cutr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to_____.

Commission File Number: 000-50644

Cutera, Inc.

(Exact name of registrant as specified in its charter)


Delaware			77-0492262
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3240 Bayshore Blvd., Brisbane, California 94005

(Address of principal executive offices)

(415) 657-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.001 par value)	CUTR	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No x

The number of shares of Registrant’s common stock issued and outstanding as of May 6, 2022, was 18,163,389.

Table of Contents

CUTERA, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	36

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39
	Signature	40

Table of Contents

In this Quarterly Report on Form 10-Q, “Cutera,” “the Company,” “we,” “us” and “its” refer to Cutera, Inc. and its consolidated subsidiaries.

This report may contain references to its proprietary intellectual property, including among others, trademarks for its systems and ancillary products, "AviClearTM," "Cutera®," "AccuTip 500®," “CoolGlide®,” “CoolGlide excel®,” “enlighten®,” “excel HR®,” “excel V®,” “excel V+®,” “LimeLight®,” "MyQ®," “Pearl®,” “PICO Genesis®,” “ProWave 770®,” “Solera®,” “Titan®,” “truSculpt®,” “truSculpt iDTM,” “truSculpt flexTM,”"Secret PRO,” “Secret RF®,” and “xeo®.”

These trademarks and trade names are the property of Cutera or the property of its consolidated subsidiaries and are protected under applicable intellectual property laws. Solely for convenience, its trademarks and tradenames referred to in this Quarterly Report on Form 10-Q may appear without the ® or symbols, but such references are not intended to indicate in any way that the Company will not assert, to the fullest extent under applicable law, its rights to these trademarks and tradenames.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CUTERA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	57,732	$	164,164
Marketable investments	74,047		—
Accounts receivable, net of allowance for credit losses of $1,093 and $899, respectively	33,169		31,449
Inventories	51,680		39,503
Other current assets and prepaid expenses	20,156		14,545
Total current assets	236,784		249,661

Property and equipment, net	3,009		3,019
Deferred tax asset	737		778
Operating lease right-of-use assets	14,330		14,627
Goodwill	1,339		1,339
Other long-term assets	9,792		10,169
Restricted cash	700		700
Total assets	$	266,691	$	280,293

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	13,646	$	7,891
Accrued liabilities	48,044		54,100
Operating lease liabilities	2,628		2,419
Deferred revenue	9,719		9,490
Total current liabilities	74,037		73,900

Deferred revenue, net of current portion	1,345		1,335
Operating lease liabilities, net of current portion	13,007		13,483
Convertible notes, net of unamortized debt issuance costs of $3,788 and $4,007, respectively	134,462		134,243
Other long-term liabilities	680		763
Total liabilities	223,531		223,724

Commitments and Contingencies (Note 12)

Stockholders’ equity:
Common stock, $0.001 par value; authorized: 50,000,000 shares; issued and outstanding: 18,132,949 and 17,995,344 shares at March 31, 2022 and December 31, 2021, respectively	18		18
Additional paid-in capital	116,468		114,724
Accumulated other comprehensive loss	(11)		—
Accumulated deficit	(73,315)		(58,173)
Total stockholders’ equity	43,160		56,569
Total liabilities and stockholders’ equity	$	266,691	$	280,293

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Net revenue:
Products	$	52,066	$	43,551
Service	5,948		6,117
Total net revenue	58,014		49,668
Cost of revenue:
Products	22,912		18,331
Service	3,314		3,627
Total cost of revenue	26,226		21,958
Gross profit	31,788		27,710

Operating expenses:
Sales and marketing	24,944		15,068
Research and development	6,499		4,112
General and administrative	13,502		7,365
Total operating expenses	44,945		26,545
(Loss) income from operations	(13,157)		1,165
Interest and other expense, net:
Amortization of debt issuance costs	(219)		(52)
Interest on convertible notes	(778)		(191)
Other expense, net	(755)		(1,023)
Total interest and other expense, net	(1,752)		(1,266)
Loss before income taxes	(14,909)		(101)
Income tax expense	233		258
Net loss	$	(15,142)	$	(359)

Net loss per share:
Basic	$	(0.84)	$	(0.02)
Diluted	$	(0.84)	$	(0.02)
Weighted-average number of shares used in per share calculations:
Basic	18,080		17,768
Diluted	18,080		17,768

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(15,142)	$	(359)
Other comprehensive loss:
Available-for-sale investments
Net change in unrealized loss on available-for-sale investments	(11)		—
Other comprehensive loss, net of tax	(11)		—
Comprehensive loss	$	(15,153)	$	(359)

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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CUTERA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Three Months Ended March 31, 2022 and 2021


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2021	17,995,344	$	18	$	114,724	$	(58,173)	$	—	$	56,569
Exercise of stock options	7,459	—		151		—		—		151
Purchase of capped call	—	—		—		—		—		—
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	130,146	—		(2,450)		—		—		(2,450)
Stock-based compensation expense	—	—		4,043		—		—		4,043
Net loss	—	—		—		(15,142)				(15,142)
Net change in unrealized loss on available-for-sale investments	—	—		—		—		(11)		(11)
Balance at March 31, 2022	18,132,949	$	18	$	116,468	$	(73,315)	$	(11)	$	43,160


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2020	17,679,232	$	18	$	117,097	$	(60,235)	$	—

SEC Form 10-Q filed by Cutera Inc.