Venus Concept Granted Continued Listing from Nasdaq Hearings Panel, Subject to Return to Compliance with Nasdaq Listing Rules

Rhea-AI Summary

Venus Concept Inc. (NASDAQ: VERO) receives a decision from the Nasdaq Hearings Panel granting continued listing on the Nasdaq Capital Market, subject to compliance with specific requirements. The company had previously received a deficiency notice for not meeting the minimum stockholders’ equity requirement, leading to a detailed compliance plan and a hearing. Venus Concept is focused on regaining compliance with Nasdaq's listing rules and exploring strategic alternatives to enhance shareholder value.

Insights

Market Analyst

The decision by the Nasdaq Hearings Panel to allow Venus Concept Inc. to maintain its listing on the Nasdaq Capital Market is a significant event for the company and its shareholders. The extension to demonstrate compliance with the Nasdaq Listing Rule 5550(b)(1) indicates a level of confidence by the Nasdaq Panel in Venus Concept's ability to meet the necessary financial criteria, specifically the Minimum Equity Requirement. However, this also suggests that the company has been under financial scrutiny, which may have previously affected investor sentiment.

From a market perspective, the news can be seen as a positive signal, potentially stabilizing the stock price by alleviating immediate concerns over delisting. However, the company is not out of the woods yet, as it must still demonstrate compliance by the newly set deadline. Investors will likely monitor the company's progress closely, as failure to meet the conditions could result in renewed concerns over its financial stability and, consequently, its stock performance.

Moreover, the mention of exploring strategic alternatives to maximize shareholder value indicates that the company is actively looking for ways to improve its financial position and operational performance. This could involve a range of actions, from restructuring to seeking mergers or acquisitions. Such strategic moves could have significant implications for the company's valuation and future stock market performance.

Financial Analyst

Venus Concept's journey to regain compliance with Nasdaq's Minimum Equity Requirement highlights the importance of maintaining robust financial health for publicly traded companies. The deficiency notice and subsequent compliance plan submission reflect a proactive approach by the company's management to address the financial shortfall. The Panel Decision provides a temporary reprieve, but it is critical for investors to consider the underlying reasons for the company's equity position.

An in-depth analysis of Venus Concept's financial statements, particularly the Quarterly Report on Form 10-Q for the period ended March 31, 2023, would be necessary to understand the factors contributing to the equity deficit. This could range from operational inefficiencies to increased liabilities or poor market performance. Investors should also consider the company's ability to achieve cash flow breakeven as indicated by the CEO, as this is a key metric that can influence a company's ability to sustain operations without requiring external financing.

It is also worth noting that the company's engagement with lenders and investors to discuss strategic alternatives could lead to significant changes in the capital structure, which might include debt refinancing or equity financing. Such actions could dilute existing shareholders' equity but might be necessary to ensure long-term viability and compliance with Nasdaq's requirements.

Corporate Strategy Expert

The strategic alternatives that Venus Concept is exploring are essential to understand the company's long-term objectives and potential paths to achieving them. Engaging in dialogue with lenders and investors is an indication of a company actively managing its capital and seeking to optimize its financial strategy. This approach often involves complex negotiations and can result in a variety of outcomes, such as recapitalization, asset sales, or even changes in corporate governance.

For stakeholders, the exploration of strategic alternatives could signal a pivot in the company's business model or a shift in operational focus. The aim to maximize shareholder value is at the core of corporate strategy, but the means to achieve this can vary widely. The outcome of these discussions could significantly impact the company's strategic direction, operational efficiency and market competitiveness.

It is also important for stakeholders to understand the potential risks associated with such strategic shifts. While they may offer opportunities for growth and improved financial performance, they can also lead to execution risks, integration challenges if mergers or acquisitions are pursued and potential disruptions to the company's core business activities.

