Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement
On May 24, 2022, Cutera, Inc. (the "Company") entered into a purchase agreement
(the "Purchase Agreement") with Goldman Sachs & Co. LLC, as representative of
the several initial purchasers named in Schedule I thereto (the "Initial
Purchasers"), to issue and sell $200 million aggregate principal amount of 2.25%
Convertible Senior Notes due 2028 (the "Notes"). In addition, the Company
granted the Initial Purchasers an option to purchase, during a 13-day period
beginning on, and including, the date on which the Notes were first issued, up
to an additional $30 million aggregate principal amount of Notes on the same
terms and conditions. The Initial Purchasers exercised their option in full on
May 25, 2022, bringing the total aggregate principal amount of the Notes to
$230 million.
The Purchase Agreement includes customary representations, warranties and
covenants by the Company and customary closing conditions. Under the terms of
the Purchase Agreement, the Company has agreed to indemnify the Initial
Purchasers against certain liabilities.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference to the Purchase Agreement attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Voce Purchase Agreement
On May 24, 2022, the Company entered into a purchase agreement (the "Voce
Purchase Agreement") with Voce Capital Management LLC, an entity affiliated with
J. Daniel Plants, the Company's Executive Chairman ("Voce"), to issue and sell
$10 million in aggregate principal amount of the Notes in a private placement
pursuant to an exemption from the registration requirements of the Securities
Act afforded by Section 4(a)(2) of the Securities Act.
The Voce Purchase Agreement includes customary representations, warranties and
covenants by the Company and customary closing conditions.
The description of the Voce Purchase Agreement contained herein is qualified in
its entirety by reference to the Voce Purchase Agreement attached as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Convertible Notes and the Indenture
On May 24, 2022, the Company priced the Notes. The Notes are general senior
unsecured obligations of the Company. The Notes were issued pursuant to an
Indenture, dated May 27, 2022 (the "Indenture"), between the Company and U.S.
Bank Trust Company, National Association, as trustee (the "Trustee").
The Notes will mature on June 1, 2028, unless earlier redeemed, repurchased or
converted. The Notes will bear interest from May 27, 2022 at a rate of 2.25% per
annum payable semiannually in arrears on June 1 and December 1 of each year
beginning December 1, 2022. The Notes may bear additional interest under
specified circumstances relating to the Company's failure to comply with its
reporting obligations under the Indenture or if the Notes are not freely
tradeable as required by the Indenture.
The Notes will be convertible at the option of the holders of the Notes at any
time prior to the close of business on the business day immediately preceding
March 1, 2028 only under the following circumstances: (1) during any fiscal
quarter commencing after the fiscal quarter ending on September 30, 2022 (and
only during such fiscal quarter), if the last reported sale price of the
Company's common stock, par value $0.001 per share (hereinafter referred to as
"common stock"), for at least 20 trading days (whether or not consecutive)
during a period of 30 consecutive trading days ending on and including, the last
trading day of the immediately preceding fiscal quarter is greater than or equal
to 130% of the conversion price on each applicable trading day; (2) during the
five-business day period after any five consecutive trading day period (the
"measurement period") in which the trading price per $1,000 principal amount of
Notes for each trading day of the measurement period was less than 98% of the
product of the last reported sale price of the Company's common stock and the
conversion rate for the Notes on each such trading day; (3) if the Company calls
such Notes for redemption, at any time prior to the close of business on the
second scheduled trading day immediately preceding the redemption date; or
(4) upon the occurrence of specified corporate events. On or after March 1,
2028, holders may convert all or any portion of their Notes at any time prior to
the close of business on the second scheduled trading day immediately preceding
the maturity date regardless of the foregoing conditions. Upon conversion, the
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Company will satisfy its conversion obligation by paying or delivering, as the
case may be, cash, shares of common stock or a combination of cash and shares of
common stock, at the Company's election. The conversion rate for the Notes will
initially be 18.9860 shares of the common stock per $1,000 principal amount of
Notes, which is equivalent to an initial conversion price of approximately
$52.67 per share of the common stock. The initial conversion price of the Notes
represents a premium of approximately 27.5% to the $41.31 per share last
reported sale price of the common stock on May 24, 2022. The conversion rate is
subject to adjustment under certain circumstances in accordance with the terms
of the Indenture.
