UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2025
VENUS CONCEPT INC.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification Number)
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235 Yorkland Blvd, Suite 900
Toronto, Ontario M2J 4Y8
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (877)
848-8430
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Common Stock, $0.0001 par value per share
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VERO
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The Nasdaq Capital Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. |
Entry into a Material Definitive Agreement.
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Consent Agreement
On January 28, 2025, Venus Concept Inc. (the “Company”), Venus Concept USA, Inc., a wholly-owned subsidiary of the Company (“Venus USA” or “Borrower”),
Venus Concept Canada Corp., a wholly-owned Canadian subsidiary of the Company (“Venus Canada”), and Venus Concept Ltd., a wholly-owned Israeli subsidiary of the Company (“Venus Israel” and together with the Company, Venus USA and Venus Canada, the
“Loan Parties”), entered into a Consent Agreement with Madryn Health Partners, LP (“Madryn”) and Madryn Health Partners (Cayman Master), LP (“Madryn Cayman,” and together with Madryn, the “Lenders”) (the “Consent Agreement”).
The Consent Agreement granted relief under the Loan and Security Agreement (Main Street Priority Loan), dated December 8, 2020, among the Lenders, as lenders, and Venus
USA, as borrower (the “MSLP Loan Agreement”), such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through February 28, 2025, and (ii) to permit Venus USA to apply the February 8, 2025 cash interest payment
due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.
The foregoing description of the Consent Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the
Consent Agreement, a copy of which is filed hereto as Exhibit 10.1.
Eleventh Bridge Loan Amendment and Sixth Delayed Drawdown
As previously disclosed, on April 23, 2024, the Loan Parties entered into a Loan and Security Agreement (the “Loan and Security Agreement”), among the
Borrower, as borrower, the Company, Venus Canada and Venus Israel, collectively as guarantors, the Lenders, as lenders, and Madryn, as administrative agent. Pursuant to the Loan and Security Agreement (as amended), the Lenders have agreed to provide
the Borrower with bridge financing (the “Bridge Financing”) in the form of a term loan in one or more draws in an aggregate principal amount of up to $5,000,000, which amount was subsequently increased to $8,237,906.85. Borrowings under the Bridge
Financing will bear interest at a rate per annum equal to 12%.
On the maturity date of the Bridge Financing, the Loan Parties are obligated to make a payment equal to all unpaid principal and accrued interest. The
Loan and Security Agreement also provides that all present and future indebtedness and the obligations of the Borrower to Madryn shall be secured by a priority security interest in all real and personal property collateral of the Loan Parties.
The initial drawdown under the Loan and Security Agreement occurred on April 23, 2024, when the Lenders agreed to provide the Borrower with bridge
financing in the form of a term loan in the principal amount of $2,237,906.85.
The second drawdown under the Loan and Security Agreement occurred on July 26, 2024, when the Lenders agreed to provide the Borrower with a subsequent
drawdown under the Loan and Security Agreement in the principal amount of $1,000,000.
The third drawdown under the Loan and Security Agreement occurred on September 11, 2024, when the Lenders agreed to provide the Borrower with a
subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,000,000.
The fourth drawdown under the Loan and Security Agreement occurred on November 1, 2024, when the Lenders agreed to provide the Borrower with a subsequent
drawdown under the Loan and Security Agreement in the principal amount of $1,000,000.
The fifth drawdown under the Loan and Security Agreement occurred on November 26, 2024, when the Lenders agreed to provide the Borrower with a subsequent
drawdown under the Loan and Security Agreement in the principal amount of $1,200,000.
The sixth drawdown under the Loan and Security Agreement occurred on December 9, 2024, when the Lenders agreed to provide the Borrower with a subsequent
drawdown under the Loan and Security Agreement in the principal amount of $1,500,000.
On January 28, 2025, the Loan Parties entered into an Eleventh Bridge Loan Amendment Agreement with the Lenders (the “Eleventh Bridge Loan Amendment”).
The Eleventh Bridge Loan Amendment amended the Loan and Security Agreement to (i) increase the Delayed Draw Commitment, as defined in the Loan and Security Agreement, from $6,000,000 to $11,000,000 and (ii) extend the maturity date of the Bridge
Financing from January 31, 2025 to February 28, 2025.
On January 27, 2025, the Lenders agreed to provide the Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount
of $3,000,000 (the “Sixth Delayed Drawdown”). The Sixth Delayed Drawdown was fully funded on January 28, 2024 following the effectiveness of the Eleventh Bridge Loan Amendment. The Company expects to use the proceeds of the Sixth Delayed Drawdown,
after payment of transaction expenses, for general working capital purposes.
