Cutera, Inc. (NASDAQ:CUTR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
(a) On July 9, 2020, Cutera, Inc. (the “Company”) entered into a Loan and Security Agreement (the “Loan Agreement”), by and between the Company, as borrower, and Silicon Valley Bank, as the lender (the “Lender”). The Loan Agreement, which replaces an existing loan and security agreement with Wells Fargo Bank, N.A., provides for a four-year secured revolving loan facility in an aggregate principal amount of up to $30.0 million. The revolving credit available under the revolving loan facility were undrawn on the closing date. The proceeds of the revolving loans may be used for general corporate purposes. In connection with the entry into the Loan Agreement, the Company terminated the existing loan and security agreement with Wells Fargo Bank, N.A. as further described below in Item 1.02 of this Current Report on Form 8-K.
Under the terms of the new Loan Agreement with the Lender, revolving loans accrue interest at a per annum rate of the greater of (i) 1.75% above the prime rate and (ii) 5.00%. Prime Rate is defined as the rate of interest per annum published in The Wall Street Journal or any successor publication thereto as the “prime rate”. If such rate of interest from The Wall Street Journal becomes unavailable, the “Prime Rate” shall mean the rate of interest per annum announced by the Lender as its prime rate in effect. In each case, in the event such prime rate is less than zero, such rate shall be deemed to be zero for purposes of the Loan Agreement. The Company is also obligated to pay other customary commitment fees and termination fees customary for a credit facility of this size and type.
The Company may borrow, repay and re-borrow funds under the revolving loan facility until the fourth anniversary of the closing date, at which time the revolving loan facility terminates, and all outstanding revolving loans, together with all accrued and unpaid interest, must be repaid. Subject to the satisfaction of certain liquidity ratios, the full $30.0 million of revolving loan commitments will be available for the Company to borrower on a non-formula basis. If the Company is unable to meet these liquidity ratios, then availability under the revolving line is calculated as 80% of the Company’s accounts receivable. As of the closing date, the Company meets the liquidity ratios and the full $30.0 million of loan commitments are available to be borrowed.
The Company’s obligations under the Loan Agreement are secured by substantially all of the assets of the Company.
The Loan Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt, grant liens, make acquisitions, suffer changes in control, make investments, make certain dividends or distributions, repurchase stock, dispose of assets, and enter into transactions with affiliates, in each case, subject to limitations and exceptions set forth in the Loan Agreement. The Company is also required to maintain compliance with a minimum revenue covenant.
The Loan Agreement also contains customary events of default that include, among other things, certain payment defaults, covenant defaults, a material adverse change default, insolvency and bankruptcy defaults, cross defaults to other agreements, inaccuracy of representations and warranties defaults and government approvals defaults. If an event of default exists, the Lender may require immediate payment of all obligations under the Loan Agreement and may exercise certain other rights and remedies provided for under the Loan Agreement, the other loan documents and applicable law. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Loan Agreement at a per annum rate equal to 4.00% above the applicable interest rate.
The foregoing description of the Loan Agreement is a summary and is qualified in its entirety by the terms and conditions of the Loan Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
(b) On July 9, 2020, the “Company entered into the Third Amendment to Lease (the “Amendment”) by and between the Company and BMR-Bayshore Boulevard LP (“BMR-Bayshore”, formerly known as BMR-Bayshore Boulevard LLC (“BMR-Bayshore LLC”) and successor-in-interest Gal-Brisbane, L.P. (the “Original Landlord”)) to amend the Brisbane Technology Park Lease dated August 5, 2003 by and between the Company and the Original Landlord (the “Original Lease”), as amended by that certain First Amendment to Lease dated August 11, 2010 by and between the Company and BMR-Bayshore LLC (the “First Amendment”) and as further amended by that certain Second Amendment to Lease dated July 6, 2017 by and between the Company and BMR-Bayshore (the “Second Amendment”, and, collectively with the First Amendment and the Original Lease, the “Lease”) to which the Company leases its headquarters building located at 3240 Bayshore Boulevard, Brisbane, California. The Amendment provides for the following:
The foregoing description of the Amendment is a summary and is qualified in its entirety by the terms and conditions of the Amendment, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference
Item 1.0Termination of a Material Definitive Agreement
On July 9, 2020, in connection with the entry into the Loan Agreement, the Company terminated that certain Loan and Security Agreement, as amended, originally dated as of May 30, 2018, by and between the Company and Wells Fargo Bank, N.A. which provided for a revolving line of credit in the original principal amount of up to $25,000,000 (the “Revolving Line of Credit”). The Revolving Line of Credit was set to terminate on May 30, 2021.
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 by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
CUTERA INC Exhibit
EX-10.1 2 ex_193496.htm EXHIBIT 10.1 ex_193496.htm Exhibit 10.1 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of [___________],…
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About Cutera, Inc. (NASDAQ:CUTR)
Cutera, Inc. is a medical device company. The Company is engaged in the design, development, manufacture, marketing and servicing of laser and other energy-based aesthetics systems for practitioners across the world. The Company offers products based on product platforms, such as enlighten, excel HR, truSculpt, excel V and xeo, each of which enables physicians and other practitioners to perform aesthetic procedures for customers. Each of its laser and other energy-based platforms consists of one or more hand pieces and a console that incorporates a universal graphical user interface, a laser or other energy-based module, control system software and high voltage electronics. enlighten is a dual wavelength (1,064 nanometer + 532 nanometer) and dual pulse duration (750 picosecond (ps) and 2 nanosecond (ns)) laser system. excel V is a vascular and benign pigmented lesion treatment platform designed for the core-market of dermatologists and plastic surgeons.