Filed by Restoration Robotics, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Restoration Robotics, Inc.
Commission File No.: 001-38238
|
|
Investor Presentation July 2019
|
|
Forward Looking Statements Cautionary Statement Regarding Forward-Looking Statements This slide presentation contains “forward-looking” statements. These statements, as they relate to Restoration Robotics or Venus Concept, the management of either such company or the proposed transactions involving Restoration Robotics and Venus Concept, including the proposed merger, the expected revenue, operating results and other financial information, involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These statements are based on current plans, estimates and projections, and therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from results contemplated by these forward-looking statements. Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the business and future financial results of the medical device industry, and other legal, regulatory and economic developments. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions which are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Neither Restoration Robotics nor Venus Concept gives any assurance that either Restoration Robotics or Venus Concept will achieve its expectations. These forward-looking statements are subject to risks, uncertainties, and other factors, including those described in the “Risk Factors” section of Restoration Robotics’ Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 20, 2019, as amended on April 29, 2019 and July 9, 2019, the Restoration Robotics’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed on May 15, 2019 and as amended on July 9, 2019 and the Risk Factors contained in the Registration Statement on Form S-4 and the prospectus and definitive proxy statement contained therein for the proposed merger between Restoration Robotics and Venus Concept, but which remains subject to update and comments from the SEC, as well as any reports that Restoration Robotics may file with the SEC in the future. All forward-looking statements included in this document are based upon information available to Restoration Robotics and Venus Concept as of the date hereof, and neither Restoration Robotics nor Venus Concept assumes any obligation to update or revise such forward-looking statements to reflect events or circumstances that subsequently occur or of which Restoration Robotics or Venus Concept hereafter becomes aware, except to the extent required by law. 2
|
|
Merger of Venus Concept and Restoration Robotics: Opportunity to Create a Leading Global Medical Aesthetics Company Definitive merger agreement to combine the companies in an all-stock transaction announced on March 15, 2019 • Fully-diluted ownership of ‘new-co’ = 85% Venus Concept, 15% Restoration Robotics • Transaction is expected to close in the third quarter of 2019. Subject to customary closing conditions, including the approval by stockholders of Restoration Robotics and Venus Concept and receipt of all necessary regulatory approvals. 3
|
|
Investment Highlights Leading player in global minimally invasive/non-invasive medical aesthetics markets • Leading player in the minimally invasive surgical hair restoration market • Diversified product portfolio with 10 major platforms addressing major procedure categories in our target markets including: • Hair restoration, hair removal, skin rejuvenation, wrinkle reduction, cellulite reduction, body contouring, fat reduction (abdomen & flanks) • Global reach with commercial presence in 60+ countries including direct selling presence in 29 global markets • Strong R&D capabilities with expertise in non-invasive, energy-based technologies and robotics, 3D pre-operative planning and software • Attractive financial profile • 2018 pro-forma revenue: $124.6 million • ~57% of pro-forma revenue from subscription model • 2018 pro-forma gross profit margin: ~70% • 2019 pro-forma revenue expectation: $130 - $135 million • Multi-year profitability improvement opportunity fueled, in part, by significant deal synergies 4
|
|