The foregoing description of the Eleventh Bridge Loan Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the
Eleventh Bridge Loan Amendment, a copy of which is filed hereto as Exhibit 10.2. For additional information regarding the Bridge Financing, please see the Current Report on Form 8-K, including the exhibits thereto, filed by the Company with the
Securities and Exchange Commission on April 24, 2024.
| Item 9.01. |
Financial Statements and Exhibits.
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Exhibit
No.
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Description
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Consent Agreement dated January 28, 2025, by and among Venus
Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc.,
Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP
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Eleventh Amendment to Bridge Loan Agreement, dated January 28, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus
Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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VENUS CONCEPT INC. |
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Date: January 31, 2025
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By:
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/s/ Domenic Della Penna |
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Domenic Della Penna |
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Chief Financial Officer |
CONSENT AGREEMENT
This CONSENT AGREEMENT (the “Agreement”) dated as of January 28, 2025 (the “Effective Date”) is entered into among (a) VENUS CONCEPT USA INC., a Delaware corporation (the “Borrower”), (b) VENUS CONCEPT INC., a Delaware corporation (“Venus Concept”), (c) VENUS CONCEPT CANADA CORP., a corporation incorporated under the laws of the Province of Ontario (“Venus Canada”),
(d) VENUS CONCEPT LTD., a company formed under the Companies Law of Israel “Venus Israel” and, together with Venus Concept and Venus Canada, the “Guarantors”; the Borrower and the Guarantors shall be referred to herein, collectively, as the “Loan Parties”), and (e) each of (i) MADRYN HEALTH PARTNERS, LP, a
Delaware limited partnership (“Madryn Health”) and (ii) MADRYN HEALTH PARTNERS (CAYMAN MASTER), LP, a Cayman Islands limited partnership (“Madryn
Cayman” and, together with Madryn Health, the “Lenders”; together the Lender and the Loan Parties are hereinafter referred to as the “Parties”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Loan Agreement (as defined below).
RECITALS
WHEREAS, CITY NATIONAL BANK OF FLORIDA (“CNB”) and the Borrower were parties to that
certain Loan and Security Agreement (Main Street Priority Loan), dated as of December 8, 2020 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Loan Agreement”),
between CNB, as lender, and Borrower, pursuant to which CNB provided Borrower a term loan in the principal amount of Fifty Million Dollars($50,000,000.00) (the “Loan”) issued pursuant to the
Main Street Priority Loan Facility, all upon certain terms and conditions set forth in the Loan Agreement and in the other Loan Documents (as defined in the Loan Agreement), as amended by that certain Loan Amendment and Consent Agreement, dated as of
May 24, 2024, made among the Loan Parties and the Lenders, that certain Loan Amendment and Consent Agreement, dated as of July 8, 2024, made among the Loan Parties and the Lenders and that certain Third Loan Amendment, First Subordination Agreement
Amendment and Consent Agreement, dated as of September 26, 2024, made among the Loan Parties and the Lenders;
WHEREAS, to evidence Borrower’s repayment obligations under the Loan Agreement, Borrower executed a Promissory Note in favor of CNB dated December 8,
2020 (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time, the “Original Note”), in the original principal amount of $50,000,000.00;
WHEREAS, in connection with the Loan, Venus Concept and Venus Canada have previously issued a Guaranty of Payment and Performance, originally dated as
of December 8, 2020, in favor of the Lender (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Main Street Guaranty”);
WHEREAS, in connection with the Loan, (i) the Borrower, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of
December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Borrower Main Street Subordination
Agreement”), (ii) Venus Concept, each Lender and CNB entered into that certain Subordination of Debt Agreement, dated as of December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to
time, the “Venus Concept. Main Street Subordination Agreement”), (iii) Venus Canada, each Lender and CNB entered into that certain
Subordination of Debt Agreement, dated as of December 8, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Canada Main Street Subordination Agreement”), and (iv) the Venus Israel, each Lender
and CNB entered into that certain Subordination of Debt Agreement, dated as of October 4, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Israeli
Main Street Subordination Agreement” and, together with the Borrower Main Street Subordination Agreement, the Venus Concept Main Street Subordination Agreement and the Canada Main Street Subordination Agreement, the “Madryn Main Street Subordination Agreements” and each, a “Madryn Main Street Subordination Agreement”);
WHEREAS, pursuant to that certain Main Street Loan – Venus Concept – Sale and Assignment Agreement, dated as of April 23, 2024, between CNB and the
