TORONTO - Venus Concept Inc. (NASDAQ: NASDAQ:VERO), a global leader in medical aesthetic technology, announced the issuance of secured convertible notes totaling $2M to EW Healthcare Partners and its affiliate. The financing, revealed on Friday, is aimed at bolstering the company's financial position and supporting its strategic goals.
The notes, maturing on December 9, 2025, carry an interest rate tied to the 90-day Adjusted SOFR plus 8.5%, payable quarterly. They can be converted into common stock at $1.251 per share, with adjustments possible under certain conditions. A mandatory redemption clause is included, which could be triggered by specific events or the receipt of employee retention credit payments.
Rajiv De Silva, CEO of Venus Concept, expressed gratitude towards EW Healthcare for their long-term support, particularly in light of the company's recent challenges. Despite lower-than-expected revenue in the fourth quarter of 2023, due to restructuring and a tough financing environment, Venus Concept successfully halved its cash used in operations year-over-year. The new financing is expected to provide the necessary liquidity for the company's near-to-intermediate term objectives.
The company plans to file a Current Report on Form 8-K with the Securities and Exchange Commission (SEC) to provide additional details on the notes. The securities in this transaction are not being publicly offered and will not be registered under the Securities Act of 1933, except for a planned registration statement to cover the resale of the common stock upon conversion of the notes.
This announcement includes forward-looking statements, which are subject to risks and uncertainties that could affect the company's future performance. Venus Concept's portfolio includes a range of aesthetic device platforms and hair restoration systems, and it operates in over 60 countries and 14 direct markets. The company's financial and operational developments are closely watched by investors, given its influence in the medical aesthetics industry. This report is based on a press release statement.
InvestingPro Insights
The recent financing move by Venus Concept Inc. (NASDAQ: VERO) highlights the company's proactive approach to managing its capital structure and supporting its strategic initiatives. According to the latest data from InvestingPro, Venus Concept's market capitalization stands at $7.46 million, reflecting the scale of the business in the medical aesthetic technology sector. Despite the challenges, the company has shown a significant return over the last week, with a 14.41% price total return, which is a key metric indicating recent investor confidence.
InvestingPro Tips suggest that Venus Concept operates with a significant debt burden and is quickly burning through cash, which could be crucial factors for investors to consider. The company's valuation implies a poor free cash flow yield, underscoring the importance of the recent financing in ensuring liquidity. Moreover, analysts do not anticipate Venus Concept will be profitable this year, and they expect a sales decline in the current year, which may have influenced the terms of the convertible notes.
For investors looking for a deeper dive into Venus Concept's financial health and potential, InvestingPro offers additional insights. There are over 10 InvestingPro Tips available that can provide a more comprehensive analysis of the company's performance and outlook. Subscribers to InvestingPro can access these detailed analytics and tips, now available at a special New Year sale with discounts of up to 50%. Use coupon code ProW345 to get an additional 10% off a 2-year InvestingPro+ subscription and unlock the full potential of your investment research.
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