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Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
New warehouse facility
On January 16, 2024, the Company entered into a thirty-seven-month lease agreement. The lease is for 53,000 square feet of warehouse space in Hayward, California. This space was leased to consolidate current inventory locations in Northern California. The term of the lease expires on February 28, 2027, and requires total payments over the lease term of approximately $2.5 million.
Change in classification of AviClear parts and devices not placed in service
In November 2023, the Company introduced a new business model for AviClear, providing for the purchase of the device upfront, with a corresponding reduction in ongoing treatment costs. From the FDA approval in April 2022 through October 2023, AviClear devices were leased to customers, and parts and devices not yet placed in service were recorded as property and equipment on the condensed consolidated balance sheet. These were further categorized as assets under construction in Note 5. Balance Sheet Details to the condensed consolidated financial statements. As a result of the new business model, the Company has determined that AviClear parts and devices not currently leased will be classified as inventories at December 31, 2023. AviClear devices currently leased will continue to be classified as property and equipment on the condensed consolidated balance sheet. The Company is currently evaluating the potential impact on the carrying value of parts and devices resulting from the reclassification from property and equipment to inventories. As of September 30, 2023, the balances of AviClear assets under construction and AviClear devices, net of accumulated depreciation, were $28.5 million and $36.6 million, respectively.
Termination of skincare distribution agreement
On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a Business Transfer and Termination Agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and
together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024.
In the nine months ended September 30, 2023, and 2022, revenue from the distribution of skincare products was $24.7 million and $30.7 million, respectively, representing 15% and 17% of the Company’s consolidated revenue, respectively.
Non-renewal of manufacturing service agreement
In November 2023, the Company communicated its intention not to renew its existing manufacturing service agreement (“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 signed a settlement agreement (“Settlement Agreement”) for the non-renewal of the Manufacturing Service Agreement. The Settlement Agreement provided for a payment by Cutera to Jabil of $19.5 million, to be offset by $1.3 million in amounts owed by Jabil. The $19.5 million payment to Jabil relates to the Company's receipt of $13.5 million of inventories 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 Services Agreement. The Company will also write off approximately $1.1 million of costs that were capitalized during the manufacturing service agreement period.