Compelling Global Market Opportunity The market for aesthetic procedures is large, growing, global in scale, and comprised of both surgical and non-surgical procedures • Global Cosmetic Procedures (surgical and non-surgical) = 23 million in 20171 (US = ~19%) • Non-Surgical Cosmetic Procedures = 12.6 million in 20171 (US = ~22%) • Venus Concept technologies address ~96% of annual global non-surgical, non-injectable, cosmetic procedures2 • U.S. Non-Surgical Cosmetic Procedure Market3 = ~$2 billion in 2017 (~$800 million excluding injectable procedures) • Global Hair Restoration Market = $4.1 billion in 2016 • Global surgical hair restoration patients = 597k in 20164, compared to ~217k patients in 2006, a 10.7% CAGR over the period 2018 Sales by Market (Pro-Forma) Venus - Hair RR - Hair Venus – Aesthetics 2018 Sales, by Geography (Pro-Forma) U.S. - Venus U.S. - RR OUS - Venus OUS – RR 1. Data from the International Society of Aesthetic Plastic Surgery (ISAPS) International Study on Aesthetic/Cosmetic procedures performed in 2017 2. Company Estimates based on data from ISAPS 2017 Survey: Annual global non-surgical cosmetic procedures = 12.6 million; injectable cosmetic procedures = 8.6 million in 2017 3. Data from The American Society of Aesthetic Plastic Surgery, “Cosmetic (Aesthetic) Surgery National Data Bank Statistics” Report 2017 4. International Society of Hair Restoration Surgery (ISHRS): 2017 Practice Census Results Report 5
|
|
Venus Concept Global Aesthetic Product Portfolio Venus Legacy Venus Viva Venus Versa Venus Freeze plus Venus Velocity Venus Fiore Venus Glow Venus Heal Venus Bliss •Wrinkle reduction • Cellulite reduction •Muscle aches/pain •Wrinkle reduction •Cellulite reduction •Skin tightening • Body contouring Skin rejuvenation •Wrinkle reduction •Skin rejuvenation •Wrinkle reduction •Skin rejuvenation •Hair removal •Wrinkle reduction •Skin rejuvenation •Hair removal •Cellulite reduction •Body contouring •Wrinkle reduction •Wrinkle reduction •Cellulite reduction •Skin tightening •Hair removal •Permanent hair Reduction •Hair removal •Permanent hair Reduction n/a •Vaginal rejuvenation •Skin rejuvenation (Dermabrasion) n/a Cellulite reduction •Muscle aches/pain Muscle spasms •Back pain •Soft tissue injuries Non-Invasive lipolysis of abdomen & flanks •Muscle aches/pain •Muscle spasms •Cellulite reduction •Skin tightening •Circumferential reduction •Cellulite reduction •Wrinkle reduction Procedure(s)- US: Procedure(s)- OUS: 6
|
|
Comprehensive Hair Restoration Portfolio Manual FUE Robotic FUE NeoGraft and ARTAS: differentiated solutions serving the $4.1 billion global hair restoration market 7
|
|
Diversified Revenue Streams Systems Other Products Services Subscriptions/Leases - Cash sales - Skincare, hair and other consumables - NeoGraft technician services - 2to5 Internal advertising agency - Extended warranty sales Combined Company Revenues, by Product: Year Ended December 31, Three Months Ended March 31, 2018 2019 (Q1) 2018 (Q1) Subscription—Systems $71,540 $15,742 $15,567 Products—Systems1 35,338 9,868 6,283 Products—Other2 4,412 13,28,1,002 Services3 13,280 3,036 3,504 Total Revenue $124,570 $29,974 $26,356 Source: Restoration Robotics’ S-4 registration statement,10-k for twelve months ending December 31, 2018 and 10-Q for the three months ending March 31, 2019. 1. Includes $11.4 million of HAIR ‘systems revenue’ for the FY18 period, and $3.6 million and $2.0 million for Q1’19 and Q1’18 periods, respectively. 2. Includes $7,971 million of HAIR ‘procedure based’ revenue the for FY18 period, and $1.4 million and $2.5 million for Q1’19 and Q1’18 periods, respectively. 3. Includes $1.9 million of HAIR ‘service related’ revenue for FY18,, and $0.5 million for Q1’19 and Q1’18 periods, respectively. 8
|
|
Venus Concept’s Unique Business Model High cost of ownership Modest up-front licensing fee No credit or financing requirement, lowers barrier to entry for non-traditional market Risk of technology obsolescence 36-month contract period High-touch customer philosophy focused on long- term relationship/opportunity Cost and effort required for patient acquisition Opportunity to upgrade to new technology mi-contract Reduced obsolescence risk Incremental staffing requirements and high staff turnover Neograft technicians Provides flexibility and limits Doctor Involvement Practice enhancement programs 2 two 5 ad agency 9
|
|
Complementary Services Offering: Traditional Ad Agency MedTech Company Digital Ad Agency Digital Services Listing management services SEO SEM Reputation Management Google Adwords Creative assets Websites Analytics Paid Social Email campaigns Review Engagement & Monitoring Retargeting 10
|
|
