Cutera : Termination of Material Agreement - Form 8-K
March 05, 2024 at 04:20 pm EST
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Item 1.01. Entry into a Material Definitive Agreement.
In November 2023, Cutera, Inc. (the "Company") communicated its intention not to renew its existing manufacturing service agreement (the "Manufacturing Service Agreement") with Jabil Inc. ("Jabil"), a third-party manufacturing provider that manufactures excel V+ and AviClear devices for the Company. As a result of the termination, the Company estimated that it would have an obligation to purchase unshipped inventory from Jabil. The Company subsequently received claims from Jabil related to other amounts associated with the termination and entered into settlement discussions with Jabil.
On February 28, 2024, the Company and Jabil entered into a settlement agreement related to the non-renewal of the Manufacturing Service Agreement (the "Settlement Agreement"). The Settlement Agreement provides for a payment by the Company of $19.5 million, to be offset by $1.3 million in amounts owned by Jabil. The $19.5 million payment to Jabil relates to the Company's receipt of $13.5 million of inventory and $0.3 million of equipment and the payment of $5.7 million as compensation for expenses either previously incurred by Jabil or associated with the non-renewal of the Manufacturing Service Agreement.
The foregoing description of the Settlement Agreement is not complete and is qualified in its entirety by the Settlement Agreement, which will be filed as an exhibit to the Company's periodic report for the three months ended March 31, 2024.
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Cutera, Inc. develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. The Company distributes third-party manufactured skincare products and secret systems and consumables. Its system platforms include AviClear, enlighten, excel, truSculpt, Secret PRO, Secret RF, and xeo. The Companyâs Cutera Core segment consists of the Companyâs systems, consumables, skincare, and service businesses. The Cutera Core segment develops, distributes and manufactures energy-based systems for medical practitioners in addition to distributing third-party manufactured skincare products in Japan. The Companyâs AviClear segment consists of the AviClear business. The Companyâs acne solution, AviClear, is a prescription-free, drug-free laser treatment for the treatment of mild to severe acne. Its products include CUTERA, ACUTIP 500, AVITM, AVI360, AVIANALYTICSTM, AVICARE COOLGLIDE, and more.