Lenders, CNB assigned, transferred, and conveyed all of its rights, title, and interest in and to the Loan, Note, the Loan Agreement, the Main Street Guaranty, the Madryn Main Street Subordination Agreements, all other Loan Documents and any related
documents to the Lenders;
WHEREAS, pursuant to that certain Exchange Agreement, dated as of May 24, 2024, and made among the Borrower, Venus Concept, and the Lenders, the
Lenders exchanged the Original Note for (a) two new promissory notes issued by the Borrower to each of Madryn Health and Madryn Cayman (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time,
collectively, the “May 2024 Notes”) and (b) shares of preferred stock of Venus Concept;
WHEREAS, pursuant to that certain Exchange Agreement, dated as of September 26, 2024, and made among the Borrower, Venus Concept, and the Lenders, the
Lenders exchanged the May 2024 Notes for (a) two new promissory notes issued by the Borrower to each of Madryn Health and Madryn Cayman (as amended, amended and restated, supplemented, waived, exchanged or otherwise modified from time to time,
collectively, the “Notes” and each, a “Note”) and (b) shares of preferred stock of Venus Concept;
WHEREAS, the Borrower will be required to pay to the Lenders accrued interest on the Notes on February 8, 2025 (such interest, the “February 2025 Interest”);
WHEREAS, the Borrower has requested that in lieu of paying the February 2025 Interest in cash, the Lenders consent to the payment by the Borrower of
the February 2025 Interest by adding such interest to the outstanding principal amount of the Loan effective as of February 8, 2025 (such payment, the “February 2025 PIK Interest Payment”);
WHEREAS, the Borrower has requested relief from the obligation to comply with the requirements of Section 7(a) of the Loan Agreement (“Liquidity”) in
respect of the Borrower’s minimum liquidity amounts (“Requested Minimum Liquidity Consent”); and
WHEREAS, the Lenders are willing to consent to the February 2025 PIK Interest Payment and the Requested Minimum Liquidity Consent, subject to the
terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
(a) February 2025 PIK Interest Payment Consent.
(i) Subject to the other
terms and conditions of this Agreement, the Lenders hereby consent to the February 2025 PIK Interest Payment. The above consent shall not otherwise modify or affect the Borrower and the other Loan Parties’ obligations to comply fully with any
other duty, term, condition or covenant contained in the Loan Agreement, the Notes, or any other Loan Document in the future and is limited solely to the matters set forth in this Section 1(a). Nothing contained in this Agreement shall be deemed
to constitute a waiver of any duty, term, condition or covenant contained in the Loan Agreement, the Notes or any other Loan Document in the future, or any other rights or remedies any Lender may have under the Loan Agreement, the Notes or any
other Loan Documents or under applicable law.
(ii) The Borrower and
the Lenders acknowledge and agree that in lieu of making cash payment of the February 2025 Interest, the Borrower will pay such interest to the Lenders on February 8, 2025 by adding such interest to the outstanding principal amount of the Loan on
such date. Any and all such paid-in-kind interest so added to the principal amount of the Loan shall constitute and increase the principal amount of the Loans for all purposes under this Agreement and shall bear interest in accordance with the
provisions of the Loan Agreement and Notes.
(b) Requested Minimum Liquidity Consent. The Lenders, as of the date hereof, hereby approve the Requested Minimum Liquidity Consent and agree that until February 28, 2025, the failure of any of
the Loan Parties to comply with the obligations of Section 7(a) of the Loan Agreement shall not constitute an Event of Default under the Loan Agreement or the Notes. The above consent shall not otherwise modify or affect the Borrower’s and the
other Loan Parties’ obligations to comply fully with the terms of the Loan Agreement, the Notes or any other Loan Document in the future and is limited solely to the matters set forth in this Section 1(b). Nothing contained in this Agreement
shall be deemed to constitute a waiver of any duty, term, condition or covenant contained in the Loan Agreement, the Notes or any other Loan Document in the future, or any other rights or remedies any Lender may have under the Loan Agreement, the
Notes or any other Loan Documents or under applicable law.
2. Conditions Precedent. This Agreement shall be effective upon the date on which the Lenders shall have received counterparts of this Agreement duly executed by the Borrower, the Guarantors, and the Lenders.
3. Reaffirmation. Each of the Loan Parties acknowledges and reaffirms (a) that it is bound by all of the terms of the Loan Documents to which it is a party and (b) that it is responsible for the observance and full
performance of all Obligations, including without limitation, the repayment of the Loan. Furthermore, the Loan Parties acknowledge and confirm that by entering into this Agreement, the Lenders do not, except as expressly set forth herein, waive
or release any term or condition of the Loan Agreement, the Notes or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or any applicable law or any of the obligations of the Loan Parties thereunder.
4. Representations and Warranties. Each Loan Party represents and warrants to the Lenders as follows:
(a) As of the Effective Date, no Event of Default has occurred and is continuing.