Complementary Services Offering: IoT- Internet of Things Practice Enhancement Allows us to offer the data in a form of dashboards to the clinics, helping them optimize their ROI, improve their service and monitor device usage Revenue Share Program New program based on device usage is intended to reduce the entrance barrier in some product categories (hair removal pilot started in Q2 2019) IoT capability will help identify clinics that require more marketing support (2two5), and/or clinical training and is intended to help them be more successful with the device 11
|
|
Combined R&D Team Positioned to Innovate R&D Team of ~55 located in Israel and San Jose, CA Non-Invasive energy sources for aesthetic applications Pulsed Electro Magnetic Fields Radio Frequency Intense Pulsed Light Lasers Robotic Technology 3D Pre- Operative Planning Software Machine Vision Machine Learning Artificial Intelligence 12
|
|
Significant Commercial Infrastructure to Address Sizable Global Customer Opportunity Global Commercial Infrastructure Hybrid Model of Direct Reps, Independent Contractors and Distribution Partners • Global Direct Selling Representatives1 : 195+ • 24 Countries/29 International Markets • 1099 NeoGrafters1: 51 • Distributors1: agreements in 36 Countries U.S Customer Opportunity • Aesthetics Market • Traditional • Dermatologists (12,000) • Plastic Surgeons (7,100) • Non-Traditional • Family Practice (113,500) • Medical Spas (4,200) • Hair Restoration Market • Dermatologists (12,000) • Plastic Surgeons (7,100) 1. As of December 31, 2019; Direct selling representatives team are full time employees and include sales management and physician engagement team. 13
|
|
Multiple Levers to Drive Revenue Growth • Launch new products & expand clinical indications for existing products • Near-term new product introductions: Venus Bliss and Venus Fiore • Expand FDA (and other regulatory agencies) clearances for new clinical indications • Penetrate the global hair restoration market • Drive adoption and utilization in non-traditional specialty areas • Family & General Practices, Medical Spas • Increase presence/market share in new and existing markets outside of North America • Leverage Venus Concept’s subscription model to new market channels • Expand complementary service offerings • 2two5 Marketing, Revenue Sharing Program, Clinical & Technical Support Services 14
|
|
Strong IP Portfolio to Support Long Term Product Development • Intellectual Property: • As of December 31, 2018, Venus Concept’s and Restoration Robotics’1 combined patent portfolios are comprised of: • Issued U.S. patents = 93 • Pending U.S. patent applications = 28 • Issued foreign counterpart patents = 116 • Pending foreign counterpart patent applications = 45 1. Source: Restoration Robotics 10/k filing as of December 31, 2108 15
|
|
Management Team & Board of Directors Dom Serafino CEO, Venus Concept Domenic Della Penna CFO, Venus Concept New Board of Directors Juliet Bakker Scott Barry Garheng Kong Louise Lacchin Fritz LaPorte Fred Moll Tony Natale Dom Serafino Keith Sullivan 16
|
|
Transaction & Pro-Forma Equity Ownership Summary: • Transaction: • Stock for stock merger; fully-diluted ownership of ‘new-co’ = 85% Venus Concept, 15% Restoration Robotics • Equity Commitment Letter: • $21 million – led by EW Healthcare Partners along with HealthQuest Capital, Madryn, Longitude, Fred Moll (Director) and Aperture Venture Partners • Convertible Debt Financing: • $5 million – led by Fred Moll (Director) and InterWest Partners • Pro-forma Equity Ownership Summary*: • Est. Total Shares Outstanding upon closing = 283,431,313 • Est. Fully Diluted Shares Outstanding upon closing= 335,175,309 •Concurrent with closing of the Merger, the combined company anticipates effecting a 1 for 15 reverse stock split. • Est. Total Shares Outstanding, post-split = 18,895,421 • Est. Fully Diluted Shares Outstanding, post-split = 22,345,021 *Source: S-4 filing; share data as of March 31, 2019. Does not included Restoration Robotics Shares to be Issued upon conversion of $7.8 million Unsecured Senior Subordinated Convertible Promissory Notes issued by Venus Concept on 6/25/19, which total 16,723, 842 (pre-split) and 1,114,923 (post-split). Full equity ownership details on slide 20 17
|
|
Financial Summary: Pro-Forma Income Statement *Source: S-4 filing
Year Ended December 31, 2018
Three Months Ended March 31, 2019
Pro Forma Combined Pro Forma Combined Including Equity Commitment Letter Financing and the Restoration Robotics Note conversion Pro Forma Combined Pro Forma Combined Including Equity Commitment Letter Financing and the Restoration Robotics Note Conversion
(in thousands of U.S. dollars, except per share data)
Combined Statement of Operations Data:
Revenue Cost of revenue Gross profit Operating expenses Selling and marketing Research and development General and administrative Total operating expenses Loss from operations Interest expense Foreign exchange loss Other expense, net Loss before income taxes Provision for income taxes Net loss Non-controlling interests Net loss attributable to shareholders Net loss attributable to shareholders Net loss per share, basic and diluted
$124,570 37,247 87,323 55,519 15,421 47,194 118,134 (30,811) (7,585) (3,266) (549) (42,211) 2,262 $(44,473) 750 $(45,223) $(0.18) $124,570 37,247 87,323 55,519 15,421 47,194 118,134 (30,811) (7,585) (3,266) (549) (42,211) 2,262 $(44,473) 750 $(45,223) $(0.16) 29,974 9,356 20,618 14,102 3,548 11,832 29,482 (8,864) (2,420) (697) (46) (12,027) 900 $(12,927) 168 $(13,095) $(0.05) 29,974 9,356 20,618 14,102 3,548 11,832 29,482 (8,864) (2,420) (697) (46) (12,027) 900 $(12,927) 168 $(13,095) $(0.05)
18
|
|
Financial Summary: Pro-Forma Balance Sheet Unaudited Pro Forma Condensed Combined Balance Sheet March 31, 2019 (in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,304 $ 14,957 $ — $ 23,261 $ 19,500 $ 42,761 Accounts receivable 48,253 6,699 — 54,952 — 54,952 Inventory 19,873 5,207 260 25,340 — 25,340 Other current assets 4,776 1,239 — 6,015 — 6,015 81,206 28,102 260 109,568 19,500 129,068 Property and equipment, net 3,434 1,471 — 4,905 — 4,905 Restricted cash — 83 — 83 — 83 Long-term accounts receivable 38,156 — — 38,156 — 38,156 Deferred tax assets 49 — — 49 — 49 Other assets 815 166 — 981 — 981 Intangible assets 5,119 — 12,300 17,419 — 17,419 Goodwill 2,603 — 20,297 22,900 — 22,900 TOTAL ASSETS $131,382 $29,822 $32,856 $194,060 $19,500 $213,560 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Line of credit $ 6,678 $ — $ — $ 6,678 $ — $ 6,678 Accounts payable 7,521 4,193 — 11,714 — 11,714 Accrued expenses and other current liabilities 13,334 4,435 7,300 24,946 — 24,946 (123) Deferred revenue 3,864 1,384 146 5,394 — 5,394 Current portion of long-term debt — 1,974 — 1,974 — 1,974 31,397 11,986 7,323 50,706 0 50,706 Deferred revenue 1,630 — — 1,630 — 1,630 Deferred tax liabilities, net 2,155 — — 2,155 — 2,155 Other long-term liabilities 3,722 655 (283) 4,094 — 4,094 Convertible promissory notes — 5,000 — 5,000 (5,000) Long-term debt 60,746 17,655 — 78,401 — 78,401 TOTAL LIABILITIES 99,650 35,296 7,040 141,986 -5,000 136,986 TOTAL SHAREHOLDERS’ EQUITY 31,732 (5,474) 25,816 52,074 24,500 76,574 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 131,382 $ 29,822 $ 32,856 $ 194,060 $ 19,500 $ 213,560 Venus Concept Ltd. Restoration Robotics, Inc. Pro Forma Merger Adjustments Pro Forma Combined Pro Forma Financing Adjustments Pro Forma Combined Including Equity Commitment Letter Financing and the Restoration Robotics Note Conversion *Source: S/4 filing 19
|
|
Transaction & Pro-Forma Equity Ownership Details: *Source: S/4 filing; share data as of March 31, 2019. Does not included Restoration Robotics Shares to be Issued upon closing related to the Unsecured Senior Subordinated Convertible Promissory Notes from 6/25/19, which total 16,723, 842 (pre-split) and 1,114,923 (post-split) Restoration Robotics - Issued to Management as Retention Bonus 1,000,000 Restoration Robotics - Restricted Stock Vested upon Closing 270,000 Restoration Robotics - Common Shares Outstanding (3/31/19) 40,753,012 Sub-Total: Restoration Robotics Estimated Shares 42,023,012 Venus Concept Ordinary Shares Outstanding as of December 31, 2018 8,282,309 Venus Concept Preferred Shares Outstanding as of December 31, 2018 15,981,112 Sub-Total: Venus Concept Total Shares Outstanding as of December 31, 2018 24,263,421 Conversion Exchange Ratio 8.6506 Estimated Shares of Restoration Robotics Common Stock Issued to Venus Concept Shareholders upon Closing 209,893,150 Plus: Shares Issued for Equity Commitment Letter upon Closing 25,454,546 Plus: Shares Issued for Convertible Note to Frederick Moll, M.D. & InterWest Partners IX, LP upon Closing 6,060,606 Estimated Total Shares Outstanding upon Closing 283,431,313 Estimated Options Outstanding upon Closing 49,045,009 Estimated Warrants Outstanding upon Closing 2,698,987 Sub-Total: Estimated Fully Diluted Shares Outstanding upon Closing 335,175,309 Concurrent with Closing of the Merger, the Combined Company Anticipates Effecting a 1 for 15 Reverse Stock Split 1/15 Sub-Total: Estimated Total Shares Outstanding, Post-Split 18,895,421 Sub-Total: Estimated Fully Diluted Shares Outstanding, Post-Split 22,345,021 20
|
|
Thank You