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New words:
adequacy, bear, broader, bundled, certainty, charge, competitor, concurrent, criteria, delivery, deposit, discontinued, distinct, dock, earn, embedded, essence, evidence, exclude, expedite, fixed, garnered, gel, good, handling, hardware, history, incidental, incremental, influenced, installation, installed, IP, lender, margin, mix, objective, observable, overhead, ownership, past, perspective, persuasive, physically, profit, qualitative, quantitative, refund, regional, regularly, relevant, reliability, reliable, remitted, repair, residual, RESONIC, scope, scrap, shipped, shipping, SSP, title, train, training, transportation, typically, unforeseen, unique, unpaid, variable, verify, warehouse, warranty
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large, modify, settlement, stabilizing
Financial report summary
?Competition
CuteraRisks
- We will require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.
- We have determined there is material uncertainty about our ability to continue as a going concern; as a result, we could have difficulty finding additional financing.
- We anticipate needing additional financing over the longer term to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.
- We have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance.
- RAP utilizes potentially dangerous energy levels and we could face liability for claims related to the RAP device that would be costly and would damage our reputation.
- We cannot assure you that we will generate revenue or become profitable in the future.
- The use of lasers to remove tattoos has inherent dangers and our device will be used in conjunction with lasers for tattoo removal.
- Because we have not yet launched the RAP device, we have been using our available capital resources for development of the commercial units and have not yet generated any revenues; therefore, we may not be able to continue as a going concern.
- Our clinical experience with the RAP device for tattoos is limited to black tattoos with one type of laser, and future trials may not result in similar outcomes.
- Our clinical experience with the RAP device for cellulite is limited to a single treatment session, and future trials may not result in similar outcomes.
- Clinical trials may be necessary to support future product submissions to the FDA. These clinical trials will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit. Delays or failures in our clinical trials will prevent us from commercializing any modified or new products and will adversely affect our business, operating results and prospects.
- If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval for or commercialize our products.
- The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects.
- We may be required to suspend or discontinue clinical trials due to side effects or other safety risks that could preclude approval of our products.
- We utilize a single manufacturer, Sanmina Corporation, for the manufacture of the RAP device and expect to continue to do so for commercial devices. Risks associated with the manufacturing of our products could reduce our gross margins and negatively affect our operating results.
- We rely on a contract manufacturer, Sanmina Corporation, and our agreement with them requires us to place purchase orders with significant lead times that are noncancellable under the agreement. We may ultimately have to pay for inventory that we don't need if we can't accurately forecast demand.
- We have limited experience in assembling and testing our products and may encounter problems or delays in the assembly of our products or fail to meet certain regulatory requirements which could result in an adverse effect on our business and financial results.
- Certain parts used in the manufacturing of our equipment may experience shortages in global supply which could impact our ability to manufacture our device for customers or maintain research and development timelines.
- We have limited sales, marketing, and distribution capabilities or arrangements, and will need to substantially build-out these capabilities as we move towards commercialization of our products.
- Achieving and maintaining market acceptance of the RAP device for tattoo removal and cellulite could be negatively impacted by many factors, which may prevent us from successfully commercializing the RAP device.
- If important assumptions we have made about what prospective clients want and are willing to purchase are inaccurate, our business and operating results may be adversely affected.
- The sizes of the markets for our RAP device have not been established with precision, and may be smaller than we estimate.
- All of our near-term indications are elective procedures that will be not be reimbursable and to the extent there is a general reduction in discretionary spending that could result in a reduction in the demand for these services.
- We expect to operate in a highly competitive market, we may face competition from large, well-established medical device and product manufacturers with significant resources, and we may not be able to compete effectively.
- Rapidly changing technology in life sciences could make the products we are developing obsolete.
- If we do not enhance our product offerings through our research and development efforts on a timely basis, we may fail to effectively compete or become profitable.
- Potential complications from the RAP device or future versions of the RAP device may not be revealed by our clinical experience or other testing. Undetected errors or defects in the RAP device or future versions of the RAP device could harm our reputation, decrease the market acceptance of the RAP device or expose us to product liability claims.
- If we lose key management personnel, or if we fail to recruit additional highly skilled personnel, our ability to expand our operations and increase the size of our company will be impaired, and we may experience loss of markets or market share and we may become less competitive.
- If we are unable to establish good relationships with physicians, our business could be negatively affected.
- We have limited brand awareness and there is no assurance that we will be able to achieve brand awareness.
- We may expend our limited resources to pursue a particular product or indication and fail to capitalize on products or indications that may be more profitable or for which there is a greater likelihood of success.
- Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.
- To date, all of our experience operating the RAP device has been in a clinical or research and development setting and we have had no experience operating in a practitioner's office without supervision by our personnel.
