RxSight Inc

Previous wording

Our commercial efforts began in 2019 and have been primarily focused in the United States, where we are building a “razor and razor blade” business model to drive new customer adoption and ongoing LAL volume growth. Our United States commercial organization includes a direct sales team of LDD sales personnel and LAL account managers, as well as clinical specialists, field service engineers and marketing personnel. Our sales efforts are concentrated on the roughly 4,000 U.S. cataract surgeons that perform 70%-80% of all premium IOL procedures. As of June 30, 2024, we had established an installed base of 810 LDDs in ophthalmology practices and, since our inception through June 30, 2024, surgeons have implanted over 141,000 LALs.

Current wording

Our commercial efforts began in 2019 and have been primarily focused in the United States, where we are building a “razor and razor blade” business model to drive new customer adoption and ongoing LAL volume growth. Our United States commercial organization includes a direct sales team of LDD sales personnel and LAL account managers, as well as clinical specialists, field service engineers and marketing personnel. Our sales efforts are concentrated on the roughly 4,000 U.S. cataract surgeons that perform 70%-80% of all premium IOL procedures. As of September 30, 2024, we had established an installed base of 888 LDDs in ophthalmology practices and, since our inception through September 30, 2024, surgeons have implanted over 165,000 LALs.

Previous wording

During the quarter ended June 30, 2024, we had increased LDD sales of 11 and increased LAL sales of 11,592 when compared to the quarter ended June 30, 2023 from strong adoption of our RxSight technology by practices and doctors combined with an increased LDD installed base.

Current wording

During the quarter ended September 30, 2024, we had increased LDD sales of 12 and increased LAL sales of 10,897 when compared to the quarter ended September 30, 2023 from strong adoption of our RxSight technology by practices and doctors combined with an increased LDD installed base.

Previous wording

We regularly review several operating and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions. We believe the number of LDDs installed and, LALs implanted are indicators of our ability to drive adoption and generate revenue. We believe these are important metrics for our business. We may not yet be able to accurately assess seasonality and other trends, and we will continue to evaluate our business in the future using these and other financial metrics as we observe trends in our business. Our quarterly and annual financial results may fluctuate as a result of a variety of factors many of which are outside our control.

Current wording

Our quarterly and annual financial results may fluctuate as a result of a variety of factors many of which are outside our control. We may not yet be able to accurately assess seasonality and other trends, and we will continue to evaluate our business in the future using these and other financial metrics as we observe trends in our business.

Previous wording

For the three and six months ended June 30, 2024 and 2023, revenue from contracts with customers consisted of the following (in thousands):

Current wording

For the three and nine months ended September 30, 2024 and 2023, revenue from contracts with customers consisted of the following (in thousands):

Previous wording

For the three and six months ended June 30, 2024 and 2023 we did not have any one customer who individually accounted for more than 10% of revenue.

Current wording

For the three and nine months ended September 30, 2024 and 2023 we did not have any one customer who individually accounted for more than 10% of revenue.

Previous wording

Interest expense consist primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the amortization of debt discount and issuance costs associated with our indebtedness and interest on leases.

Current wording

Interest expense consists primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the amortization of debt discount and issuance costs associated with our indebtedness and interest on leases.

Previous wording

Interest and other income, net consist primarily of interest income earned on our short-term investments and cash equivalents.

Current wording

Interest and other income, net consists primarily of interest income earned on our short-term investments and cash equivalents.

Previous wording

Sales increased by $14.1 million, or 67.6%, to $34.9 million for the three months ended June 30, 2024, from $20.8 million for the three months ended June 30, 2023. The increase in total sales was primarily due to the incremental sales of 11,592 LALs and 11 LDDs from strong adoption of our RxSight system by practices and doctors.

Current wording

Sales increased by $13.1 million, or 59.1%, to $35.4 million for the three months ended September 30, 2024, from $22.2 million for the three months ended September 30, 2023. The increase in total sales was primarily due to the incremental sales of 10,897 LALs and 12 LDDs from strong adoption of our RxSight system by practices and doctors.