The Company may not redeem the Notes prior to June 5, 2025. The Company may
redeem for cash all or any portion of the Notes, at its option, on or after
June 5, 2025, if the last reported sale price of the common stock has been at
least 130% of the conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day period
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 8.01 of this Current Report on
Form 8-K is incorporated herein by reference.
Convertible Notes
The Company offered and sold the Notes to the Initial Purchasers in reliance on
the exemption from the registration requirements provided by Section 4(a)(2) of
the Securities Act, and for resale by the Initial Purchasers to qualified
institutional buyers pursuant to the exemption from registration requirements
provided by Rule 144A under the Securities Act. The Company offered and sold the
Notes to Voce in reliance on the exemption from the registration requirements
provided by Section 4(a)(2) of the Securities Act. The Company relied on these
exemptions from registration based in part on representations made by the
Initial Purchasers in the Purchase Agreement pursuant to which the Company sold
the Notes to the Initial Purchasers, and on representations made by Voce in the
Voce Purchase Agreement pursuant to which the Company sold the Notes to Voce.
The shares of the common stock issuable upon conversion of the Notes, if any,
have not been registered under the Securities Act and may not be offered or sold
in the United States absent registration or an applicable exemption from the
registration requirements.
To the extent that any shares of the common stock are issued upon conversion of
the Notes, they will be issued in transactions anticipated to be exempt from
registration under the Securities Act by virtue of Section 3(a)(9) thereof,
because no commission or other remuneration is expected to be paid in connection
with conversion of the Notes and any resulting issuance of shares of the common
stock.
2026 Notes Exchange
On May 24, 2022, the Company entered into privately-negotiated exchange
agreements with certain holders of the Company's outstanding 2026 Notes with
respect to the exchange of approximately $45.8 million in cash (excluding
$0.3 million in cash for the payment of accrued interest) and 1.4 million shares
of common stock for approximately $69.1 million in aggregate principal amount of
the Company's outstanding 2026 Notes (the "2026 Notes Exchange"). Closings of
the 2026 Notes Exchange took place on or about May 27, 2022. The Company used a
portion of the net proceeds from the offering of the Notes to fund the cash
portion of the 2026 Notes Exchange. Immediately following the closings of the
2026 Notes Exchange, approximately $69.1 million in aggregate principal amount
of the 2026 Notes remained outstanding.
The 2026 Notes Exchange was conducted as a private placement and the shares of
common stock issued in the 2026 Notes Exchange were issued pursuant to the
exemption from the registration requirements of the Securities Act afforded by
Section 3(a)(9) of the Securities Act and were offered
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only to persons believed to be a "qualified institutional buyer" within the
meaning of Rule 144A promulgated under the Securities Act. The Company is
relying on this exemption from registration based on the representations made by
the holders of the Notes participating in the 2026 Notes Exchange.
Item 8.01. Other Events.
Press Releases
On May 24, 2022, the Company issued a press release announcing its intention to
offer convertible senior notes in a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
On May 25, 2022, the Company issued a press release announcing the pricing of
its offering of the Notes in a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act. A copy of the press
release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
4.1 Indenture, dated as of May 27, 2022, between Cutera, Inc. and U.S.
Bank Trust Company, National Association, as trustee.
4.2 Form of 2.25% Convertible Senior Notes due 2028 (included in Exhibit
4.1).
10.1 Purchase Agreement, dated May 24, 2022, between Cutera, Inc. and
Goldman Sachs & Co. LLC, as representative of the several initial
purchasers named in Schedule I thereto.
10.2 Purchase Agreement, dated May 24, 2022, between Cutera, Inc. and
Voce Capital Management LLC.
10.3 Form of Capped Call Transaction Confirmation.
10.4 Third Amendment, dated May 24, 2022, to the Loan and Security
Agreement, dated July 9, 2020 by and between Cutera, Inc., and Silicon
Valley Bank.
99.1 Press Release issued by Cutera, Inc., dated May 24, 2022.
99.2 Press Release issued by Cutera, Inc., dated May 25, 2022.
104 Cover Page Interactive Data File (formatted as inline XBRL).
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