- Downturns in the economy or economic uncertainty may reduce patient and customer demand for our systems and services, which could adversely affect our business, financial condition or results of operations.
- It is difficult to forecast our future performance and our financial results may fluctuate unpredictably.
- Our success depends on growing physician adoption and use of our systems and adoption by physicians in cosmetic dermatology and plastic surgery.
- Our success depends in part upon patient satisfaction with the effectiveness of our tattoo removal and cellulite treatments.
- If there is not sufficient patient demand for our procedures, our financial results and future prospects will be negatively impacted.
- We offer credit terms to some qualified customers. In the event that any of these customers default on the amounts payable to us, our financial results may be adversely affected.
- The aesthetic equipment market is characterized by rapid innovation. To compete effectively, we must develop and/or acquire new products and services, seek regulatory clearance and maintain regulatory compliance, market new products successfully, and identify new markets for our technology.
- We may be unsuccessful in expanding and managing our direct sales and marketing forces effectively.
- Our expanded use of social media platforms presents new risks and challenges, which, if not managed properly, could have a material adverse effect on our business, financial condition and results of operations.
- Third parties may attempt to reverse engineer or produce counterfeit versions of our devices and cartridges which may negatively affect our revenues and our reputation, or harm patients and subject us to product liability claims.
- Security breaches and other disruptions could compromise our information, interrupt our business, and expose us to liability.
- There is no guarantee that the FDA will grant 510(k) or de novo clearance or PMA approval of our future products and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.
- If we fail to obtain and maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining FDA clearances or approvals for our future products or product enhancements, our ability to commercially distribute and market these products could suffer.
- U.S. legislative or FDA regulatory reforms or changes in internal FDA policies and procedures may make it more difficult and costly for us to obtain regulatory approval of our product candidates and to manufacture, market and distribute our products after approval is obtained.
- Modifications to our products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until clearances or approvals are obtained.
- The Generation 2.0 device, which has been cleared by the FDA for tattoo removal and cellulite, has been modified for commercial launch as Generation 2.2 and requires a special 510(k) filing, which may not be cleared.
- Even if our products are cleared or approved by the FDA, if we or our suppliers fail to comply with ongoing FDA requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.
- Our products may in the future be subject to product recalls that could harm our reputation, business and financial results.
- If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
- We have licensed certain intellectual property rights for our technology from MD Anderson, and if our license agreement with MD Anderson is terminated, our business will be materially harmed.
- We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
- If we are unable to protect the intellectual property used in our products, others may be able to copy our innovations which may impair our ability to compete effectively in our markets.
- We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
- If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.
- If third parties claim that our products infringe their intellectual property rights, we may be forced to expend significant financial resources and management time defending against such actions and our financial condition and our results of operations could suffer.
- Our stock price has been and may continue to be sporadically traded and volatile, which could result in substantial losses for investors.
- Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.
- Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock.
- The concentration of our common stock ownership by a single shareholder will limit your ability to influence corporate matters.
- Certain provisions in our organizational documents could enable our Board to prevent or delay a change of control.
- We have no intention of declaring dividends in the foreseeable future.
- Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could cause our financial reports to be inaccurate.
- Failure to continue improving our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.
- We may become subject to legal proceedings that could have a material adverse impact on our business, results of operations and financial condition.
- Economic uncertainty or economic deterioration could adversely affect us.
- Our employees and independent contractors, including consultants, manufacturers, distributors, commercial collaborators, service providers and other vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operations.
- As an EGC under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
- Techniques employed by short sellers have in the past and may in the future drive down the market price of our common stock.
- We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause our stock price to decline.
Management Discussion
- Operating activities. Net cash used in operating activities was $11.5 million during the year ended December 31, 2020, and consisted of a net loss of $14.5 million and a net change in operating assets and liabilities of $0.7 million offset by non-cash items of $3.8 million. The change in operating assets mainly included an increase in inventory of $0.4 million and a net decrease in operating liabilities of $0.3 million, comprised of a decrease in accounts payable of $0.6 million offset by an increase in accrued liabilities of $0.3 million. The increase in inventory was largely driven by the increase in spare parts for our devices at December 31, 2020. The decrease in accounts payable included $0.3 million due to larger payables at December 31, 2019 to a few of our largest vendors and unpaid additions to property and equipment and accounts payable of $0.3 million. The amounts owed to vendors were not of the same magnitude at December 31, 2020. The increase in accrued liabilities was driven primarily by the addition of new headcount and the resulting need for accruals pertaining to employee incentives. Non-cash items consisted of stock-based compensation of $3.2 million, depreciation and amortization expense of $0.3 million, and the write-down of intangible assets and equipment of $0.3 million.