Cutera (NASDAQ:) Inc., a medical device company specializing in aesthetic systems, has received a notice from Nasdaq indicating a potential delisting due to its stock price falling below the required minimum. The company’s common stock has been closing under $1.00 per share for the past 32 business days, which does not meet the Nasdaq Listing Rule 5450(a)(1).
The notification, received on September 25, 2024, does not immediately affect Cutera’s listing on the Nasdaq Global Select Market. The company has until March 24, 2025, to regain compliance with the minimum bid price rule. To achieve this, the stock must close at $1.00 or higher for at least 10 consecutive business days before the compliance deadline.
If compliance is not met by the initial deadline, Cutera might qualify for an additional 180 days, provided it transfers its listing to the Nasdaq Capital Market and satisfies all other initial listing standards, excluding the bid price requirement. This may involve a reverse stock split to increase the per-share price.
In another development, Michael A. Karavitis, Cutera’s Chief Technology Officer, has resigned effective September 30, 2024. He will continue to serve in an advisory role to facilitate a smooth transition.
Cutera is assessing its options to address the deficiency and regain compliance with Nasdaq’s requirements. However, no assurance can be given that any appeal to a potential delisting notice would be successful if the company fails to meet the compliance standards by the set deadline. This information is based on Cutera’s recent SEC filing.
In other recent news, Cutera has experienced significant changes in its financial outlook. Analysts from Stephens and Piper Sandler have revised Cutera’s price target downward to $5 and $1, respectively, following disappointing quarterly figures. The company’s revenues of $38.7 million and a gross margin of 22.3% fell short of market expectations. Cutera also revised its revenue guidance for the year downward, now anticipating between $140 million and $145 million.
Despite these setbacks, Cutera reported a 41% growth in AviClear, one of its products, and identified potential cost reduction opportunities that could save an additional $10 million in 2025. The company also announced a strategic partnership with L’Oréal Japan to distribute select SkinCeuticals products in Japan.
Furthermore, Cutera’s shareholders approved all proposed items at its 2024 Annual Meeting, including the election of new directors and the ratification of BDO USA, LLP as the independent registered public accounting firm. A significant proposal approved was the amendment and restatement of the Company’s 2019 Equity Incentive Plan, increasing the total number of shares available for issuance by 2,395,275 shares.
InvestingPro Insights
Recent InvestingPro data sheds light on Cutera’s challenging financial situation, which aligns with the company’s struggle to maintain its Nasdaq listing. As of the last twelve months ending Q2 2024, Cutera’s revenue stood at $169.19 million, with a concerning revenue growth decline of -31.37%. This decline is even more pronounced in the quarterly data, with Q2 2024 showing a -44.4% revenue drop.
InvestingPro Tips highlight that Cutera is “quickly burning through cash” and “not profitable over the last twelve months,” which explains the company’s difficulty in maintaining its stock price above the $1.00 threshold. The tip indicating that “analysts do not anticipate the company will be profitable this year” further underscores the challenges Cutera faces in its efforts to regain compliance with Nasdaq’s listing requirements.
Despite these headwinds, one InvestingPro Tip notes a “significant return over the last week,” with data showing a 9.56% price total return in the past week. This recent uptick could be a positive sign as Cutera works towards meeting the $1.00 per share requirement.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Cutera’s financial health and market position.
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