Sight Sciences sees new $65 million secured facility via Hercules

By William Gullotti

Buffalo, N.Y., Jan. 23 – Sight Sciences, Inc. signed a senior secured term loan facility with Hercules Capital, Inc. on Jan. 22, according to an 8-K filing with the Securities and Exchange Commission.

All facility borrowings are secured by a perfected first priority security interest in substantially all of Sight Science’s existing and after-acquired assets, subject to customary exceptions.

Structured as a delayed-draw facility that matures July 1, 2028, Sight Sciences will have access to up to $65 million of term loans, with the first $35 million tranche funded at closing. Tranche 1(b), totaling $5 million, will be available in a single draw through Dec. 15.

Tranche 2 totals $10 million and will not become available to the borrow until certain performance milestones are satisfied. The second tranche may be drawn in minimum increments of $5 million and will cease to be available Sept. 15, 2025.

Tranche 3, which totals $15 million and is subject to the same minimum increments, is only available until Aug. 1, 2026. Borrowings drawn from the third tranche are subject to the lender’s investment committee’s sole approval. The availability period, which is also the facility’s interest only period, may be extended by six months to Feb. 1, 2027 upon achievement of certain performance milestones.

Borrowings bear interest at the greater of 10.35% and the Wall Street Journal prime rate plus 235 basis points. Upon an event of default, the rate will increase by 300 bps.

At closing, the borrower paid a 75-bps facility charge on the initial drawdown, and each subsequent tranche will be subject to the same fee. The borrower is also required to pay an exit fee equal to 5.95% of the initial tranche upon full repayment of the term loans.

Term loans may be prepaid at any time, but prepayments are subject to an incrementally declining premium on the amount prepaid. The premium for any prepayment made within the first year is 3%, stepping down to 2% for the following year and to 1% for any payment thereafter.

The company is subject to a minimum cash covenant, requiring it to maintain an unrestricted cash balance of at least 85% of total secured obligations. The required percentage will drop to 35% upon achieving certain performance milestones.

Additionally, Hercules will be issued warrants to purchase a number of shares of Sight Sciences common stock equal to 2% of the initial tranche, or $700,000, divided by the volume-weighted average price of the company’s common stock for the five-day period preceding closing.

Like the facility charge, each subsequent draw will result in an amount of warrants issued to Hercules, calculated with the same percentage and VWAP conditions, based on the amount borrowed.

Each warrant will remain exercisable for seven years from its applicable date of issue and be tradeable under Rule 144.

Sight’s net proceeds from the initial tranche were $34.6 million, after deducting estimated debt issuance costs, fees and expenses. The proceeds were used at closing to repay and terminate the company’s prior term loan from MidCap Financial Trust. The transaction cost $37.7 million.

Sight Sciences is an eyecare technology company that develops and commercializes ocular surgical devices.

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