RxSight, Inc. 10-Q

Item 5. Other Information. Amended Term Loan with Oxford Finance, LLC On May 3, 2022, we entered into a Second Amendment the (“Second Amendment”) to our existing loan and security agreement (as amended through the Second Amendment, the (“Amended Term Loan”) dated as of October 29, 2020 (“Term Loan”), with Oxford Finance LLC, (“Oxford Finance”), as the lender and collateral agent thereunder. The Amended Term Loan increased the loan and security agreement to $60.0 million, of which $40.0 million was fully funded as of May 3, 2022. Under the Amended Term Loan, we may borrow an additional term loan of up to $10.0 million through June 30, 2023, provided we satisfy the applicable drawdown conditions and achieve trailing twelve-month sales revenues of not less than $40,000,000 for the measurement period ending February 28, 2023, the measurement period ending March 31, 2023 or the measurement period ending April 30, 2023. Subject to the terms and conditions of the Amended Term Loan, we may also borrow another term loan of up to $10.0 million through September 30, 2023, provided we satisfy the applicable drawdown conditions and achieve trailing twelve-month sales revenues of not less than $50.0 million for the measurement period ending May 31, 2023, the measurement period ending June 30, 2023 or the measurement period ending July 31, 2023. The Amended Term Loan bears interest at a rate per annum equal to the greater of (i) 9.25% or (ii) 1-Month Term SOFR (or, if greater, 0.16%) plus an applicable margin of 9.09%. If an event of default under the Amended Term Loan is continuing, additional interest of 5% applies. The Amended Term Loan extends the maturity date of the loan and security agreement, which was due to expire on October 1, 2025, to February 1, 2027. We refer to our $60 million Amended Term Loan as our credit facility. The Amended Term Loan is secured by substantially all of our personal property other than our intellectual property, but includes any accounts receivable, other amounts owed and any proceeds of intellectual property. We also entered into a negative pledge arrangement with the collateral agent and lenders where we agreed not to encumber any of our intellectual property. The Amended Term Loan also includes certain customary representations and warranties, affirmative and negative covenants, and events of default, including a financial performance to plan covenant that requires us to achieve certain minimum net sales revenues, measured on a trailing twelve month basis, as set forth in the Second Amendment. The Amended Term Loan requires 36 months of interest-only payments, followed by 22-months of amortization. If we are in compliance with our performance to plan covenant through April 1, 2025 and have not provided an IP lien election notice before May 1, 2025, the interest-only period is extended by 12 months, and the amortization period is reduced to nine months. Payments are due on the first day of each month in arrears. All unpaid amounts under the Amended Term Loan mature on February 1, 2027. We may elect to prepay the loans under the credit facility at any time in full or in part; however, we may only elect to prepay the loans in part once, in an amount not less than $5.0 million. Any amounts prepaid may not be subsequently reborrowed. Under the Amended Term Loan, a final payment (the “Final Payment”) will be due at the earlier of the maturity date, acceleration of the loans, or a voluntary or mandatory prepayment of the loans, in an amount equal to (a) if the Final Payment is due on or after January 1, 2022 through and including October 31, 2022, three percent (3.00%) of the original principal amount (or, in the case of a partial prepayment, the amount of principal to be prepaid) of the loans, (b) if the Final Payment is due on or after November 1, 2022 through and including October 31, 2023, four percent (4.00%) of the original principal amount (or, in the case of a partial prepayment, the amount of principal to be prepaid) of the loans, and (c) if the Final Payment is due on or after November 1, 2023, five percent (5.00%) of the original principal amount (or, in the case of a partial prepayment, the amount of principal to be prepaid) of the loans. The Final Payment is being accreted to the carrying value of the debt as a debt premium and interest expense over the life of the loan using the effective interest method. 98 We are required to pay an amendment fee of $125,000 to the lenders that is directly attributable to execution of the Amended Term Loan transaction. These issuance costs will be recorded as a discount to the carrying amount of the debt and will be amortized to interest expense over the effective term of the debt using the effective interest method. The loans may be accelerated by Oxford Finance in the event of a default. A copy of the Second Amendment is attached hereto as Exhibit 10.3. The foregoing description of the Second Amendment and Amended Term Loan do not purport to be complete and are qualified in their entirety by reference to the Second Amendment. This disclosure is provided in this Part II, Item 5 in lieu of disclosure under Items 1.01(a) and 2.03(a) of Form 8-K. 99 Item 6. E xhibits. The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q unless otherwise stated. EXHIBIT INDEX Exhibit Incorporated by Reference Number Description Form File No. Exhibit Filing Date 10.1* Sublease, dated as of April 4, 2022, by and between the Registrant and Compass Bible Church for premises located at 5 Columbia, Aliso Viejo, California 92656. 10.2* Lease Addendum, dated as of April 5, 2022, by and between the Registrant and Clifford D. Downs for premises located at 5 Columbia, Aliso Viejo, California 92656. 10.3*+ Second Amendment to Loan and Security Agreement, by and among the Registrant, Oxford Finance LLC, as collateral agent, and the lenders party thereto, dated as of May 3, 2022. 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1† Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 100 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover page Interactive Data File (embedded with the Inline XBRL document). * Filed herewith. + Portions of the exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. The Company agrees to furnish to the Securities and Exchange Commission a copy of any omitted portions of the exhibit upon request. † The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of RxSight Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. 101 SIG NATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RxSight, Inc. Date: May 5, 2022 By: /s/ Ron Kurtz, M.D. Ron Kurtz, M.D. Chief Executive Officer (Principal Executive Officer) Date: May 5, 2022 By: /s/ Shelley Thunen Shelley Thunen Chief Financial Officer (Principal Financial and Accounting Officer) 102