Cutera, Inc. Announces Proposed Private Offering of $200 Million of Convertible Senior Notes
May 24 2022 - 7:47AM
Business Wire
Cutera, Inc. (Nasdaq: CUTR), a leading provider of aesthetic and
dermatology solutions, today announced that it intends to offer,
subject to market conditions and other factors, $200 million
aggregate principal amount of convertible senior notes due 2028
(the “notes”) in a private placement to persons reasonably believed
to be qualified institutional buyers pursuant to Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”), and
in a separate concurrent private placement pursuant to Section
4(a)(2) under the Act. Cutera also intends to grant the initial
purchasers of the notes an option to purchase up to an additional
$30 million aggregate principal amount of the notes.
Entities affiliated with J. Daniel Plants, Cutera’s Chairman,
have also indicated an interest in purchasing up to $10 million
aggregate principal amount of the notes in a separate concurrent
private placement under Section 4(a)(2) of the Act (the “concurrent
private placement”). These investors are under no obligation to
purchase any of the notes offered in the concurrent private
placement and their interest in purchasing such notes is not a
commitment to do so. Any notes purchased by such affiliated
investor may reduce the aggregate principal amount of notes offered
hereby by a corresponding aggregate principal amount.
The notes will be general senior, unsecured obligations of
Cutera and will accrue interest payable semiannually in arrears.
The notes will be convertible into cash, shares of Cutera’s common
stock (“common stock”) or a combination of cash and shares of
Cutera’s common stock, at Cutera’s election. The interest rate,
initial conversion rate and other terms of the notes will be
determined at the time of pricing of the offering.
Cutera intends to use a portion of the net proceeds from the
offering to pay the aggregate cost of the capped call transactions
described below. If the initial purchasers exercise their option to
purchase additional notes, Cutera expects to use a portion of the
net proceeds from the sale of such additional notes to enter into
additional capped call transactions. Cutera also intends to use a
portion of the net proceeds from the offering for the Notes
Exchange described below and the remainder for general corporate
purposes, which may include working capital, capital expenditures
and potential acquisitions and strategic transactions.
Contemporaneously with the pricing of the offering, Cutera
intends to enter into privately negotiated transactions with
certain holders of its 2.25% Convertible Senior Notes Due 2026 (the
“2026 Notes”) to exchange up to $69.1 million in aggregate
principal amount of the 2026 Notes on terms to be negotiated with
such holders for cash and shares of Cutera’s common stock (the
“Notes Exchange”). Cutera expects that holders of 2026 Notes that
surrender their 2026 Notes for exchange as described above may
enter into or unwind various derivatives with respect to its common
stock (including entering into or unwinding derivatives with one or
more of the initial purchasers in this offering or their respective
affiliates) and/or purchase or sell shares of its common stock
concurrently with or shortly after the pricing of the notes.
In connection with the pricing of the notes, Cutera expects to
enter into capped call transactions with one or more of the initial
purchasers and/or their respective affiliates and/or other
financial institutions (the “option counterparties”). The capped
call transactions are expected generally to reduce potential
dilution to Cutera’s common stock upon any conversion of notes,
with such reduction subject to a cap. If the initial purchasers
exercise their option to purchase additional notes, Cutera expects
to enter into additional capped call transactions with the option
counterparties.
Cutera expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates may enter into
various derivative transactions with respect to Cutera’s common
stock and/or purchase shares of Cutera’s common stock concurrently
with or shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Cutera’s common stock or the notes at that time.
In addition, Cutera expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
Cutera’s common stock and/or purchasing or selling Cutera’s common
stock or other securities of Cutera in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so on each exercise
date for the capped call transactions). This activity could also
cause or prevent an increase or a decrease in the market price of
Cutera’s common stock or the notes, and to the extent the activity
occurs during any observation period related to a conversion of
notes, this could affect the value of the consideration that a
noteholder will receive upon conversion of its notes.
Neither the notes, nor any shares of Cutera’s common stock
potentially issuable upon conversion of the notes, have been, nor
will be, registered under the Securities Act or any state
securities laws and, unless so registered, may not be offered or
sold in the United States absent registration or an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20220524005563/en/
Anne Werdan Director, Corporate Communications 415-657-5500
IR@cutera.com
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