Item 2.05 Costs Associated with Exit or Disposal Activities
On October 17, 2023, Sight Sciences, Inc. (the “Company”) informed its employees that it is implementing a targeted plan, commencing immediately, intended to reduce operating expenses, improve cost efficiencies, better align its operating structure for long-term, profitable growth, and further extend its cash runway (the “Plan”), as the Company navigates the proposed local coverage determinations published by five of the seven Medicare Administrative Contractors in the second quarter of 2023. The Plan is designed to help protect the Company’s cash position, drive enhanced focus on the Company’s key strategic priorities, and maintain its path to breakeven without the need for any additional equity capital.
Pursuant to the Plan, the Company intends to (a) reduce its headcount by 25 employees, or approximately 10% of its global workforce, and (b) reduce its operating expenses, principally by (i) implementing measures to limit marketing costs, primarily within its Dry Eye business segment and limit general administrative costs, which measures are designed to streamline the organization and enhance organizational communication, and (ii) delaying replacement hires for certain roles. Specifically, the Company intends to (i) reduce its commercial infrastructure and operating expenses within its Dry Eye business segment including approximately half of its Dry Eye sales and marketing employees as the Company seeks to shift its commercial focus in this segment to market access and reimbursement execution and account maintenance; and (ii) eliminate certain positions in the Surgical Glaucoma commercial support infrastructure that it deems non-essential to continued Surgical Glaucoma account penetration and revenue growth.
As a result of implementing the Plan, the Company expects to record a cash restructuring charge of approximately $1.3 million in the fourth quarter of 2023, consisting primarily of one-time employee severance and benefits contribution costs. The estimates of the charges the Company expects to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ materially. In addition, the Company may incur other charges, costs or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of, or in connection with, the implementation of the Plan. The Company plans to adjust its financial results presented in accordance with the generally accepted accounting principles in the United States (“GAAP”) for the fourth quarter and year ending December 31, 2023 to exclude these non-core operating costs from its results of operations through the presentation of non-GAAP financial measures.
Item 7.01 Regulation FD Disclosure
The Company reaffirms its revenue guidance for the year ending December 31, 2023 of $80.0 million to $82.0 million, which represents growth of approximately 12% to 15% compared to the year ended December 31, 2022. In addition, the Company estimates the workforce reductions alone will yield savings of approximately $7.9 million on an annualized basis. The Company plans to provide updated expectations regarding its quarterly average adjusted operating expense guidance during its third quarter 2023 earnings call, taking into account the factors discussed in this Current Report on Form 8-K (this “Current Report”).*
Cautionary Note Regarding Forward-Looking Statements
This Current Report, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of 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”), which statements are subject to considerable risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this Current Report that are not statements of historical fact, including statements about the Company’s beliefs and estimates, are forward-looking statements and should be evaluated as such. Such statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “designed,” “seeks,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast” and other similar expressions. The Company bases these forward-looking statements on management’s current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors management believes are appropriate under the circumstances at such time. Although management believes these forward-
