Venus Concept Reports Unregistered Equity Sale, New Financial Obligation

TL;DR

**Venus Concept just sold new shares without registering them, likely diluting current investors.**

AI Summary

On January 18, 2024, Venus Concept Inc. filed an 8-K to report entering into a material definitive agreement and creating a direct financial obligation. This filing indicates the company has engaged in an unregistered sale of equity securities, which could dilute existing shareholders' ownership. For investors, this matters because issuing new shares without registration often suggests a need for capital and can put downward pressure on the stock price due to increased supply.

Why It Matters

This filing signals Venus Concept Inc. is raising capital through an unregistered sale of equity, which typically dilutes existing shareholders and can impact the stock's value.

Risk Assessment

Risk Level: medium — The unregistered sale of equity securities often indicates financial strain or a need for immediate capital, which can be risky for existing shareholders due to potential dilution.

Analyst Insight

A smart investor would investigate the terms of the 'Material Definitive Agreement' and the 'Direct Financial Obligation' to understand the full extent of the company's new liabilities and the potential dilution from the 'Unregistered Sales of Equity Securities' before making any investment decisions.

Key Players & Entities

• Venus Concept Inc. (company) — the registrant filing the 8-K
• January 18, 2024 (date) — date of the earliest event reported
• 001-38238 (other) — Commission File Number for Venus Concept Inc.
• 06-1681204 (other) — IRS Employer Identification Number for Venus Concept Inc.
• Delaware (other) — state of incorporation for Venus Concept Inc.
• 235 Yorkland Blvd, Suite 900 Toronto, Ontario M2J 4Y8 (other) — principal executive offices address for Venus Concept Inc.
• 877-848-8430 (other) — telephone number for Venus Concept Inc.

FAQ

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share VERO The Nasdaq
• $2,000,000 — ompany issued and sold to the Investors $2,000,000 in aggregate principal amount of secure
• $1,000 — is 799.3605 shares of Common Stock per $1,000 principal amount of Notes, which repres
• $1.251 — itial conversion price of approximately $1.251 per share of Common Stock. Accordingly,
• $500,000 — r any guarantor for the payment of more $500,000, where such judgment remains unpaid for

Filing Documents

• ef20018999_8k.htm (8-K) — 63KB
• ef20018999_ex10-1.htm (EX-10.1) — 346KB
• ef20018999_ex10-2.htm (EX-10.2) — 302KB
• ef20018999_ex10-3.htm (EX-10.3) — 306KB
• ef20018999_ex10-4.htm (EX-10.4) — 271KB
• ef20018999_ex10-5.htm (EX-10.5) — 85KB
• ef20018999_ex10-6.htm (EX-10.6) — 85KB
• ef20018999_ex99-1.htm (EX-99.1) — 10KB
• 0001140361-24-002904.txt ( ) — 1903KB
• vero-20240118.xsd (EX-101.SCH) — 4KB
• vero-20240118_lab.xml (EX-101.LAB) — 22KB
• vero-20240118_pre.xml (EX-101.PRE) — 16KB
• ef20018999_8k_htm.xml (XML) — 4KB

01

Item 1.01. Entry into a Material Definitive Agreement. Note Purchase Agreement On January 18, 2024, Venus Concept Inc. (the " Company "), Venus Concept USA Inc. (" Venus USA "), Venus Concept Canada Corp. (" Venus Canada ") and Venus Concept Ltd. (" Venus Israel ," and together with Venus USA and Venus Canada, the " Guarantors ") entered into a Note Purchase and Registration Rights Agreement (the " Note Purchase Agreement ") with EW Healthcare Partners, L.P. (" EW ") and EW Healthcare Partners-A, L.P. (" EW-A ," and together with EW, the " Investors "). Pursuant to the Note Purchase Agreement, the Company issued and sold to the Investors $2,000,000 in aggregate principal amount of secured subordinated convertible notes (the " Notes "). The terms of the Notes are described below under "Notes." The Notes are secured by a Guaranty and Security Agreement, dated January 18, 2024 (the " Security Agreement "), the terms of which are described below under "Security Agreement." Under the Note Purchase Agreement, the Company is required to file one or more demand shelf registration statements registering the resale of the shares of the Company's common stock (" Common Stock ") issuable upon conversion of the Notes. The Company is required to file the initial registration statement no later than March 18, 2024 and cause such registration The Note Purchase Agreement contains customary representations, warranties and covenants by the Company, as well as indemnification obligations of the Company, including for liabilities under the Securities Act of 1933, as amended (the " Securities Act "), and other obligations of the parties. The representations, warranties and covenants contained in the Note Purchase Agreement were made only for purposes of such agreement; are solely for the benefit of the parties; may be subject to qualifications and l

03

Item 2.03. Creation of a Direct Financial Obligation Under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

02

Item 3.02. Unregistered Sales of Equity Securities. The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02. The Notes were issued to the Investors in reliance upon Section 4(a)(2) of the Securities Act in transactions not involving any public offering. Any shares of Common Stock that may be issued upon conversion of the Notes will be issued in reliance upon Section 3(a)(9) of the Securities Act as involving an exchange by the Company exclusively with its security holders.

01

Item 7.01. Regulation FD Disclosure. On January 19, 2024, the Company issued a press release regarding the entry into the Note Purchase Agreement and the issuance of the Notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information contained in this Item 7.01, including Exhibit 99.1 incorporated by reference herein, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or otherwise subject to the liabilities of that Section, nor incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. Cautionary Statement Regarding Forward-Looking Statements This Current Report on Form 8-K contains "forward-looking" 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 issuance of the Notes, the entry into the Note Purchase Agreement and Security Agreement, the CNB Subordination Agreement and the Loan Modification Agreement and any potential conversion of the Notes. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about the Company's business and the industry in which the Company operates and management's beliefs and assumptions and are not guarantees of future performance

Financial Statements and Exhibits

Financial Statements and Exhibits. Exhibit No. Description 10.1 Note Purchase and Regristration Rights Agreement, dated January 18, 2024, by and among Venus Concept Inc., Venus Concept USA Inc., Venus Concept Canada Corp., Venus Concept Ltd., EW Healthcare Partners, L.P. and EW Healthcare Partners-A, L.P. 10.2 Form of Secured Subordinated Convertible Note Issued by Venus Concept Inc. to EW Healthcare Partners, L.P. 10.3 Form of Secured Subordinated Convertible Note Issued by Venus Concept Inc. to EW Healthcare Partners-A, L.P. 10.4 Guaranty and Security Agreement, dated January 18, 2024, by and among Venus Concept Inc., Venus Concept USA Inc., Venus Concept Canada Corp., Venus Concept Ltd. and EW Healthcare Partners, L.P., as Collateral Agent. 10.5 Subordination of Debt Agreement , dated January 18, 2024, by and among Venus Concept Inc., Venus Concept USA Inc., Venus Concept Canada Corp., Venus Concept Ltd., City National Bank of Florida, EW Healthcare Partners, L.P. and EW Healthcare Partners-A, L.P. 10.6 Loan Modification Agreement, dated January 18, 2024, by and among Venus Concept Inc., Venus Concept USA Inc., Venus Concept Canada Corp., Venus Concept Ltd. , City National Bank of Florida , Madryn Health Partners, LP and Madryn Health Partners (Cayman Master) . 99.1 Press release dated January 19, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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. VENUS CONCEPT INC. Date: January 19, 2024 By: /s/ Domenic Della Penna Domenic Della Penna Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR