Sight Sciences secures $5 million in additional loan funding

Published 11/12/2024, 23:00
Sight Sciences secures $5 million in additional loan funding

Sight Sciences , Inc. (NASDAQ:SGHT), a medical device company with a market capitalization of approximately $200 million, announced on Wednesday that it has drawn down an additional $5 million from its existing credit facility with Hercules Capital (NYSE:HTGC), Inc. and affiliates. This transaction increases the total borrowed amount under the agreement to $40 million. According to InvestingPro data, the company maintains a strong liquidity position, with cash reserves exceeding its total debt obligations.

The latest funding, referred to as Tranche 1(b) Term Loan Advance, is part of a senior secured term loan facility that could reach up to $65 million. The loan is set to mature on July 1, 2028, and carries an interest rate of the greater of 10.35% or the Wall Street Journal prime rate plus 2.35%. Interest on the loan is payable monthly. InvestingPro analysis reveals the company maintains an impressive current ratio of 10.18, indicating strong ability to meet its short-term obligations.

Upon the final repayment, whether at maturity or through earlier prepayment, Sight Sciences is obligated to pay an exit fee calculated at 5.95% of the funded amounts. The company has indicated that the proceeds from the Tranche Loan will be used for general corporate purposes, aligning with its strategy to achieve cash flow breakeven without the need to secure additional equity capital.

In connection with the loan, Sight Sciences also issued warrants to the lenders, allowing them to purchase shares of the company's common stock. The number of shares available for purchase through the warrants equals two percent of the Tranche Loan principal, based on the volume-weighted average price of the stock preceding the closing date. These warrants are exercisable for seven years and are tradeable under Rule 144 of the Securities Act of 1933, as amended.

In other recent news, Sight Sciences Inc. reported a slight year-over-year revenue increase in its third-quarter earnings, despite falling short of expectations. The company's third-quarter revenue rose 1% year-over-year to $20.2 million, with surgical glaucoma revenue accounting for $18.6 million. However, the company's surgical glaucoma revenue saw a sequential decrease of 8% and dry eye revenue declined by 4% to $1.5 million for the quarter. UBS has initiated coverage of Sight Sciences with a Buy rating, forecasting strong sales growth by 2026. The analyst from UBS expects the company's TearCare Dry Eye solution to drive double-digit sales growth and gross margin expansion that exceeds consensus estimates for 2026 and beyond.

Sight Sciences plans to enhance sales performance and strategic positioning in response to commercial challenges, and remains optimistic about growth in the surgical glaucoma and dry eye segments in 2025. Despite current setbacks, the company is contesting the final 2025 Medicare payment rule, which did not grant device-intensive status to OMNI procedures.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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