(b) The representations
and warranties of the Borrower and each other Loan Party contained in Section 5 of the Loan Agreement, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material
respects(and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) on and as of the Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation and warranty is already qualified by materiality or reference to material adverse effect) as
of such earlier date.
(c) Each Loan Party has
the full power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder, under the Loan Agreement and under each of the other Loan Documents. The execution, delivery and performance by each Loan Party
of this Agreement, and the performance by each Loan Party of the Loan Agreement and each other Loan Document to which it is a party, in each case, are within such person’s powers and have been authorized by all necessary corporate action
of such person.
(d) This Agreement has
been duly executed and delivered by such person and constitutes such person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in
equity).
(e) No consent,
approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such person of this Agreement.
(f) The execution and
delivery of this Agreement does not (i) violate, contravene or conflict with any provision of its organization documents or (ii) materially violate, contravene or conflict with any laws applicable to it or its subsidiaries.
(g) The Loan Parties’
obligations are not reduced or modified by this Agreement and are not subject to any offsets, defenses or counterclaims.
5. Release. As a material part of the consideration for the Lenders entering into this Agreement (this Section 5, the “Release Provision”):
(a) Each Loan Party
agrees that the Lenders, each of their respective affiliates and each of the foregoing persons’ respective officers, managers, members, directors, advisors, sub- advisors, partners, agents and employees, and their respective successors and
assigns (hereinafter all of the above collectively referred to as the “Lender Group”), are irrevocably and unconditionally released, discharged and acquitted from any and all actions,
causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to the extent that any of the foregoing arises from any action or failure to act under or
otherwise arising in connection with the Loan Agreement, the Notes or the other Loan Documents on or prior to the date hereof.
(b) Each Loan Party
hereby acknowledges, represents and warrants to the Lender Group that:
(i) it has read and
understands the effect of the Release Provision. Each Loan Party has had the assistance of independent counsel of its own choice, or has had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the
terms of the Release Provision; and if counsel was retained, counsel for such Loan Party has read and considered the Release Provision and advised such Loan Party with respect to the same. Before execution of this Agreement, each Loan Party has
had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of the Release Provision.
(ii) no Loan Party is
acting in reliance on any representation, understanding, or agreement not expressly set forth herein. Each Loan Party acknowledges that the Lender Group has not made any representation with respect to the Release Provision except as expressly set
forth herein.
(iii) each Loan Party has executed this Agreement and the Release Provision thereof as its free and voluntary act, without any duress, coercion, or undue influence
exerted by or on behalf of any person.
(iv) each Loan Party is
the sole owner of its respective claims released by the Release Provision, and no Loan Party has heretofore conveyed or assigned any interest in any such claims to any other Person.
(c) The Loan Parties
understand that the Release Provision was a material consideration in the agreement of the Lenders to enter into this Agreement. The Release Provision shall be in addition to any right, privileges and immunities granted to the Lenders under the
Loan Documents.
(a) The Loan Agreement
and the Notes, each as may be modified hereby, and the obligationsof the Loan Partiesthereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This
Agreement shall constitute a Loan Document under the Loan Agreement.
(b) This Agreement may be
executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy shall be
effective as an original and shall constitute a representation that an executed original shall be delivered.
(c) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Signature pages follow]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above written.
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VENUS CONCEPT USA INC.,
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as Borrower and a Grantor
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By:
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/s/ Rajiv De Silva
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Name:
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Rajiv De Silva
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Title:
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President and Assistant Secretary
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VENUS CONCEPT INC.,
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as a Guarantor and a Grantor
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Name:
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Rajiv De Silva
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Title:
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Chief Executive Officer
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VENUS CONCEPT CANADA CORP.,
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as a Guarantor and a Grantor
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Name:
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Hemanth Varghese
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Title:
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President and General Manager
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VENUS CONCEPT LTD,
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as a Guarantor and a Grantor
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Name:
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Rajiv De Silva
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Title:
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Chief Executive Officer
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MADRYN HEALTH PARTNERS, LP, as a Lender
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By:
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MADRYN HEALTH ADVISORS, LP,
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its General Partner
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By:
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MADRYN HEALTH ADVISORS GP, LLC,
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its General Partner
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Name:
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Avinash Amin
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Title:
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Member
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MADRYN HEALTH PARTNERS (CAYMAN
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MASTER), LP, as a Lender
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By:
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MADRYN HEALTH ADVISORS, LP,
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its General Partner
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By:
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MADRYN HEALTH ADVISORS GP, LLC,
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its General Partner
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Name: |
Avinash Amin
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Title:
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Member
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