TORONTO, March 25, 2024 (GLOBE NEWSWIRE) -- Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ: VERO) announced today that it received a decision from the Nasdaq Hearings Panel (the “Nasdaq Panel”) granting its request for continued listing on the Nasdaq Capital Market, subject to the Company demonstrating compliance with Nasdaq Listing Rule 5550(b)(1) or any of the alternative requirements under Nasdaq Listing Rule 5550(b) on or before May 28, 2024, and certain other conditions (the “Panel Decision”).

On May 31, 2023, Nasdaq Listing Qualifications staff (“Nasdaq Staff”) issued the Company a deficiency notice citing that the stockholders’ equity as reported in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, was below the minimum $2,500,000 required for continued listing under Nasdaq Listing Rule 5550(b)(1) (“Minimum Equity Requirement”). On July 17, 2023, the Company submitted to the Nasdaq Staff a plan to regain compliance with the Minimum Equity Requirement (the "Plan"). On July 28, 2023, the Nasdaq Staff granted an extension until November 27, 2023 to evidence compliance with the Minimum Equity Requirement, conditioned upon the Company’s achievement of certain milestones as set forth in the Plan. On November 28, 2023, the Company received a written notice from the Nasdaq Staff which described its determination that the Company had not regained compliance with the Minimum Equity Requirement within the Plan period. On December 5, 2023, the Company requested a hearing, which was held on March 5, 2024 (the “Hearing”), staying any delisting pending the issuance of the Panel’s decision. At the Hearing, the Company presented a comprehensive compliance plan to regain compliance to the Nasdaq Panel and received the Panel Decision regarding the Nasdaq Listing Rules on March 20, 2024.

“We are grateful for the opportunity from Nasdaq to continue to implement our turnaround plan, " said Rajiv De Silva, Chief Executive Officer of Venus Concept. “We look forward to regaining and maintaining compliance with Nasdaq’s continued listing requirements and executing on our plan to grow the business and achieve cash flow breakeven.”
        
Venus Concept continues to explore strategic alternatives to maximize shareholder value as part of the process announced on January 24, 2024. This includes engaging in dialogue with the Company’s existing lenders and investors to find ways to best enable Venus Concept to achieve our operational and strategic objectives.

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 reach in over 60 countries and 12 direct markets. Venus Concept's product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Legacy, Venus Velocity, Venus Fiore, Venus Viva, Venus Glow, Venus Bliss, Venus BlissMAX, 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.

Forward Looking Statements 

This communication includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “expects,” “intends,” “plans,” “estimates,” “assumes,” “may,” “should,” “will,” “seeks,” or other similar expressions. Such statements may include, but are not limited to, the Company regaining compliance with Nasdaq Listing Rule 5550(b) in the future, or otherwise meeting Nasdaq’s continued listing requirements, Nasdaq granting the Company any relief from delisting as necessary, the Company meeting applicable Nasdaq requirements for any such relief, the exploration of strategic alternatives and the efficacy of any such alternatives and ongoing dialogue with existing securityholders of the Company. The forward-looking statements contained in this communication speak only as of the date of this communication and the Company undertakes no obligation to publicly update any forward-looking statements to reflect changes in information, events, or circumstances after the date of this report, unless required by law.

Investor Relations Contact:
ICR Westwicke on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@westwicke.com

FAQ

What decision did Venus Concept receive from the Nasdaq Hearings Panel?

Venus Concept received a decision granting continued listing on the Nasdaq Capital Market, subject to compliance with specific requirements.

What was the deficiency notice issued to Venus Concept by Nasdaq Staff?

Nasdaq Staff issued a deficiency notice to Venus Concept citing that the stockholders’ equity was below the minimum $2,500,000 required for continued listing.

When did Venus Concept request a hearing?

Venus Concept requested a hearing on December 5, 2023, which was held on March 5, 2024.

What strategic alternatives is Venus Concept exploring?

Venus Concept is exploring strategic alternatives to maximize shareholder value, including engaging with existing lenders and investors.