Venus Concept Inc. Announces Debt Restructuring, Preliminary Third Quarter 2023 Revenue Results and Updates Fiscal Year 2023 Revenue Guidance
The loan modification and exchange agreements provide for, among other things:
- Deferral of the approximately
$7.7 millionannual payment of principal plus accrued interest, previously due December 8, 2023, under the Company’s Main Street Priority Loan Facility with CNB (“MSLP Note”) until loan maturity on December 8, 2025;
- Deferral of approximately
$3.9 million, or 50% of the annual payment of principal plus accrued interest, previously due December 8, 2024, under the MSLP Note until loan maturity on December 8, 2025;
- Exchange of
$5.0 millionof the Company’s Secured Subordinated Convertible Notes with Madryn for newly-created Series X Senior Convertible Preferred Stock, which pays a dividend in kind, on a quarterly basis, equal to an annual rate of 12.5%; and
- Remaining outstanding Secured Subordinated Convertible Notes with Madryn subject to a new conversion price of
$24per share and interest payable in kind, on a quarterly basis, at an annual rate of 90-day Adjusted SOFR + 8.5%.
“We appreciate the valuable partnership and continued support from our lenders,
“CNB and Madryn have been critical to the Company’s evolution and we are grateful for the role that the Main Street Lending Program and our lenders have played in financing the company over the last several years. We will continue to look for ways to improve our balance sheet as we progress towards achieving cash flow breakeven in the second half of 2024,” added
Additional information regarding the amended credit agreements and the Senior Preferred Stock will be set forth in a Current Report on Form 8-K, which
Canaccord Genuity acted as financial advisor to the Company in the debt restructuring.
The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. The securities may not be offered or sold in
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in the described offering, nor shall there be any offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Preliminary Third Quarter 2023 Revenue and Updated Fiscal Year 2023 Revenue Guidance:
Preliminary total revenue for the third quarter of 2023 is expected to be in the range of
“We are pleased with the progress we have made in our strategic turnaround plan in 2023. Our restructuring efforts to reduce expenses are exceeding expectations, and repositioning of the business in the US and internationally supports growth in 2024,” said
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. In some cases, you can identify these statements by words such as such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements include, but are not limited to, statements about the anticipated benefits of the debt restructuring, including the Company’s goal to achieve cash flow breakeven in the second half of 2024. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which the Company operates and management's beliefs and assumptions and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this communication may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, general economic conditions, including the global economic impact of COVID-19, and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements and those risks and uncertainties described under Part II Item 1A—“Risk Factors” in our Quarterly Reports on Form 10-Q and Part I Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the date of this communication. Unless required by law, the Company does not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
Investor Relations Contact:
ICR Westwickeon behalf of Venus Concept: Mike Piccinino, CFA VenusConceptIR@westwicke.com
Source: Venus Concept Inc.