIENCES, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

13,101

 

 

$

8,651

 

 

$

34,271

 

 

$

18,649

 

Cost of goods sold

 

 

2,062

 

 

 

2,620

 

 

 

6,668

 

 

 

6,833

 

Gross profit

 

 

11,039

 

 

 

6,031

 

 

 

27,603

 

 

 

11,816

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,279

 

 

 

2,158

 

 

 

11,265

 

 

 

6,001

 

Selling, general and administrative

 

 

20,790

 

 

 

11,228

 

 

 

53,100

 

 

 

29,570

 

Total operating expenses

 

 

25,069

 

 

 

13,386

 

 

 

64,365

 

 

 

35,571

 

Loss from operations

 

 

(14,030

)

 

 

(7,355

)

 

 

(36,762

)

 

 

(23,755

)

Interest income

 

 

 

 

 

1

 

 

 

 

 

 

30

 

Interest expense

 

 

(1,122

)

 

 

(538

)

 

 

(3,288

)

 

 

(1,639

)

Other expense, net

 

 

(2,001

)

 

 

(197

)

 

 

(6,884

)

 

 

(179

)

Loss before income taxes

 

 

(17,153

)

 

 

(8,089

)

 

 

(46,934

)

 

 

(25,543

)

Provision for income taxes

 

 

16

 

 

 

8

 

 

 

90

 

 

 

45

 

Net loss and comprehensive loss

 

$

(17,169

)

 

$

(8,097

)

 

$

(47,024

)

 

$

(25,588

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.43

)

 

$

(0.85

)

 

$

(2.38

)

 

$

(2.70

)

Weighted-average shares outstanding, basic and diluted

 

 

39,849,769

 

 

 

9,493,548

 

 

 

19,772,145

 

 

 

9,467,039

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

7


 

SIGHT SCIENCES, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited)

(in thousands, except share data)

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance at December 31, 2020

 

 

12,767,202

 

 

$

117,331

 

 

 

9,509,182

 

 

$

9

 

 

$

1,183

 

 

$

(90,041

)

 

$

(88,849

)

Exercise of stock options

 

 

 

 

 

 

 

 

16,862

 

 

 

 

 

 

11

 

 

 

 

 

 

11

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

277

 

 

 

 

 

 

277

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,240

)

 

 

(12,240

)

Balance at March 31, 2021

 

 

12,767,202

 

 

 

117,331

 

 

 

9,526,044

 

 

 

9

 

 

 

1,471

 

 

 

(102,281

)

 

 

(100,801

)

Exercise of stock options

 

 

 

 

 

 

 

 

205,988

 

 

 

 

 

 

196

 

 

 

 

 

 

196

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

931

 

 

 

 

 

 

931

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,615

)

 

 

(17,615

)

Balance at June 30, 2021

 

 

12,767,202

 

 

 

117,331

 

 

 

9,732,032

 

 

 

9

 

 

 

2,598

 

 

 

(119,896

)

 

 

(117,289

)

Conversion of redeemable convertible preferred stock to common stock upon initial public offering

 

 

(12,767,202

)

 

 

(117,331

)

 

 

25,534,404

 

 

 

27

 

 

 

117,304

 

 

 

 

 

 

117,331

 

Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs of $23.8 million

 

 

 

 

 

 

 

 

11,500,000

 

 

 

12

 

 

 

252,162

 

 

 

 

 

 

252,174

 

Conversion of redeemable convertible preferred stock warrants to common stock warrants upon initial public offering

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,973

 

 

 

 

 

 

8,973

 

Exercise of common stock warrants

 

 

 

 

 

 

 

 

483,554

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

42,032

 

 

 

 

 

 

57

 

 

 

 

 

 

57

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,899

 

 

 

 

 

 

1,899

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,169

)

 

 

(17,169

)

Balance at September 30, 2021

 

 

 

 

 

 

 

 

47,292,022

 

 

 

49

 

 

 

382,992

 

 

 

(137,065

)

 

 

245,976

 

 

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Total
Stockholders’ Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31, 2019

 

 

9,804,640

 

 

$

64,256

 

 

 

9,319,466

 

 

$

9

 

 

$

656

 

 

$

(55,348

)

 

$

(54,683

)

Issuance of Series E convertible preferred stock, net of issuance costs of $94

 

 

1,899,847

 

 

 

30,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

1,500

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

 

 

8


 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61

 

 

 

 

 

 

61

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,175

)

 

 

(9,175

)

Balance at March 31, 2020

 

 

11,704,487

 

 

 

94,311

 

 

 

9,320,966

 

 

 

9

 

 

 

718

 

 

 

(64,523

)

 

 

(63,796

)

Issuance of Series E convertible preferred stock

 

 

 

 

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

20,520

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65

 

 

 

 

 

 

65

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,316

)

 

 

(8,316

)

Balance at June 30, 2020

 

 

11,704,487

 

 

 

94,299

 

 

 

9,341,486

 

 

 

9

 

 

 

790

 

 

 

(72,839

)

 

 

(72,040

)

Redeemable convertible preferred stock issuance cost

 

 

 

 

 

(55

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

 

 

 

 

 

34,346

 

 

 

 

 

 

12

 

 

 

 

 

 

12

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

165

 

 

 

 

 

 

165

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,097

)

 

 

(8,097

)

Balance at September 30, 2020

 

 

11,704,487

 

 

 

94,244

 

 

 

9,375,832

 

 

 

9

 

 

 

967

 

 

 

(80,936

)

 

 

(79,960

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

9


 

SIGHT SCIENCES, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

<

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(47,024

)

 

$

(25,588

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation

 

 

457

 

 

 

418

 

Accretion of debt discount and amortization of debt issuance costs

 

 

531

 

 

 

421

 

Stock-based compensation expense

 

 

3,107

 

 

 

291

 

Provision for doubtful accounts receivable

 

 

149

 

 

 

188

 

Provision for excess and obsolete inventories

 

 

297

 

 

 

1,093

 

Amortization of right-of-use asset

 

 

448

 

 

 

414

 

Change in fair value of redeemable convertible preferred stock warrant

 

 

6,861

 

 

 

175

 

Loss on disposal of property and equipment

 

 

98

 

 

 

121

 

Proceeds from Paycheck Protection Program loan

 

 

 

 

 

(2,246

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,707

)

 

 

(1,170

)

Inventory

 

 

(648

)

 

 

(1,106