Venus Concept Announces Loan Purchase and Completion of First Phase of Refinancing

Rhea-AI Summary

Venus Concept Inc. announced the purchase of its Main Street Lending Program Loan by Madryn Asset Management for up to $5.0 million, along with the completion of the first phase of refinancing. The company also entered into a Loan and Security Agreement with Madryn to provide debt financing. The MSLP Loan had an outstanding balance of $51.3 million as of December 31, 2023.

Insights

Financial Analyst

The transaction between Venus Concept and Madryn Asset Management underscores a strategic shift in Venus's debt structure. By altering the lender from the City National Bank of Florida to Madryn, Venus Concept is signaling a pivot in its financial strategy, potentially aimed at better aligning its debt obligations with its operational goals. The undisclosed purchase amount of the Main Street Lending Program Loan invites speculation but reflects confidence by Madryn in Venus's ability to execute its turnaround plan. With a important focus on achieving cash flow breakeven and sustainability, the bridge financing indicates immediate liquidity needs, yet the limited amount drawn suggests disciplined capital management. Investors should monitor the terms of this new debt, as interest rates and repayment schedules could materially impact Venus's financials and operational flexibility.

Market Research Analyst

Venus Concept's recent financial maneuver through Madryn Asset Management is a demonstration of the increased agility companies are seeking within the highly competitive medical aesthetics market. The industry is marked by rapid innovation and a growing demand for non-invasive procedures, which implies a continuous need for investment in research and technology. This debt restructuring could be a strategic move to stabilize the company's finances to better capitalize on market opportunities. Investors should take note of Venus's market position and growth trajectory within the sector to understand how this refinancing aligns with broader market trends and competitive dynamics.

MSLP Loan Purchase and Short-term Bridge Financing of Up To $5.0 million By Madryn Asset Management

TORONTO, April 24, 2024 (GLOBE NEWSWIRE) -- Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ: VERO), a global medical aesthetic technology leader, today announced that on April 23, 2024, its existing Main Street Lending Program Loan (“MSLP Loan”) was purchased by affiliates of Madryn Asset Management, LP (“Madryn”) for an undisclosed amount from the City National Bank of Florida (“CNB”) with the consent of the Company (the “MSLP Loan Purchase”). Following close of the MSLP Loan Purchase, Venus Concept and Madryn entered into a Loan and Security Agreement (“Madryn Loan Agreement”), dated April 23, 2024, pursuant to which Madryn provides an aggregate principal amount of up to $5.0 million in debt financing to the Company to support near-term liquidity requirements. A principal amount of $2.0 million net of transaction fees was drawn by the Company at the close of the transaction.

On December 8, 2020, Venus entered into a loan in the aggregate amount of $50.0 million for which CNB served as a lender pursuant to the Main Street Priority Loan Facility as established by the Board of Governors of the Federal Reserve System Section 13(3) of the Federal Reserve Act. On October 4, 2023, and again on January 18, 2024, the Company modified certain terms of the MSLP Loan Agreement as a part of an ongoing debt restructuring plan. As of December 31, 2023, the MSLP Loan had an outstanding balance of $51.3 million.

“We want to thank the City National Bank of Florida for their support of the Company through the Main Street Lending Program,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. “As the Company continues implementing its turnaround plans, debt restructuring and financing remain important near-term priorities. Madryn’s purchase of our outstanding senior debt facility and extension of bridge financing provides critical support in this process. We appreciate Madryn’s ongoing support of the Company and look forward to working towards cash flow breakeven and sustainable profitability. We will look to provide an update as soon as possible.”

“Madryn is pleased to support Venus Concept in its continued journey towards restructuring the overall operational and financial profile of the business,” said Avinash Amin, MD, Managing Partner at Madryn Asset Management, LP. “Our purchase of the senior debt from CNB and providing bridge financing to the Company is another step in our continued partnership with Venus Concept as it works towards the goal of returning to growth and sustained profitability as a public company.”

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,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, 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, 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, 2023. 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.

About Venus Concept

Venus Concept is an innovative global medical aesthetic technology leader with a broad product portfolio of minimally invasive and non-invasive medical aesthetic and hair restoration technologies and reaches over 60 countries and 12 direct markets. Venus Concept's product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Versa PRO, Venus Legacy, Venus Velocity, Venus Viva, Venus Glow, Venus Bliss, Venus Bliss MAX, Venus Epileve, Venus Viva MD and AI.ME. Venus Concept's hair restoration systems include NeoGraft® and the ARTAS iX® Robotic Hair Restoration system. Venus Concept has been backed by leading healthcare industry growth equity investors including EW Healthcare Partners (formerly Essex Woodlands), HealthQuest Capital, Longitude Capital Management, Aperture Venture Partners, and Masters Special Situations.

FAQ

What was announced by Venus Concept regarding its loan purchase?

Venus Concept announced the purchase of its Main Street Lending Program Loan by Madryn Asset Management for up to $5.0 million.

Who purchased the MSLP Loan from Venus Concept?

Affiliates of Madryn Asset Management, LP purchased the MSLP Loan from Venus Concept.

How much debt financing did Madryn provide to Venus Concept?

Madryn provided an aggregate principal amount of up to $5.0 million in debt financing to Venus Concept.

What was the outstanding balance of the MSLP Loan as of December 31, 2023?

The MSLP Loan had an outstanding balance of $51.3 million as of December 31, 2023.