Previous wording

Cost of sales increased by $1.8 million, or 20.9%, to $10.6 million for the three months ended June 30, 2024, from $8.8 million for the three months ended June 30, 2023, primarily due to the increase in the number of LALs and LDDs sold during the period. Gross margin increased to 69.5% in the three months ended June 30, 2024, from 57.8% for the three months ended June 30, 2023 primarily due to improved operating leverage, favorable product mix from a greater percentage of revenue from LAL sales, and increased margins on our LDD due to lower material costs.

Current wording

Cost of sales increased by $1.6 million, or 19.2%, to $10.1 million for the three months ended September 30, 2024, from $8.5 million for the three months ended September 30, 2023, primarily due to the increase in the number of LALs and LDDs sold during the period. Gross margin increased to 71.4% in the three months ended September 30, 2024, from 61.8% for the three months ended September 30, 2023, primarily due to improved operating leverage, favorable product mix from a greater percentage of revenue from LAL sales, and increased margins on our LDD due to lower material costs.

Previous wording

SG&A expenses increased by $6.1 million, or 33.2%, to $24.3 million for the three months ended June 30, 2024, from $18.2 million for the three months ended June 30, 2023. This increase was primarily attributable to an increase in selling and marketing costs of $4.0 million mainly due to increased salaries from increased headcount of 37, increased sales commissions, incentive bonuses and employee benefits of $2.1 million, $0.8 million of increased stock-based compensation expense, $0.3 million in additional post market study costs, and new customer acquisition costs, in each case when compared to the three months ended June 30, 2023. General and administrative expenses increased $2.0 million due to increased personnel expenses of $0.6 million, $0.2 million of increased costs related to operating as a public company for Sarbanes-Oxley compliance and increased stock-based compensation of $0.8 million, in each case when compared to the three months ended June 30, 2023.

Current wording

SG&A expenses increased by $6.5 million, or 33.8%, to $25.6 million for the three months ended September 30, 2024, from $19.1 million for the three months ended September 30, 2023. This increase was primarily attributable to an increase in selling and marketing costs of $5.1 million (mainly due to increased salaries from increased headcount of 36), increased sales commissions, incentive bonuses and employee benefits of $2.7 million, $0.9 million of increased stock-based compensation expense, $0.8 million primarily due to additional post market study, in each case when compared to the three months ended September 30, 2023. General and administrative expenses increased $1.3 million due to increased personnel expenses of $0.8 million, and increased stock-based compensation of $0.8 million partially offset by $0.5 million of lower audit and audit related expenses in each case when compared to the three months ended September 30, 2023.

Previous wording

Research and development expenses increased by $0.9 million, or 12.0%, to $8.3 million for the three months ended June 30, 2024, from $7.4 million for the three months ended June 30, 2023. This increase was primarily attributable to $0.8 million due to increased facility costs and $0.3 million from increased stock-based compensation.

Current wording

Research and development expenses increased by $1.7 million, or 24.5%, to $8.8 million for the three months ended September 30, 2024, from $7.1 million for the three months ended September 30, 2023. This increase was primarily attributable to $1.0 million due to increased facility costs and $0.5 million from increased stock-based compensation and $0.6 million in increased personnel costs when compared to the three months ended September 30, 2023.

Previous wording

Other income (expense), net, was income of $2.3 million for the three months ended June 30, 2024, compared to expense of $0.2 million for the three months ended June 30, 2023. The increase was primarily due to (i) decreased interest expense of $1.6 million due to the repayment of the Oxford term loan, as compared to the prior year period which also included a $0.3 million loss from the extinguishment of such term loan and (ii) increased interest income of $0.5 million, as compared to the prior year period, from higher interest rates earned on higher short term investment balances.

Current wording

Other income (expense), net, increased $2.8 million to income of $2.9 million for the three months ended September 30, 2024, compared to income of $0.1 million for the three months ended September 30, 2023. The increase was primarily due to (i) increased interest income of $1.2 million, as compared to the prior year period, from higher interest rates earned on higher short term investment balances and (ii) lower loss on extinguishment of debt of $1.4 million due to the repayment of the Oxford term loan, as compared to the prior year period.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 together with the dollar increase or decrease and percentage change in those items:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 together with the dollar increase or decrease and percentage change in those items:

Previous wording

Sales increased by $26.1 million, or 68.1%, to $64.4 million for the six months ended June 30, 2024, from $38.3 million for the six months ended June 30, 2023. The increase was due to incremental sales of 21,287 LALs primarily due to an increased LDD installed base and incremental sales of 21 LDDs from strong adoption of our RxSight technology by practices and doctors combined with an increased LDD installed base.

Current wording

Sales increased by $39.2 million, or 64.8%, to $99.7 million for the nine months ended September 30, 2024, from $60.5 million for the nine months ended September 30, 2023. The increase was due to incremental sales of 32,184 LALs primarily due to an increased LDD installed base and incremental sales of 33 LDDs from strong adoption of our RxSight technology by practices and doctors combined with an increased LDD installed base.

Previous wording

Cost of sales increased by $3.6 million, or 22.3%, to $19.5 million for the six months ended June 30, 2024 from $15.9 million for the six months ended June 30, 2023, primarily due to the increase in the number of LALs and LDDs sold during the period. Gross margin increased to 69.8% for the six months ended June 30, 2024 from 58.4% for the six months ended June 30, 2023 primarily due to favorable product mix from a greater percentage of revenue from LAL sales and increased margins on our LDD due to lower material costs from the introduction of our compact LDD during the third quarter of 2023.

Current wording

Cost of sales increased by $5.2 million, or 21.2%, to $29.6 million for the nine months ended September 30, 2024 from $24.4 million for the nine months ended September 30, 2023, primarily due to the increase in the number of LALs and LDDs sold during the period. Gross margin increased to 70.4% for the nine months ended September 30, 2024 from 59.7% for the nine months ended September 30, 2023, primarily due to favorable product mix from a greater percentage of revenue from LAL sales and increased margins on our LDD due to lower material costs from the introduction of our compact LDD during the third quarter of 2023.

Previous wording

SG&A expenses increased by $13.1 million, or 38.0%, to $47.6 million for the six months ended June 30, 2024, from $34.5 million for the six months ended June 30, 2023. This increase was primarily attributable to an increase in selling and marketing costs of $8.8 million mainly due to increased salaries from increased headcount of 37, increased sales commissions, incentive bonuses and employee benefits of $4.5 million, $1.4 million of increased stock-based compensation expense, $1.5 million in additional post market study costs, and new customer acquisition costs and increased travel costs of $0.6 million from increased LDD sales, in each case when compared to the six months ended June 30, 2023. General and administrative expenses increased $4.2 million due to increased personnel expenses of $1.3 million, $0.6 million of increased costs related to operating as a public company and increased stock-based compensation of $1.1 million.

Current wording

SG&A expenses increased by $19.6 million, or 36.5%, to $73.2 million for the nine months ended September 30, 2024, from $53.6 million for the nine months ended September 30, 2023. This increase was primarily attributable to an increase in selling and marketing costs of $14.0 million (mainly due to increased salaries from increased headcount of 36), increased sales commissions, incentive bonuses and employee benefits of $7.2 million, $2.3 million of increased stock-based compensation expense, $2.4 million in additional post market study costs, and new customer acquisition costs and increased travel costs of $0.9 million from increased LDD sales, in each case when compared to the nine months ended September 30, 2023. General and administrative expenses increased $5.5 million due to increased personnel expenses of $2.1 million, increased stock-based compensation of $1.4 million and increased facility costs of $1.4 million when compared to the nine months ended September 30, 2023.

Previous wording

Research and development expenses increased by $1.7 million, or 11.7%, to $16.3 million for the six months ended June 30, 2024, from $14.6 million for the six months ended June 30, 2023. This increase was primarily attributable to $1.0 million in increased personnel costs primarily from increased headcount and $0.8 million in increased clinical study costs and $0.6 million from increased stock-based compensation.

Current wording

Research and development expenses increased by $3.5 million, or 15.9%, to $25.2 million for the nine months ended September 30, 2024, from $21.7 million for the nine months ended September 30, 2023. This increase was primarily attributable to $0.9 million in increased personnel costs primarily from increased headcount and $1.2 million from increased stock-based compensation.

Previous wording

Other income (expense), net, was income of $3.8 million for the six months ended June 30, 2024, as compared to expense of $0.3 million for the six months ended June 30, 2023, The increase was primarily due to decreased interest expense of $3.1 million and $0.3 million loss from extinguishment of term loan due to the repayment of the Oxford term loan in 2023 and increased interest income of $0.7 million from higher interest rates earned on higher short-term investment balances.

Current wording

Other income (expense), net, was income of $6.8 million for the nine months ended September 30, 2024, as compared to expense of $0.2 million for the nine months ended September 30, 2023. The increase was primarily due to (i) decreased interest expense of $3.3 million between periods, (ii) a $1.8 million decrease in the loss from extinguishment of term loan in 2023 due to the repayment of the Oxford term loan, and (iii) increased interest income between periods of $1.9 million from higher interest rates earned on higher short-term investment balances.

Previous wording

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $233.2 million. For the six months ended June 30, 2024, and 2023, our loss from operations were $19.0 million and $26.7 million, respectively. We had an accumulated deficit of $609.8 million as of June 30, 2024.

Current wording

As of September 30, 2024, we had cash, cash equivalents and short-term investments of $237.1 million. For the nine months ended September 30, 2024, and 2023, our loss from operations were $28.2 million and $39.2 million, respectively. We had an accumulated deficit of $616.2 million as of September 30, 2024.

Previous wording

On May 8, 2024, we entered into an underwriting agreement with BofA Securities, Inc., in which we agreed to issue and sell 1,785,714 shares of our common stock in a Public Offering, pursuant to the shelf registration statement. The shares of common stock were sold at a price to the public of $56.00 per share. Under the terms of the underwriting agreement, we also granted the underwriters an option exercisable for 30 days from the date of the underwriting agreement to purchase up to an additional 267,857 shares of common stock on the same terms and conditions. The underwriters' option was exercised in full on May 10, 2024 and the Public Offering (inclusive of the underwriters' option shares) closed on May 13, 2024. We received net proceeds of approximately $107.5 million from the Public Offering, after deducting underwriters' discounts and commissions of $6.9 million and other offering expenses of $0.6 million.

Current wording

On May 8, 2024, we entered into an underwriting agreement with BofA Securities, Inc., in which we agreed to issue and sell 1,785,714 shares of our common stock in the Public Offering, pursuant to the shelf registration statement. The shares of common stock were sold at a price to the public of $56.00 per share. Under the terms of the underwriting agreement, we also granted the underwriters an option exercisable for 30 days from the date of the underwriting agreement to purchase up to an additional 267,857 shares of common stock on the same terms and conditions. The underwriters' option was exercised in full on May 10, 2024 and the Public Offering (inclusive of the underwriters' option shares) closed on May 13, 2024. We received net proceeds of approximately $107.5 million from the Public Offering, after deducting underwriters' discounts and commissions of $6.9 million and other offering expenses of $0.6 million.

Previous wording

On April 18, 2024, we entered into a new lease, and amendments to two existing leases, for three of our four facilities comprising our headquarters, manufacturing, research and development and administrative offices in Aliso Viejo, California. We entered into the new lease and amended two existing leases to extend the rental terms and options, ensure continued long-term access to our facilities, acquire additional square footage to expand manufacturing, and align the lease end dates for each of our four facilities. See Note 7 – Leases in the Notes to the condensed consolidated financial statements included in this report.

Current wording

On April 18, 2024, we entered into a new lease, and amendments to two existing leases, for three of our four facilities comprising our headquarters, manufacturing, research and development and administrative offices in Aliso Viejo, California. We entered into the new lease and amended two existing leases to extend the rental terms and options, ensure continued long-term access to our facilities, acquire additional square footage to expand manufacturing, and align the lease end dates for each of our four facilities.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024, was $13.3 million, consisting primarily of a net loss of $15.2 million and a change in operating assets and liabilities of $7.5 million, partially offset by non-cash stock-based compensation of $10.8 million and depreciation and amortization of $1.9 million.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024, was $12.7 million, consisting primarily of a net loss of $21.5 million and a change in operating assets and liabilities of $5.6 million, partially offset by non-cash stock-based compensation of $17.4 million and depreciation and amortization of $3.1 million.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2023, was $25.3 million, consisting primarily of a net loss of $27.0 million and a change in operating assets and liabilities of $5.3 million, partially offset by non-cash stock-based compensation of $7.3 million and depreciation and amortization of $1.9 million.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023, was $33.3 million, consisting primarily of a net loss of $39.4 million and a change in operating assets and liabilities of $5.9 million, partially offset by non-cash stock-based compensation of $11.3 million and depreciation and amortization of $3.0 million.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2023, was $44.0 million, consisting of net purchases of short-term investments of $41.4 million and purchases of property and equipment of $2.6 million.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024, was $100.6 million, consisting of net purchases of short-term investments of $96.0 million and purchases of property and equipment of $4.6 million.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024, was $91.4 million, consisting of net purchase of short-term investments of $87.9 million and purchases of property and equipment of $3.5 million.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2023, was $26.7 million, consisting of net maturities of short-term investments of $23.5 million and purchases of property and equipment of $3.2 million.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024, was $119.5 million consisting primarily of proceeds from issuances of common stock from the Public Offering of $108.1 million, proceeds from issuance of common stock from stock option exercises of $14.0 million partially offset by tax payments for employee stock compensation of $2.1 million.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024, was $120.3 million consisting primarily of proceeds from issuances of common stock from the Public Offering of $108.1 million and, proceeds from issuance of common stock from stock option exercises of $17.8 million, partially offset by tax payments for employee stock compensation of $4.8 million.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2023, was $66.2 million consisting primarily of proceeds from issuances of common stock from the Public Offering of $54.1 million, proceeds from issuance of common stock from at-the-market offerings of $30.5 million and proceeds from issuance of common stock from stock option exercises of $3.9 million partially offset by a net paydown of the Oxford term loan of $20.0 million.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2023, was $58.0 million consisting primarily of proceeds from issuances of common stock from our public offering of $54.1 million, proceeds from issuance of common stock for at-the-market offerings of $42.4 million and proceeds from issuance of common stock of $5.9 million partially offset by a net paydown of the June 2023 LSA of $40.0 million.

Previous wording

We enter into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement, misappropriation or other violation claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these arrangements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the fair value of these agreements is minimal.

Current wording

We enter into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement, misappropriation or other violation claim by any third party with respect to our technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these arrangements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the fair value of these agreements is minimal.

Previous wording

Uncertain macroeconomic conditions including recent inflationary pressures and the rise in interest rates have created significant uncertainty in the U.S. economy and capital markets, which is expected to continue through the remainder of 2024 and beyond and could negatively impact our financial results and liquidity.

Current wording

Uncertain macroeconomic conditions including recent inflationary pressures and the rise in interest rates have created significant uncertainty in the U.S. economy and capital markets, which may continue through the remainder of 2024 and beyond and could negatively impact our financial results and liquidity.